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World Trade |
WT/DS18/R 12 June 1998 (98-2258) Original: English |
Australia - Measures Affecting Importation of SalmonReport of the Panel (Continued) 2.17 On 13 December 1996, the Executive Director of the Australian Quarantine and Inspection Service (AQIS) made a policy determination to maintain the existing quarantine policies for the importation of salmon product. This determination was based on the Salmon Import Risk Analysis (Final Report) and is hereafter referred to as "the December 1996 decision": "The [Chief Veterinary Officer] recommends 'that the status quo for quarantine policies for uncooked salmon products continue' - i.e. that the requests from Canada and US for access for uncooked, wild, adult, ocean-caught Pacific salmonid product not be approved. ... "On the basis of these considerations I have decided that, having regard to Australian Government policy on quarantine and after taking account of Australia's international obligations, importation of uncooked, wild, adult, ocean-caught Pacific salmonid product from the Pacific rim of North America should not be permitted on quarantine grounds." 21 3. International recommendations - the OIE 2.18 The SPS Agreement makes reference, in a number of provisions, to the "relevant international standards, guidelines and recommendations". Annex A:3(b) of the SPS Agreement states that the international standards, guidelines and recommendations relevant for animal 22 health and zoonoses are those developed under the auspices of the Office international des épizooties (hereafter the "OIE"). These standards, guidelines and recommendations are contained in OIE's "International Aquatic Animal Health Code". 2.19 The OIE is an international inter-governmental organization created in 1924. In November 1997 it had 147 member countries. Its main objectives are to:
2.20 The OIE operates under the authority and control of its International Committee which is made up of delegations from the member countries. The International Committee adopts resolutions drawn from the work of subordinate commissions (the Administrative Commission, the Regional Commissions and the Specialist Commissions). One of the specialist commissions is the OIE Fish Diseases Commission (FDC). The FDC was established in 1960. In May 1995, the FDC formally adopted the OIE's "International Aquatic Animal Health Code" (hereafter referred as to the "Code"), and the "Diagnostic Manual for Aquatic Animal Diseases" (the "Manual"). The aim of the Code is to facilitate international trade in aquatic animals and aquatic animal products by "providing detailed definitions of minimum health guarantees to be required of trading partners in order to avoid the risk of spreading aquatic animal diseases. These guarantees are based on inspection by Competent Authorities23, epidemiological surveillance, and standard methods for laboratory examinations and disease diagnosis". The Code and Manual are updated on a yearly basis at the OIE General Sessions, in May. 24 References in this report are to the Code as updated in May 1997. 2.21 The diseases in the Code are divided into Diseases Notifiable to the OIE (hereafter "Notifiable Diseases") and Other Significant Diseases (hereafter "Other Diseases"). 2.22 According to the OIE Code, Notifiable Diseases cover those diseases "that are generally regarded as having the potential for serious damage to the national aquacultural industries, or wild populations of fish, molluscs and crustaceans. Introduction of these diseases into countries free from them or into countries with national control or eradication programmes could cause significant economic loss. The Veterinary Administrations or other responsible Competent Authorities of such importing countries have an obligation to ensure that new disease agents are not introduced through imports, and to seek adequate protection in international health certificates". 25 Notifiable Diseases are those "considered to be of socio-economic and/or public health importance within countries and that are significant in the international trade of aquatic animals and aquatic animal products". 26 The Code indicates that "... the list of notifiable diseases of aquatic animals includes only major diseases of proven aetiology and limited geographical range ..." (page 109). 2.23 Other Diseases include diseases which: (i) are serious, but have a broad geographic distribution; (ii) those causing significant mortality, are transmissible and are of limited geographic range, but for which the aetiological agent has not yet been identified, or for which diagnostic tests are not yet standardized; (iii) have the potential for causing large losses, but which are too new for geographic range to be defined or for the essential epidemiological elements to be understood. 27 2.24 Among the 24 diseases listed by Australia as of concern relevant to this dispute two diseases are included in the OIE list of Notifiable Diseases and four diseases in the list of Other Diseases (Table 2). 2.25 Section 1.4 of the OIE Code deals with risk analysis. The introduction states that: "The principal aim of import risk analysis is to provide importing countries with an objective and defensible method of assessing the disease risks associated with the importation of aquatic animals. aquatic animal products, .... The analysis should be transparent. This is necessary so that the exporting country may be provided with clear and documented reasons for the imposition of import conditions or refusal to import. Transparency is also essential because data are often uncertain and the distinction between facts and the analyst's value judgements may blur." 28
2.26 Chapter 1.4 then goes on to outline items including: (i) the components of risk analysis (hazard identification, risk assessment, risk management and risk communication) and the sequences of the import analysis process30; (ii) the methodology; and, (iii) documentation of the results of the analysis. Under Article 1.4.1.3 on methodology, the OIE Code notes that a "[r]isk analysis must be able to deal with the complexities of real life situations and no single method is applicable in all cases. For this reason, countries wanting to conduct import risk analyses may find it necessary to design their own process for carrying out the exercise." 4. Australia's import risk analysis 2.27 Following GATT Article XXII consultations in 1994, Australia agreed to document an import risk analysis on the quarantine issues involved with the importation of uncooked salmon meat from North America. Due to the complexity of the task, by arrangement with Canada and the United States, Australia restricted the analysis to the importation of wild, ocean-caught Pacific salmon in the first instance. The risk analysis process involved the preparation of two draft reports, issued in May 1995 and May 1996, and a Final Report of December 1996. The reports included identification of potential disease agents, analysis of disease risks, scientific review of data for salmonid diseases, socio-economic assessment of the potential impact of salmonid disease introduction and identification of options for risk reduction and risk management. The May 1996 and Final Reports also included summaries of issues raised by domestic and international respondents as part of the risk communication process. (See also the response to Question 1 by the experts advising the Panel for a summary of the reports, paragraphs 6.13-6.42.) 2.28 The "May 1995 Draft Report" noted that there had been no evidence of the spread of diseases via fish products for human consumption, despite "the wide scale movement of salmonid product within and between continents". Furthermore, the report listed a sequence of events of which each event had to occur for the imported salmon products to cause an exotic disease to become established in Australia. It was noted that although zero risk was not attainable, the risk of disease introduction might be reduced to negligible values if one or more events in the sequence were extremely unlikely to occur or if a number of events in the sequence had a relatively low probability. The May 1995 Draft Report noted that as with any other importation there was a risk of introducing exotic pathogens via the importation of uncooked salmon product derived from wild, ocean-caught Pacific salmon from Canada and the United States, but that this risk was so small as to not merit continuation of the present quarantine restrictions. The Draft Report concluded that: "the importation of eviscerated, headless, wild, ocean-caught Pacific salmon from Canada and the USA should be permitted, under specified conditions ...". The conditions required, inter alia, that the fish be suitable for human consumption, certified by the appropriate authorities as processed in Federally approved establishments, inspected and graded, sub-adult or mature fish, etc. 31 2.29 In May 1996, AQIS published a revised draft Salmon Import Risk Analysis, "An assessment by the Australian Government of quarantine controls on uncooked, wild, ocean-caught Pacific salmonid product sourced from the United States of America and Canada". (The product considered was eviscerated fish.) The "Revised Draft IRA" took into account comments received by AQIS on the May 1995 Draft Report. The Revised Draft IRA made no specific recommendation to permit or not to permit importation but identified a number of risk management options for consideration. 2.30 In December 1996, the Department of Primary Industries and Energy published the final version of the "Australian Salmon Import Risk Analysis (the "Final Report"). In its conclusions, the Final Report noted that there was a possibility that up to 20 disease agents exotic to Australia might be present in Pacific salmon products and although the probability of establishment would be low, there would be major economic impacts which could seriously threaten the viability of aquacultural operations and the recreational fishing industries, in addition to adverse environmental impacts on the built environment of Australia. The Report considered that should any of the 20 diseases become established, they would almost certainly be ineradicable. The Report went on to note: "It is likely that scientific knowledge will rapidly advance consideration of these issues over the next few years. Australia will review this information as it becomes available. In particular, countries proposing to export fresh salmon to Australia must provide, to the extent possible, improved epidemiological evidence to support assertions of safety of fresh product." On 13 December 1996, the Director of Quarantine decided to accept the recommendation of the Final Report that "...given the unique circumstances, range of potential disease agents and potential socio-economic and environmental impacts, entry of uncooked salmonid products from Canada and the United States not be permitted at this time" and that other issues related to salmon, such as current policies for importing heat-treated salmon, should be considered in the light of priorities recommended by the National Task Force on Imported Fish and Fish Products. 1. Canada's claims 3.1 Canada claimed that the Australia's measure was an illegal import prohibition under Article XI:1 of GATT 1994, that found no justification in Article XI:2 or Article XX or in GATT 1994. 3.2 Australia's measure fell within the definition of a sanitary measure in accordance with Article 1 of the SPS Agreement, and Annex A.1(a) thereto. It was thus subject to that Agreement's provisions. Canada claimed that Australia's measure had not been developed and applied in accordance with the SPS Agreement in that:
3.3 Canada furthermore claimed that Australia's measure had nullified or impaired benefits accruing to Canada under the WTO Agreement pursuant to Article XXIII:1(a) or (b) of GATT 1994. 2. Australia's claims 3.4 Australia claimed that it was for the complaining party to present a prima facie case of inconsistency before the Panel and that it was therefore for Canada, in the first instance, to provide sufficient evidence to raise a presumption that Australia's measure was inconsistent with the rights and obligations under the cited Agreements. Australia claimed that Canada had not satisfied its evidentiary and legal burden of proof in respect of the claims it had made. In so doing, Australia claimed that evidentiary standards had not been met and that there was a need to distinguish between facts and assertion, including in regard to the legal relevance of matters raised by Canada which, in Australia's view represented an attempt to ascribe motive to actions. 3.5 Australia claimed that the Panel should first examine consistency with the SPS Agreement. Australia claimed that unless Canada could successfully demonstrate that Australia's measure did not conform to the provisions of the SPS Agreement, the measure would be presumed to be in accordance with the provisions of GATT 1994, as Article 2.4 of the SPS Agreement provided that if a measure conformed with the provisions of the SPS Agreement the measure was presumed to be in accordance with obligations of Members under the provisions of GATT 1994 which related to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX(b). It would therefore be necessary to first consider the measure against the rights and obligations established under the SPS Agreement. Australia maintained that its measure was in conformity to its obligations under the SPS Agreement. 3.6 Australia further claimed that the Panel's terms of reference did not extend to Canada's claims of non-violation, nullification and impairment under Article XXIII:1(b) of GATT 1994, or to what Australia considered as new claims submitted by Canada in the course of the panel proceedings. Australia also claimed that Article 3 did not have application to the measure at issue. In the alternative, Australia claimed that its measure was not in violation of the SPS Agreement or GATT 1994 and that Canada's claim of non violation could not be sustained. 1. Due Process 4.1 In the course of the Panel proceedings, Australia raised concerns that it was disadvantaged by certain procedures. Australia noted that neither the Final Report nor the December 1996 Decision had been discussed in WTO consultations. Australia had therefore not been in the position to respond to the substance of Canada's claims and arguments until receipt of Canada's First Submission on 29 July 1997. Hence, the time frame for Australia to engage in detailed preparation for the first stage of the panel process had been limited to three weeks. In contrast, Canada had the opportunity of several months in which to prepare its claims since receipt of the Final Report in December 1996. As Canada had not identified the specific matters at issue, as required by Article 6.2, Australia could not reasonably have been expected to anticipate the detail of Canada's claims. Indeed, Canada had altered its claims about the specific measure on several occasions throughout the panel process and had added new claims or rebased its legal claims, including in the final stages of the panel process. Australia drew attention to the Appellate Body Report on India - Patent Protection for Pharmaceutical and Agricultural Chemical Products: "All parties engaged in dispute settlement ... must be fully forthcoming from the very beginning both as to the claims involved in the dispute and as to the facts relating to those claims. Claims must be stated clearly. Facts must be disclosed freely. This must be so in consultations as well as in the more formal setting of panel proceedings. In fact, the demands of due process that are implicit in the DSU make this especially necessary during consultations. For the claims that are made and the facts that are established during consultations do much to shape the substance and scope of subsequent panel proceedings ... in the absence of the inclusion of a claim in the terms of reference, a panel must neither be expected nor permitted to modify rules in the DSU." 32
4.3 Australia further indicated concern in regard to some of the Panel's questions, including Question 12 of 23 January 1998. 33 It was Australia's view that the question invited Canada to raise a legal claim in respect of Article 5.5 which it had elected not to include in its submissions. A respondent could not be expected to rebut a legal claim that had not been raised by the complainant. 4.4 Australia noted that documentary evidence needed to be provided at the earliest stage of a panel process. The appropriate time would have been the time of the lodging of Canada's first submission, during the first substantive meeting between the parties and the Panel. In this regard, a Secretariat paper regarding panel time frames had indicated that all evidence was to be submitted by 7 October 1997. 34 In light of the above, Australia requested that the Panel exclude the "Quantitative analysis of the risk of establishment of Aeromonas salmonicida and Renibacterium salmoniarum in Australia as a result of importing Canadian ocean-caught salmon" by David Vose (the "Vose Report") from its consideration of evidence submitted by Canada, together with the article attached to Canada's Second Oral Argument of 5 February 1998. The original Vose Report had been provided by Canada at the end of December 1997. A partially illegible copy had been received by Australia on 18 December, and a legible copy was not received in Canberra until 23 December; i.e., the beginning of the statutory summer holiday period in Australia. No explanation had been offered by Canada why the evidence had not been provided during the consultations or at the beginning of the panel process. Without prejudice to the admissibility of the Vose Report, Australia drew attention to the fact that this had been revised between 5 and 6 February. On 13 February, Australia had furnished initial written comments on the revised report, but the admissibility of this comment had been contested by Canada. Australia noted also that no effort had been made to subject this evidence from Canada to the same legal scrutiny as the Final Report. 4.5 Canada noted that Australia had received the Vose Report on 18 December 1997. In their view, this had given Australia ample opportunity to consider it and provide comments, which Australia did at the Second Substantive Meeting, on 5 February 1998, and in its 13 February 1998 submission to the Panel. 4.6 In terms of the scope of the dispute, Australia acknowledged that Canada's requests for consultation and a panel extended to fresh, chilled and frozen salmon and was not limited to Pacific salmon. Nonetheless, Australia could not reasonably have been expected to undertake a formal risk assessment on all uncooked salmon of Canadian origin within the time frame in which Canada sought a panel, or for that matter, within the time frames of a panel process. The Final Report was limited to the Pacific product by agreement with Canada, and at no stage had Canada subsequently requested that the product coverage be extended to all Canadian salmon. Canada had not communicated to Australia that it wished to reverse this arrangement until the panel process was under way. Australia, therefore, requested that the Panel limit its findings to fresh, chilled and frozen, adult, wild, ocean-caught Pacific salmon. 4.7 Canada refuted this argument and noted that according to Article 5.1 of the SPS Agreement, it was for Members taking measures to base those measures on an assessment of risk. The obligation was not limited to those instances where another Member requested that a measure be based on a risk assessment. Canada never excused Australia from its obligations under Article 5.1. Australia's obligation under Article 5.1 was not to do a risk assessment, but to base its measure on one. 4.8 Australia contended that Canada had introduced fundamental changes in the nature of its specific legal claims at the final meeting of the parties with the Panel (5-6 February 1998). Canada's oral statement of 5 February was a 44-page document which had the character of a formal written submission in regard to legal claims and rebased legal claims as well as detailed content. It was not a document that was capable of being addressed fully (in respect of legal claims, the legal basis of claims and evidence) overnight or within the space of one week. This was a violation of due process and had put Australia in a disadvantageous position. In this regard, Australia argued that in relation to new or re-based claims, Canada's claim of inconsistency with Article 5.1 had been extended, on 5 February, to include claims in respect of product coverage (heat-treated salmon and salmon other than salmon covered by the scope of the Final Report). Australia argued that heat-treated product had not been addressed in the Final Report for the very reason that Canada had not sought a risk assessment on heat-treated product, for which it already had access, accounting for some $A 10 million of Australia's import of that product. Australia had been reliant on the agreement reached with Canada on the limited scope of the risk assessment, but because of this, currently faced a claim of inconsistency with WTO treaty obligations, a claim which had not been advanced until 5 February. 4.9 Canada stated that Australia had been fully aware since 10 March 1997 that Canada was claiming that Australia had violated Articles 2, 3 and 5 of the SPS Agreement and had done so by way of QP86A and the amendments or modifications to it, which included heat treatment requirements. 35 The requirement of heat treatment and the prohibition on salmon product that had not been heat-treated (i.e. fresh, chilled or frozen salmon) were two sides of the same coin. There was no "new identification of the measure". Canada further noted that the argument that Australia's measure was in violation of Article 5.1 was in Canada's First Submission (paragraphs 165 to 181), and, as the Panel had raised the issue of whether Australia had based its measure, including the requirement of heat treatment, on a risk assessment36, Canada had a right and an obligation to address these issues in its argument. 4.10 Australia further alleged that Canada had introduced a new specific claim that Australia had violated Articles 5.1, 5.2 and 2.2 of the SPS Agreement, on the basis that there was no rational relationship between the measure and the scientific evidence. The basis for this claim had been largely heat-treated product, a claim not previously raised in relation to those provisions. Canada had not clearly identified the basis for its claim in the text of the SPS Agreement. It appeared that Canada was requesting the Panel to make a general judgement whether Australia's measure was rationally supported by the available scientific evidence to achieve Australia's appropriate level of protection, rather than to examine Australia's compliance with specific SPS obligations. Such a request, according to Australia, was in conflict with the DSU (Articles 3.2 and 19.2) in that the findings and recommendations of a panel could not add to or diminish the rights and obligations provided in the covered agreements, as confirmed in the Appellate Body Report EC - Measures Concerning Meat and Meat Products (hereafter "EC - Hormones"): "To adopt a standard of review not clearly rooted in the text of the SPS Agreement itself may well amount to changing that finely drawn balance [in the Agreement] ..." "... between the jurisdictional competences conceded by Members to the WTO and the jurisdictional competences retained by the Members themselves ...." 37 4.11 Canada noted that it had argued throughout the proceedings that Australia's measure was maintained without sufficient scientific evidence. The "rational relationship" between a scientific basis for a measure in Article 2.2 and the "based on" requirement in Article 5.1 reflected the approach taken by the Appellate Body in EC - Hormones. 38 Furthermore, the Panel had itself raised the issue of scientific basis for heat treatment in the written questions that it had put to the Parties at the First Substantive Meeting. 39 4.12 In respect of Article 5.5, Australia claimed that Canada had not previously made a legal claim that the measure resulted in a disguised restriction on international trade, including as a discrete legal obligation under Article 5.5. Hence, Canada had introduced a new claim of inconsistency in regard to purported differences between heat-treated and other salmon. This was an entirely different claim from allegations of differences between live and bait fish and salmon. Canada had, in seeking to demonstrate that the alleged arbitrary or unjustifiable distinctions in Australia's level of protection resulted in a disguised restriction on trade, attempted to infer motive to Australia's decisions. There was a fundamental difference between an attempt to demonstrate a disguised restriction on trade through inferring motive, and presenting evidence based on an analysis of the architecture and structure of Australia's measure which Canada had failed to do. Canada was in essence requesting the Panel to undertake a de novo review and had ignored due deference and the standard of review referred to in paragraphs 115 to 117 and 244 to 245 of the Appellate Body Report on EC - Hormones. 4.13 Canada noted that it had argued from the outset that Australia had violated Article 5.5 and that there were three elements to a violation of Article 5.5 and that the third element "disguised restriction on international trade" had been satisfied (Canada's First Submission paragraphs 182 to 216 and 197). Furthermore, Canada's argument in its Second Oral Statement reflected the approach of the Appellate Body in EC - Hormones. 4.14 Australia further maintained that in regard to Article 3.3, Canada had not previously requested the Panel to make a finding of violation in respect of Article 3.3. The legal claim had been one of inconsistency with Article 3.1. Australia noted that it did not have benefit of WTO consultations in which to address the specific claims of Canada in relation to the Article 3. Article 3 was not identified in Canada's request for consultations, but in keeping with the objective of WTO dispute resolution, Australia agreed to discuss Canada's claims in respect of Article 3. However, no details were forthcoming at the consultations. Australia's due process concerns had been compounded by the last- minute introduction of a new legal claim by Canada. 4.15 Canada maintained that prior to the Report of the Appellate Body in EC - Hormones, the question of whether Article 3.3 was an exception to Article 3.1 was in issue. However, the Appellate Body had found that Article 3.3 was an obligation in and of itself. Canada's arguments in its Second Oral Statement reflected the Appellate Body's reasoning in EC - Hormones. In addition, Canada argued that "does not meet the conditions of Article 3.3" and "is inconsistent with Article 3.3" was a distinction without a meaningful difference. 4.16 In regard to Article 5.6, Australia argued that Canada had introduced a new legal claim in respect of heat-treated product. Canada's claims that Australia's requirements on heat-treated product were not sufficiently restrictive to achieve Australia's level of protection did not constitute evidence that a significantly less trade restrictive measure was available that would achieve Australia's appropriate level of protection in relation to uncooked salmon. Canada's new legal claims in regard to heat-treated product implied that consistency with Article 5.6 could be assured by placing a quarantine prohibition on heat-treated product. To continue with Australia - Measures Affecting Importation of Salmon: Section 4.17 21 AQIS, File Note by Paul Hickey, Executive Director, 13 December 1996. 22 In Annex A of the SPS Agreement, a footnote on the title "Definitions" indicates that "[f]or the purpose of these definitions, "animal" includes fish and wild fauna ...". 23 A Competent Authority is defined in the OIE Code as "the National Veterinary Services, or other Authority of a Member Country, having the responsibility and competence for ensuring or supervising the implementation of the aquatic animal health measures recommended in this Code." 24 OIE Code, Foreword. 25 OIE Code, p. 63. 26 Ibid., p.7. 27 Ibid., p.109. 28 Ibid, p. 29. 29 Disease number 24 in Table 3. 30 Ibid., Figure 1, p.28. 31 "Draft Import Risk Analysis - Disease risks associated with the importation of uncooked, wild, ocean-caught Pacific salmon product from the USA and Canada", Australian Quarantine and Inspection Service, May 1995, Appendix 6, pp.273-275. 32 Adopted 16 January 1998, WT/DS50/AB/R, para. 94. 33 Question 12: "Can Canada confirm that it is of the view that the contested measure 'results in ... a disguised restriction on international trade' in the sense of Article 5.5? If so, why?" 34 The Panel's Revised Timetable, distributed to Parties on 10 September 1997. 35 The fourth paragraph of Canada's First Submission (28 July 1997) stated that: "The Australian measure at issue is Quarantine Proclamation 86A ("QP86A") and published requirements pursuant to QP86A that together require salmonid product to be heat-treated for certain prescribed durations and temperatures, prior to importation into Australia, ... The result of Australia's measure is to prohibit the importation of salmonid products destined for human consumption that have not been subject to such heat treatment, (hereinafter "uncooked salmon" or "fresh, chilled or frozen salmon"). 36 The Panel's Additional Questions to the Parties of 8 December 1997. Question 11: Australia indicates that it will in the future undertake a risk assessment on "uncanned heat-treated salmon". What requirements currently apply to imports of this product? Is there any difference between "uncanned heat-treated salmon" and salmon treated in accordance with the 1988 Conditions? On what scientific or other basis does Australia currently allow imports of salmon products treated in accordance with the 1988 Conditions? Question 13: To what extent and where precisely in its Final Report has Australia analyzed and compared the risks related to the different sanitary options it considered? To what extent and where precisely in its Final Report did Australia take into account the element of trade restrictiveness in such comparison? 37 Adopted 13 February 1998, WT/DS26/AB/R and WT/DS48/AB/R, para. 115. 38 Ibid., para. 193. 39 Question 23 of 10 September 1997: The 1996 Final Report addresses the risks related to import of uncooked wild caught adult Pacific salmon from Canada and the United States into Australia. Is there any scientific evidence available related to the effectiveness of the technique of cooking (as prescribed by the Australian measure) as a tool to reduce risk (or on the effectiveness of any other alternative suggested in the 1996 Final Report). What is the relationship between the risks alleged in the 1996 Final Report and cooking as a tool to reduce these risks? What is the difference in effectiveness of cooking versus evisceration with respect to the diseases at issue? Question 13 to the experts of 31 October 1997: With respect to the diseases at issue, what is the difference in effectiveness, with regard to reducing the risk of disease transmission, of evisceration as compared to heat treatment of the product? as opposed to full cooking of the flesh of the product? |
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