What's New?
 - Sitemap - Calendar
Trade Agreements - FTAA Process - Trade Issues 

espa�ol - fran�ais - portugu�s
Search

World Trade
Organization

WT/DS18/AB/R
20 October 1998
(98-0000)
Original: English

Australia - Measures Affecting Importation of Salmon

Report of the Appellate Body

(Continued)


1. First Element of Article 5.5

143. With regard to the first element of Article 5.5, namely, the existence of distinctions in appropriate levels of protection in different situations, the Panel cited our Report in European Communities - Hormones, where we stated that "situations

... cannot, of course, be compared, unless they are comparable, that is, unless they present some common element or elements sufficient to render them comparable".94 The Panel found that:

... in the circumstances of this dispute, we can compare situations under Article 5.5 if these situations involve either a risk of "entry, establishment or spread" of the same or a similar disease or of the same or similar "associated biological and economic consequences" and this irrespective of whether they arise from the same product or other products.95 (emphasis added)

144. On this basis, the Panel determined that the import prohibition on fresh, chilled or frozen salmon for human consumption and the admission of imports of (i) uncooked Pacific herring, cod, haddock, Japanese eel and plaice for human consumption; (ii) uncooked Pacific herring, Atlantic and Pacific cod, haddock, European and Japanese eel and Dover sole for human consumption;(iii) herring in whole, frozen form used as bait ("herring used as bait"); and (iv) live ornamental finfish, are "different" situations which can be compared under Article 5.5 of the SPS Agreement.96

145. Australia argues that the Panel erred by considering that situations are "different", i.e., "comparable", if these situations involve either a risk of entry, establishment or spread of the same or a similar disease, or a risk of the same or similar "associated potential biological and economic consequences".97 Australia contends that the Panel has imputed a meaning to the term "risk" which conflicts with the ordinary meaning of the term as used in its context and in the light of the object and purpose of the SPS Agreement. According to Australia, the "risk" to be examined is the risk evaluated in the risk assessment, namely, the risk of entry, establishment or spread of several different diseases and of the associated potential biological and economic consequences.98

146. Situations which involve a risk of entry, establishment or spread of the same or a similar disease have some common elements sufficient to render them comparable under Article 5.5. Likewise, situations with a risk of the same or similar associated potential biological and economic consequences also have some common elements sufficient to render them comparable under Article 5.5. We, therefore, consider that for "different" situations to be comparable under Article 5.5, there is no need for both the disease and the biological and economic consequences to be the same or similar. We recognize that, as pointed out by Australia, the risk which needs to be examined in a risk assessment, pursuant to Article 5.1 and the first definition of risk assessment of paragraph 4 of Annex A, is the risk of both the entry, establishment or spread of a disease and the associated potential biological and economic consequences. However, we fail to see how this can be of relevance to the question of comparability of different situations under Article 5.5 which is the issue addressed by the Panel. We, therefore, conclude that the Panel was correct in stating that situations can be compared under Article 5.5 if these situations involve either a risk of entry, establishment or spread of the same or a similar disease, or a risk of the same or similar "associated potential biological and economic consequences".

147. Moreover, we note that the Panel examined and concluded, with respect to each of the four comparisons, that there is a risk of entry, establishment or spread of the same or similar diseases and that the risk of associated potential biological and economic consequences is the same or similar.99

148. Australia also argues that the Panel erred by examining the biological and economic consequences of the "introduction" of diseases rather than the biological and economic consequences of the "entry, establishment or spread" of diseases.100 According to Australia, the Panel's interpretation of "entry, establishment or spread" as "introduction" is contrary to the SPS provisions on risk assessment, i.e., Articles 5.1 to 5.3 and Annex A.101 We note that it is clear from the context of the relevant Panel discussion, that the Panel merely used the word "introduction" as a short hand expression for "entry, establishment or spread". It explicitly defined the consequences of disease introduction as "the consequences of a disease once established in a country".102

149. Furthermore, even if there were to be a difference between the consequences of "disease introduction" and the consequences of the "entry, establishment and spread of a disease", we note that for the comparability of situations under Article 5.5, nothing requires us to look at the latter and not at the former. We recognize that the definition of a risk assessment requires a risk assessment to evaluate the consequences of the "entry, establishment and spread of a disease" but we fail to see how this can be of relevance to the question of the comparability of different situations under Article 5.5.

150. Australia finally contends that the Panel erred in determining that its examination on the comparability of different situations must be limited solely to those disease agents positively detected. According to Australia, the Panel diminished Australia's right to a cautious approach to determine its own appropriate level of protection. Australia argues that the Panel failed to interpret the provisions of Article 5.5 in their context and in the light of the object and purpose of the SPS Agreement. According to Australia, the terms "likelihood" and "potential" in regard to the definition of "risk assessment" contained in paragraph 4 of Annex A, and the terms "scientific principles" and "sufficient scientific evidence" contained in Article 2.2, make it clear that the basic SPS right set out in Article 2.1 to take SPS measures necessary for the protection of animal life or health, is not contingent on positive scientific evidence of disease detection.103

151. We note that, contrary to what Australia argues, the Panel did not limit its examination under Article 5.5 to diseases positively detected in fresh, chilled or frozen ocean-caught Pacific salmon. On the contrary, it appears clearly from Annex 1 to the Panel Report, entitled "The Four Comparisons under Article 5.5", that the Panel examined diseases of concern which, according to Australia, may be carried by fresh, chilled or frozen ocean-caught Pacific salmon but which have not yet been positively detected in this type of salmon.104 We also note that the Panel stated explicitly that:

... To the extent that both the other products and the salmon products further examined are known to be hosts to one of these disease agents or - for the salmon products - give rise to an alleged concern for that disease agent, they can be associated with the same kind of risk, namely a risk of entry, establishment or spread of that disease.105 (emphasis added)

152. In addition, we believe that for situations to be comparable under Article 5.5, it is sufficient for these situations to have in common a risk of entry, establishment or spread of one disease of concern. There is no need for these situations to have in common a risk of entry, establishment or spread of all diseases of concern. Therefore, even if the Panel had excluded from its examination some diseases of concern not positively detected in fresh, chilled or frozen ocean-caught Pacific salmon, this would not invalidate its finding in paragraph 8.121 on comparable situations under Article 5.5.

153. We, therefore, uphold the Panel's finding in paragraph 8.121 of its Report that the import prohibition on fresh, chilled or frozen salmon for human consumption and the admission of imports of other fish and fish products are "different" situations which can be compared under Article 5.5 of the SPS Agreement.106

2. Second Element of Article 5.5

154. With regard to the second element of Article 5.5, namely, the existence of arbitrary or unjustifiable distinctions in appropriate levels of protection in different situations, the Panel began its analysis by noting that in view of the difference in SPS measures and corresponding levels of protection for salmon products, on the one hand, and the four categories of other fish and fish products, on the other, one might expect some justification for this difference, such as a higher risk from imported salmon.107 However, as the Panel noted:

... the arguments, reports, studies and expert opinions submitted to us in this respect - rather than pointing in the direction of a higher risk related to ...[ocean-caught Pacific salmon], in order to justify the stricter sanitary measures imposed for these products - all provide evidence that the two categories of non-salmonids [herring used as bait and live ornamental finfish], for which more lenient sanitary measures apply, can be presumed to represent at least as high a risk - if not a higher risk - than the risk associated with ... [ocean-caught Pacific salmon].108

155. The Panel, therefore, found that, on the basis of the evidence before it, the distinctions in levels of sanitary protection reflected in Australia's treatment of, on the one hand, ocean-caught Pacific salmon and, on the other, herring used as bait and live ornamental finfish, are "arbitrary or unjustifiable" in the sense of the second element of Article 5.5.109

156. Australia argues that the Panel erred in determining that its examination under Article 5.5, second element, must be limited solely to those disease agents positively detected in ocean-caught Pacific salmon. Australia raises the same objections to this limitation as it did in the context of the first element discussed above.110

157. We do not agree with Australia that the Panel excluded diseases of concern which have not been positively detected in ocean-caught Pacific salmon from its examination under Article 5.5. The Panel explicitly took into account diseases which have not been positively detected in ocean-caught Pacific salmon but had been detected in herring used as bait and live ornamental finfish.111 In addition, we observe that the inclusion in the examination under Article 5.5, second element, of all diseases of concern which have not been positively detected in ocean-caught Pacific salmon would logically have led to the inclusion of all diseases of concern which have not been positively detected in herring used as bait and live ornamental finfish. Due to the lack of reliable scientific information, this exercise would have become highly speculative and, moreover, would probably not have changed the Panel's finding in paragraph 8.141 on the "arbitrary or unjustifiable" character of the distinctions in the levels of protection.

158. Australia determined explicitly that its appropriate level of protection with respect to ocean-caught Pacific salmon is "a high or 'very conservative' level of sanitary protection aimed at reducing risk to 'very low levels', 'while not based on a zero-risk approach'."112 The level of protection reflected in Australia's treatment of herring used as bait and live ornamental finfish is definitely lower. We note the Panel's factual finding that herring used as bait and live ornamental finfish can be presumed to represent at least as high a risk - if not a higher risk - than the risk associated with ocean-caught Pacific salmon.113 Therefore, we uphold the Panel's finding in paragraph 8.141 of its Report to the extent that the Panel found that the second element of Article 5.5 is fulfilled.

3. Third Element of Article 5.5

159. With regard to the third element of Article 5.5, i.e., that the arbitrary or unjustifiable distinctions in levels of protection result in "discrimination or a disguised restriction on international trade", we note that the Panel identified three "warning signals" as well as three "other factors more substantial in nature" ("additional factors").114 The Panel considered that each of these "warning signals" and "additional factors" can be taken into account in its decision on the third element of Article 5.5. In paragraph 8.159 of its Report, it concluded:

On the basis of all "warning signals" and factors outlined above, considered cumulatively, ... the distinctions in levels of protection imposed by Australia for, on the one hand, ... [ocean-caught Pacific salmon] and, on the other hand, herring ... use[d] as bait and live ornamental finfish, ... result[...] in "a disguised restriction on international trade", in the sense of the third element of Article 5.5.115 (emphasis added)

160. Australia contends that the Panel made a number of substantive errors of law in using these "warning signals" and "additional factors" to come to its conclusion on the third element of Article 5.5.116

161. The first "warning signal" the Panel considered was the arbitrary or unjustifiable character of the differences in levels of protection.117 It noted what we stated in European Communities - Hormones:

... the arbitrary or unjustifiable character of differences in levels of protection [...] may in practical effect operate as a "warning" signal that the implementing measure in its application might be a discriminatory measure or might be a restriction on international trade disguised as an SPS measure for the protection of human life or health".118

The Panel, therefore, considered that:

... In this dispute, ... the arbitrary character of the differences in levels of protection is a "warning signal" that the measure at issue results in "a disguised restriction on international trade".119

162. According to Australia, the Panel erred in according the first "warning signal", the status of evidence which demonstrates that the measure results in a disguised restriction on international trade.120 We note however, that it appears clearly from the Panel Report, and in particular, from the reference therein to our Report in European Communities - Hormones, that the Panel considered the arbitrary or unjustifiable character of differences in levels of protection as a "warning signal" for, and not as "evidence" of, a disguised restriction on international trade.121

163. The second "warning signal" considered by the Panel was the rather substantial difference in levels of protection between an import prohibition on ocean-caught Pacific salmon, as opposed to tolerance for imports of herring used as bait and of live ornamental finfish.122 The Panel noted our statement in European Communities - Hormones that:

... the degree of difference, or the extent of the discrepancy, in the levels of protection, is only one kind of factor which, along with others, may cumulatively lead to the conclusion that discrimination or a disguised restriction on international trade in fact results from the application of a measure.123 (emphasis added)

On that basis, the Panel stated:

... we do consider that the rather substantial difference in levels of protection is one of the factors we should take into account in deciding whether the measure at issue results in "a disguised restriction on international trade", as argued by Canada.124

To continue with Third Element of Article 5.5


94Adopted 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R para. 217.

95Panel Report, para. 8.117.

96Panel Report, para. 8.121. Hereafter, we refer to these groups of imports as "other fish and fish products".

97Australia's appellant's submission, paras. 155 ff, referring to the Panel Report, para. 8.117.

98Australia's appellant's submission, paras. 159 ff.

99Panel Report, para. 8.121.

100Australia's appellant's submission, para. 168, referring to the Panel Report, para. 8.121. We recall that Australia's claims relating to the burden of proof and Article 11 of the DSU are dealt with in Part VI of this Report.

101Australia's appellant's submission, para. 168.

102Panel Report, para. 8.121.

103Australia's appellant's submission, para. 181.

104We recognize that the Panel in footnote 469 to Annex 1 stated: "When addressing 'disease occurrence' in this Annex, we focus on whether or not the specific disease agent has been detected in the product concerned. We realize that [in] doing so we simplify the comparison and that a better comparison could be made if more data was available. ...". In the light of the information contained in the Annex itself, this cannot be understood to mean that diseases not positively detected were not considered.

105Panel Report, para. 8.119.

106We note that the Panel subsequently examined whether there is, for each of these "different" situations, a distinction in levels of sanitary protection. In para. 8.129, it concluded:

... We thus assume in this case that the rather substantial difference in sanitary measures imposed by Australia for ... [ocean-caught Pacific salmon] (an import prohibition) as opposed to those imposed for the other four situations (where imports are allowed, often without control; ...), does reflect a difference in the levels of protection considered to be appropriate by Australia for each of the four comparisons in the sense of the first element of Article 5.5.

This finding is not appealed.

107Panel Report, para. 8.133.

108Panel Report, para. 8.134.

109Panel Report, para. 8.141.

110Supra., para. 150.

111Panel Report, para. 8.140.

112Panel Report, para. 8.107.

113Panel Report, para. 8.134 quoted in relevant part in para. 154 of this Report.

114Panel Report, paras. 8.149 and 8.158.

115Panel Report, para. 8.159.

116Australia also claims that the Panel exceeded its terms of reference, violated the rules on burden of proof and failed to make an objective assessment of the matter as required by Article 11 of the DSU. These claims are examined in Section B of Part IV and Sections A and B of Part VI of this Report.

117Panel Report, para. 8.149.

118Adopted 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R, para. 215.

119Panel Report, para. 8.149.

120Australia's appellant's submission, para. 216.

121Panel Report, para. 8.149.

122Panel Report, para. 8.150.

123Adopted 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R, para. 240.

124Panel Report, para. 8.150.