Australia - Measures Affecting Importation of Salmon Report of the Panel (Continued) 8.173 In order to decide whether any of the alternative measures meet Australia's appropriate level of protection for the salmon products further examined, we first have to examine more closely what that level of protection is. 443 In this respect, we recall our earlier consideration that the level of protection implied or reflected in a sanitary measure or regime imposed by a WTO Member can be presumed to be at least as high as the level of protection considered to be appropriate by that Member. In this dispute, the level of protection implied in the measure currently imposed - in effect and from a sanitary perspective certain heat treatment requirements - can thus be presumed to be at least as high as Australia's appropriate level of protection for the salmon products further examined. 444 To determine whether any of the alternative measures meet Australia's appropriate level of protection, we should thus examine whether these alternatives meet the level of protection currently achieved by the measure at issue. 8.174 After summing up the five available options, the 1996 Final Report states the following: "These options and derived variations represent a continuum of the estimated levels of quarantine risk. Option 5 represents the higher end and option 1 the lower end of the risk continuum; the other options lie between. The difference in level of risk between each option is incremental and cannot be quantified". 445 (underlining added) In the conclusion to Section 1 of the 1996 Final Report (Section 1.6), the five options are repeated and a similar general assessment is made: "These options provide for varying levels of risk which cannot be quantified. Heat treatment (Option 1) provides the highest level of security; the international standard of evisceration only (Option 5) provides for the lowest level of security". 446 (underlining added) "The risk of disease entry and establishment that would follow adoption of Options 1 to 4 appears to be small based on the known epidemiology of the disease agents and past experience. However, there is a degree of uncertainty attached to this judgement of the level of risk because of gaps in and inherent shortcomings of the available data. It is extremely difficult to distinguish and describe the level of risk that each option presents from the continuum of risk that are covered by these options. For Options 1, 2, 3 and 4, this is particularly so and it is hard to determine if any of the suggested quarantine requirements, which are additional to those identified in Option 4, would have a substantial impact on the overall risk". 447 (underlining added) 8.175 The measure currently in place imposes, in effect, certain heat-treatment requirements defined in the 1988 Conditions. Heat treatment is referred to more generally in Option 1. At the interim review stage, Australia submitted that Option 1 is not the same as the 1988 Conditions in that the level of protection in Option 1 is higher than that achieved by the 1988 Conditions because Option 1 calls for inactivation of the disease agents, a result not required in the 1988 Conditions. 448 Since Option 1 was never formally recommended by the 1996 Final Report and, therefore, not further defined, we have no evidence on which to decide whether Option 1 is the same as the 1988 Conditions. We recall, however, that to determine whether any of the alternative measures meet Australia's appropriate level of protection, we should examine whether these alternatives meet the level of protection currently achieved by the measure in place (in effect, the heat treatment requirements in the 1988 Conditions) and - in the event Option 1 is different from the measure in place - not that reflected in Option 1. 449 Since, according to Australia, the level of protection achieved by the measure in place is lower than that reflected in Option 1, if we were to find evidence that alternative options can be presumed to meet the level of protection reflected in Option 1, these alternatives can a fortiori be presumed to achieve the lower level of protection currently achieved by the measure in place. 8.176 According to the 1996 Final Report, Option 2 (adopting the 1995 BRS Report's conclusions) is likely to represent the option with a degree of risk most similar to that achieved under Option 1. 450 We shall, therefore, focus our attention on Option 2 and examine, in particular, whether that option would also achieve the level of protection currently achieved by the measure at issue. Four factors lead us to conclude that there are alternatives to the measure currently in place which would meet Australia's appropriate level of protection, i.e., meet the level of protection achieved today by the measure in dispute. 8.177 First, Australia itself, in the 1996 Final Report, acknowledges that "[t]he risk of disease entry and establishment that would follow adoption of Options 1 to 4 appears to be small". 451 The 1996 Final Report goes even further and states that "it is hard to determine if any of the suggested quarantine requirements, which are additional to those identified in Option 4, would have a substantial impact on the overall risk". According to Australia itself there is, therefore, only a minimal, if any, difference in the level of sanitary protection linked to the alternative Options 2 to 4 and that reflected in Option 1 - and thus a fortiori 452 than that achieved by the measure at issue. 8.178 Second, on several occasions the 1996 Final Report states that "[h]eat- treatment (Option 1) provides the highest level of security". 453 However, as we found earlier454, neither the 1996 Final Report, nor any other study before us, establishes that heat treatment actually reduces risk to the greatest extent. The 1996 Final Report does not even address heat treatment as a risk reduction factor for 13 of the 24 diseases of concern. According to the 1996 Final Report and other studies and expert opinions we received, some disease agents are known to survive heat treatment or even grow when heat treatment is limited to the lower temperatures currently allowed under the 1988 Conditions; and for some disease agents freezing seems to reduce risk to the same extent as heating. 455 Australia's main reason in the 1996 Final Report to not accept the "small" risk related to Options 2 to 4456, namely that "there is a degree of uncertainty attached to this judgement of the level of risk because of gaps in and inherent shortcomings of the available data", seems, therefore, to apply more to heat treatment (Option 1) than to any of the other options. Indeed, all risk reduction factors proposed by, for example, the 1995 BRS Report (Option 2) have been examined; not only in the 1995 BRS Report itself, but most of them, if not all, also in the 1995 Draft Report (Option 4). Both the 1995 BRS Report and the 1995 Draft Report, on the basis of an extensive examination of data, conclude that imports of the salmon products further examined under specified conditions represent negligible risk and should be allowed. Both reports also question the rational basis of the current heat-treatment requirements. 457 In our view, the above elements suggest (1) that the level of protection currently achieved by the heat-treatment requirement (which has, as we found earlier, not been "based on" a risk assessment 458 is unclear and possibly not as high or conservative as Australia submits and (2) that, therefore, the level of protection which would be met, in particular, by Option 2 (the 1995 BRS Report recommendations), according to the 1996 Final Report posing risk most similar to the measure currently imposed, and Option 4 (the 1995 Draft Report recommendations), both Options having based their recommendations on a thorough scientific analysis, would also achieve Australia's current level of protection (reached by the heat-treatment requirement imposed) and might even exceed it. 8.179 Third, we recall that Australia confirmed that its level of protection for the salmon products further examined remained unchanged between the 1995 Draft Report (recommending that imports of these salmon products be allowed) and the 1996 Final Report (suggesting maintenance of the prohibition). We further recall that Australia has not convinced us of the reasons why this rather substantial change in conclusions reached by these reports occurred. 459 We recall, in particular, that the experts advising the Panel unanimously stated that no relevant new scientific evidence occurred between the two reports which could explain the reversal. 460 If this is true, there would seem to be no reason (i.e., no new scientific evidence) why the recommendations of the 1995 Draft Report (Option 4) would no longer meet Australia's (unchanged) level of protection. On this ground, there would, a fortiori, be no reason why Option 2, according to Australia the most stringent alternative, would not achieve Australia's level of protection. 8.180 Fourth, with respect to what Australia identifies as the most liberal option, i.e., Option 5 which would "[p]ermit importation of product that complies with current international standards", namely evisceration, the OIE expert advising the Panel stated the following: "The FDC [Fish Diseases Commission of the OIE] considered this point carefully and is unanimous in the opinion that evisceration of fin fish (e.g. salmonids in this case) provides a very high level of safety against transmission of disease and that none of the notifiable or other significant diseases are likely to be transported with such products. Thus the FDC has judged that eviscerated products fall outside the concern of the FDC". 461 (underlining added) "The differing health conditions in various member countries (both exporting and importing) are a concern; however, it is impractical to have different recommendations for each country. This is why the FDC has tried to set minimum standards that can be applied worldwide but encouraged countries to engage in bilateral negotiations where there are differences of opinion regarding quality of fish health services, presence of other pathogens of concern, etc. This flexibility, however, extends only to live fish, live gametes, and uneviscerated fish. As stated above, the FDC currently regards eviscerated fish to represent a minimal risk that does not warrant restriction of trade". 462 Given the repeated reference made in the SPS Agreement to the relevant international organizations, in this dispute the OIE, and the recommendations they produce (e.g., Articles 3.1 and 5.1) 463, as well as to the more general objective of harmonization (e.g., Articles 3.4 and the sixth preamble), we consider that appropriate weight should be given to this opinion on Option 5. 464 However, in so doing we do not endorse evisceration as a measure which would meet Australia's level of protection nor do we disregard the evidence before us in regard to the relative effectiveness of evisceration, depending on the disease concerned and the tissues in which it can be found. 465 Since Option 2 is, according to Australia, still more risk-reducing than Option 5, this opinion a fortiori applies to support the contention that Option 2 could, indeed, be said to meet the level of protection actually met by the measure in force. 8.181 On the basis of all four factors outlined above, considered cumulatively, we consider that Canada has raised a presumption that there are other measures available, in particular Option 2 set out in the 1996 Final Report, which would "achieve [Australia's] appropriate level of sanitary ... protection" in the sense of the second element under Article 5.6 and that Australia has not provided sufficient evidence to rebut that presumption. We find, therefore, that in the present dispute the second element under Article 5.6 is fulfilled. We make this finding on the basis of the evidence before us which, in our view, constitutes a presumption - which has not been rebutted - that there are alternative measures available which would meet Australia's appropriate level of protection. Our finding does, therefore, not endorse any of the alternative options we examined. It does not imply that Option 2 would actually achieve Australia's appropriate level of protection nor does it imply that Option 2 would be the only option which could achieve that level. (c) an alternative measure which is "significantly less restrictive to trade" than the sanitary measure contested 8.182 We finally address the third element under Article 5.6: the alternative measure needs to be "significantly less restrictive to trade" than the measure contested. Canada argues that all four alternative options set out in the 1996 Final Report are significantly less trade restrictive. In its request for access to the Australian market, Canada examined in particular headless, eviscerated product and advocated that these products could be safely imported. 466 We recall that the measure imposed by Australia (in effect, certain heat treatment requirements) prohibits the importation into Australia of fresh, chilled or frozen salmon, including the salmon products further examined. 467 All four alternative options outlined above would allow imports of the salmon products further examined, albeit under specific conditions (e.g., the salmon products would have to be retail-ready fillets, eviscerated, headless or gilled, etc...). We consider that even imposing the most stringent of these specific conditions would still be significantly less restrictive to trade than an outright prohibition. As opposed to any of the other conditions, heat treatment actually changes the nature of the product and limits its use. Heat-treated salmon can obviously no longer be consumed as fresh salmon. Eviscerated, headless or filleted salmon, on the other hand, can either be consumed as fresh salmon or cooked salmon. 468 We consider, therefore, that Canada has raised a presumption that all four alternatives outlined in the 1996 Final Report are "significantly less restrictive to trade" than the measure in dispute and that Australia has not rebutted this presumption. We thus find that in the present dispute the third element under Article 5.6 is fulfilled. (d) Summary 8.183 We have found above that all three elements required in Article 5.6 in order to find a violation of Article 5.6 are present in this dispute. We thus find that Australia by maintaining the measure at issue acts inconsistently with Article 5.6. 6. Canada's claims under Articles 2 and 3: "Basic Rights and Obligations" and "Harmonization" 8.184 Since we have found that the measure in dispute is inconsistent with the requirements of Articles 5.1, 5.5 and 5.6 and is, on that ground, also inconsistent with the requirements of Articles 2.2 and 2.3, we see no need to further examine Canada's other claims under Article 2 nor its claims under Article 3. E. ARTICLE XI OF GATT 1994 8.185 Since we have found that the measure in dispute is inconsistent with the requirements of the SPS Agreement, we see no need to further examine whether it is also inconsistent with Article XI of GATT 1994. IX. CONCLUSIONS 9.1 In light of the findings above, we reach the following conclusions: (i) Australia, by maintaining a sanitary measure which is not based on a risk assessment, has acted (both in so far as the measure applies to salmon products at issue from adult, wild, ocean-caught Pacific salmon and the other categories of salmon products in dispute), inconsistently with the requirements contained in Article 5.1 of the Agreement on the Application of Sanitary and Phytosanitary Measures and, on that ground, has also acted inconsistently with the requirements contained in Article 2.2 of that Agreement; (ii) Australia, by adopting arbitrary or unjustifiable distinctions in the levels of sanitary protection it considers to be appropriate in different situations (on the one hand, the salmon products at issue from adult, wild, ocean-caught Pacific salmon and, on the other hand, whole, frozen herring for use as bait and live ornamental finfish), which result in discrimination or a disguised restriction on international trade, has acted inconsistently with the requirements contained in Article 5.5 of the Agreement on the Application of Sanitary and Phytosanitary Measures and, on that ground, has also acted inconsistently with the requirements contained in Article 2.3 of that Agreement; (iii) Australia, by maintaining a sanitary measure (with respect to those salmon products at issue from adult, wild, ocean-caught Pacific salmon) which is more trade-restrictive than required to achieve its appropriate level of sanitary protection, has acted inconsistently with the requirements contained in Article 5.6 of the Agreement on the Application of Sanitary and Phytosanitary Measures. Since Article 3.8 of the DSU provides that "[i]n cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment", we conclude that to the extent Australia has acted inconsistently with the SPS Agreement it has nullified or impaired the benefits accruing to Canada under the SPS Agreement. 9.2 We recommend that the Dispute Settlement Body request Australia to bring its measure in dispute into conformity with its obligations under the Agreement on the Application of Sanitary and Phytosanitary Measures. ANNEX 1 The Four Comparisons Under Article 5.5 COMPARISON 1 Disease of concern Disease occurence469 Treatment of imports Canadian adult, wild, ocean-caught Pacific salmon, for human consumption This disease agent has not been detected in Canadian adult, wild, ocean-caught Pacific salmon470 banned Pacific herring, Cod, Haddock, Japanese eel, Plaice, for human consumption Aeromonas salmonicida (atypical strain) This disease agent has been detected in uncooked: 471 Pacific herring Cod Haddock Japanese eel Plaice     allowed access allowed access allowed access allowed access allowed access ANNEX 1 (cont'd) The Four Comparisons Under Article 5.5 COMPARISON 2 Diseases of concern Disease occurrence Treatment of imports Canadian adult, wild, ocean-caught Pacific salmon, for human consumption These disease agents have not been detected in Canadian adult, wild, ocean-caught Pacific salmon472 banned Pacific herring, Atlantic and Pacific cod, Haddock, European and Japanese eel and Dover sole, for human consumption Viral haemorrhagic septicaemia virus (VHSV) Infectious pancreatic necrosis virus (IPNV) VHSV has been detected in uncooked: 473 Pacific herring Atlantic cod Pacific cod Haddock European eel     allowed access allowed access allowed access allowed access allowed access IPNV has been detected in uncooked: 474 Cod European and Japanese eel Dover sole     allowed access allowed access allowed access ANNEX 1 (cont'd) The Four Comparisons Under Article 5.5 COMPARISON 3 Diseases of concern Disease occurrence Treatment of imports Canadian adult, wild, ocean-caught Pacific salmon for human consumption Aeromonas salmonicida (atypical strain) Erythorcytic necrosis virus Only IHNV has been detected in Canadian adult, wild, ocean-caught Pacific salmon475 banned Whole, frozen herring for use as bait Infectious haematopoietic necrosis virus (IHNV) Viral haemorrhagic septicaemia virus (VHSV) Pacific herring476: All four disease agents have been detected477 Atlantic herring: only Erythorcytic necrosis virus has been detected478 allowed access COMPARISON 4 Diseases of concern Disease occurrence Treatment of imports Canadian adult, wild, ocean-caught Pacific salmon, for human consumption Aeromonas salmonicida (atypical strain) Yersinia ruckeri Edwardsiella tarda None of these disease agents has been detected in Canadian adult, wild, ocean-caught Pacific salmon banned Live ornamental finfish Infectious pancreatic necrosis virus (IPNV) Vibrio anguillarum All five disease agents have been detected in Live ornamental finfish479 allowed access To continue with Australia - Measures Affecting Importation of Salmon: Annex 2 443 We noted earlier that we saw no need to clearly define or quantify this level (para. 8.107). We recall, however, Australia's statement that its level of protection with respect to the salmon products further examined is high or "very conservative" and aimed at reducing risk to "very low levels", "while not based on a zero risk approach" (Ibid.). We also recall that QP86A itself provides that salmon products may enter Australia only if they have been subject to "such treatment as in the opinion of the Director of Quarantine is likely to prevent the introduction of any infectious or contagious disease" (emphasis added, para. 8.10). 444 Para. 8.107. 445 1996 Final Report, pp.62-65, at p.62. 446 Ibid., p.69. 447 Ibid., p.70. For similar statements see Section 4 of the 1996 Final Report ("A Response to Key Issues Raised in Submissions to the Revised Draft Import Risk Analysis"), pp.325, 327 and 385. 448 However, answering a question from the Panel at the interim review meeting, Australia stated that of the options set out in the 1996 Final Report, Option 1 comes closest to the measure currently in place. 449 Para. 8.173. 450 1996 Final Report, at p.62: "Option 5 represents the higher end and option 1 the lower end of the risk continuum; the other options lie between". 451 Ibid., p.70. 452 Para. 8.175 in fine. 453 Ibid., p.69, also pp.62 and 70. 454 Para. 8.99. 455 Para. 8.98. 456 1996 Final Report, p.70. 457 Para. 8.98. 458 Para. 8.99. 459 Para. 8.154. 460 Transcript, paras. 298-303. 461 Winton's answer to Panel Question 24, Winton, answers, p.3. See also Winton, Transcript, paras. 100-101, 305, 326 and 43 ("The OIE Fish Diseases Commission has not considered eviscerated fish to represent a significant risk. But I agree with Dr. Rodgers that probably there is no trade that has zero risk ... in our view, as a series of experts and based on our evaluation of the scientific literature, we do not find scientific evidence that such eviscerated products have constituted a risk in the past. Should such scientific data be forthcoming, we would perhaps modify the types of products or the types of diseases and it is a very dynamic process, and we probably will never get it completely right"). 462 Winton's answer to Panel Question 25, Winton, answers, p.3. 463 Paras. 8.44 ff. and 8.49. 464 Another expert advising the Panel expressed a similar opinion on the effectiveness of evisceration: Rodgers, Transcript, para. 21: "The question of evisceration is also relevant here obviously. I think that we are all in agreement generally that it is an effective means of reducing the level of risk although the level of reduction would largely depend on tissue location of the disease-causing agent and the effectiveness of the evisceration process. Nevertheless, we do not know of any specific cases where fish diseases have been transmitted from one area to another by imported eviscerated salmonids, or in fact other eviscerated fish, any other species of eviscerated fish". See also Rodgers, Transcript, para. 307. 465 In this respect, we refer to the general agreement among parties and experts advising the Panel on this issue that some eviscerated product might still contain some of the disease agents of concern, e.g., in muscle, remnant kidney tissue, bone, skin or blood (see, e.g., Transcript, paras. 21, 90, 99-101, 203-204, 234 and 305-307). 466 1996 Final Report, p.7. 467 Para. 8.19. 468 Out of a total of 66,234 tonnes of Canadian salmon exports in 1996, 50,838 tonnes were fresh and frozen salmon; the rest was canned salmon. As opposed to canned or heat-treated salmon, Canada submits that "recent trends indicate consumer preference for fresh and frozen salmon" (Canada, First Submission, para. 31). Australia seems to recognize this when it states that: "For [Australian] farmed Atlantic salmon [the main salmon species commercialized in Australia] supply to both the domestic and export market is predominantly of whole fresh fish" (Australia, Second Submission, para. 58). 469 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 doing so we simplify the comparison and that a better comparison could be made if more data was available. However, according to our mandate, we have to make an objective assessment of the evidence put before us (Article 11 of the DSU). Our approach should, therefore, not be read to imply that risk assessments should be limited to diseases that have actually been detected nor that they cannot take into account evidence related to scientific research. 470 Final Report, p.136; Canadian answer to original Panel Question 2, p.4. 471 Final Report, p.138 (wide statement); Australian answer to original Panel Question 3, p.6 (for eel); Australian answer to additional Panel Question 3 of 8 December 1997, p.6 (for all fish products compared). 472 For VHSV, Final Report, p.45; for IPNV, Final Report, pp.44 and 197; Australia agrees with this in its answer to original Panel Question 2, pp.4-5. 473 For Pacific herring: Winton, Transcript, para. 236; For Pacific cod and Pacific herring: Final Report, pp.45 and 222; For Pacific cod and herring in general: Australian answer to original Panel question 3, p.7; For Atlantic cod and Haddock: Australian answer to Panel Question 20 put forward at the meeting with experts advising the Panel; For eel: Australian answer to additional Panel question 3 of 8 December 1997, p.6. 474 For cod, sole and eel: Australian answer to additional Panel Question 3 of 8 December 1997, p.6. 475 According to Canada, IHNV is known to occur in these salmon products (Canadian answer to original Panel Question 2, p.4). However, according to the 1996 Final Report, at p.43, IHNV has only been recovered once and this was regarded as "an unusual event". 476 See, in general terms, Winton, Transcript, para. 283, answering the question whether one can say without having done a full risk assessment that bait fish represent higher risk than salmon products: "I could make that statement with a high level of certainty for Pacific herring in North America. As bait fish those fish contain a significantly and quantifiably higher incidence and prevalence of infection than do Pacific salmon". 477 For Aeromonas salmonicida: see Comparison 1, footnote 2; for Erythorcytic necrosis virus: see 1996 Final Report, p.43 and p.182 and Australian answer to original Panel Question 2, p.6; for IHNV: see Australian answer to Panel Question 20 put forward at the meeting with experts advising the Panel; for VHSV: Australian answer to original Panel Question 2, p.7, Winton, Transcript, paras. 236 and 267. 478 Table 6 in Canada's First Submission, pp.79-80. According to Winton, Atlantic herring in the Baltic and North Sea are probably also a major reservoir for VHSV (Transcript, para. 267). 479 Table 7 in Canada's First submission, p.82 and Australian answer to Panel Question 20 put forward at the meeting with experts advising the Panel. See also Winton, Transcript, para. 267.

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