IV.297 Canada submitted that the phrase "if such distinctions result in discrimination or a disguised restriction on international trade" went to the heart of the purpose of Article 5(5). As the Secretariat Note on the negotiating history stated:

... it was noted that there was still ample scope for governments to succumb to political pressures to protect certain domestic industries from foreign competition through their decisions regarding acceptable levels of risk/sanitary and phytosanitary protection.²³²

Canada argued that a disguised restriction could be found when additional factors not relevant to the protection of health led to the introduction of measures that were more restrictive than necessary to meet legitimate sanitary concerns, albeit presented in the guise of a sanitary measure. To paraphrase the note of the Secretariat, without this discipline, there would be ample scope for governments to succumb to political pressures to protect or achieve certain domestic interests, without regard to their impact on international trade, through their decisions regarding acceptable levels of sanitary protection.²³³

IV.298 Canada submitted that, on the evidence and arguments presented in its submissions, the Panel could infer distinct appropriate levels of protection for the six hormones at issue and for other veterinary drugs commonly used by farmers in the European Communities. It was apparent that, whatever the EC level of sanitary protection for the six hormones at issue, it must be higher than its level for antimicrobial growth promoters, in particular carbadox and olaquindox, and for a number of other veterinary drugs cited in Canada's submissions. Canada claimed that these distinctions were arbitrary and unjustifiable. There was no objective principle that could justify them, since the severity of the potential adverse effects of these other substances were comparable, if not greater. These distinctions resulted in discrimination against Canadian beef imports, and constituted an unwarranted restriction in this trade in the guise of a sanitary measure. In this regard, the EC submissions were telling:

"Of the 31 countries which are authorized to export meat to the EC, only 6 allow for the use of some or all of the hormones at issue here as growth promoters (Argentina, Australia, Canada, New Zealand, South Africa and the USA). These six countries are the main meat producing and exporting countries"²³⁴ (emphasis added).

IV.299 Canada concluded that the EC measures constituted a disguised restriction because additional factors not relevant to the protection of health led to the introduction of measures that were more restrictive than necessary to meet the legitimate sanitary concerns. The European Communities succumbed to political pressures to protect or achieve certain domestic interests, without regard to their impact on international trade, and the effects on exports of Canadian beef to the European Communities had been devastating.

IV.300 The European Communities considered that the phrase "different situations" could only apply to same substances (or residues from the same substances), if they lead to different levels of protection. The European Communities indicated that that it participated actively in the SPS Committee work on consistency guidelines. But guidelines had not yet been established, and the European Communities submitted that Canada made arguments and advanced interpretations which had not yet been agreed. The European Communities stressed that the guidelines invoked by Canada were no more than draft guidelines, prepared by the Chairman of the SPS Committee after the entry into force of the SPS Agreement, in his attempt to develop the guidelines mentioned in Article 5.5. The text of Article 5.5 was not intended to mean and could not be applied in the way interpreted by Canada. In the EC view, the interpretation of Article 5:5 advanced by Canada in this case was contrary to the customary principles of treaty interpretation, because it disregarded the text, object and purpose of that provision and did not make sense from the systematic point of view as long as the SPS Committee had not agreed on the guidelines for its practical implementation.

IV.301 The European Communities argued that Article 5.5 provided for achieving consistency in the levels of protection in "different situations". The situations referred to were mainly trade and marketing situations. The objective was that a Member should apply the same level of protection against the same health hazard whether the hazard arose from domestic production or from imports and, in the case of imports, the same level of protection should be applied in respect of the same hazard in imports from different countries. The words "different situations" could also cover the different elements mentioned in Article 5.2, i.e. process and production methods, inspection, sampling, testing, diseases, ecological and environmental conditions, etc. This did not mean that the measures adopted to achieve the level of protection would always be the same. For example, the European Communities had adopted a high level of protection against foot­and­mouth disease, having eradicated it from its territory by a slaughter policy. However, it imported susceptible animals and their products from many countries, some of which still had the disease. Therefore, in respect of infected countries it imposed conditions on imports which were designed to keep the disease out of its territory. The European Communities did not impose the same measures on domestic production or on imports from other third countries which did not have the disease. Thus, its level of protection was consistent but its measures were different: they were tailored to the risk involved. The European Communities claimed that it had the same policy with regard to hormones. It did not allow the administration of these hormones in meat in its territory and meat imported from a variety of third countries, some of which allowed the use of these hormones for growth promotion, others of which did not. For those which did not, no special conditions were imposed on imports. For those which allowed such use, the European Communities imposed measures on imports which were designed to meet its level of protection.

IV.302 "Different situations" could not mean that the same level of protection must be applied to similar health hazards, whatever their nature or severity, coming from similar substances. The hazards associated with different diseases and contaminants were different in their nature and severity, and affected different species. It would clearly be unreasonable if the SPS Agreement were to be interpreted as requiring Members to adopt the same level of protection against, for example, ringworm in cattle and cholera in humans. It was, however, reasonable to have the same level of protection against each of these diseases regardless of its origin, i.e. whether it arose inside the territory of the Member or as a result of importation. The same applied to contaminants. Hormones had their own particular effects; some of these effects might be similar to, or the same as, other drugs such as carbadox, but some were different and were unique to hormones. The EC level of protection was chosen for protection against all the undesirable effects of hormones, not only cancer which was the most important one. In any case, its level of protection against carcinogenic substances, whatever their source, was consistent. Article 5.5 clearly stated that "arbitrary or unjustifiable" distinctions were to be avoided if they resulted in discrimination or a disguised restriction on trade. If they did not result in discrimination or a disguised restriction on trade they were not prohibited by the SPS Agreement. In the present dispute, however, this provision was irrelevant since the European Communities did not make any distinction in its level of protection between different situations. Its level of protection was the same irrespective of the source of hormones. Of course, its measures to enforce this level of protection differed according to the circumstances of the risk, which in turn differed according to whether hormones were allowed to be used freely for growth promotion, or whether they were allowed to be used only under strict veterinary control for therapeutic purposes.

IV.303 The European Communities argued that its measures resulted in no discrimination. The EC level of protection was designed to protect against particular hazards, not against classes of potential sources of any hazard, such as all "diseases", or, as in this question, all "veterinary drugs". Not all veterinary drugs had the potential to cause adverse health effects in consumers, just as not all human drugs carried the same risks for consumers. For example, morphine and aspirin were both pain­killers but, because of the different degrees of risk associated with them, the former was only available for administration by doctors while the latter was available over the counter, without prescription. Of course the European Communities did not have a level of protection against those hormones produced naturally in the body, any more than it did against any other natural component of the body. As far as other veterinary drugs were concerned, the European Communities had the same level of protection against other carcinogenic drugs as it did for hormones. Its measures were designed to achieve this although, given the different circumstances under which the different drugs were used, they might be different from the measures used for hormones. Nevertheless, they were designed to give the same level of protection. The European Communities did not, therefore, make any distinctions, arbitrary, unjustifiable or other, in its level of protection against the same hazard arising from the same substances in different situations.

IV.304 The European Communities argued that Canada had not shown that there were arbitrary and unjustifiable distinctions in the levels of protection the European Communities was applying for these hormones and the other two substances. The levels for these two different groups of substances were the same, not arbitrary. They were also justified, because there was plenty of scientific evidence which showed that these hormones and their metabolites were carcinogenic even at physiological levels, whereas in the case of carbadox the metabolites which could be found in the muscle were not carcinogenic and in the case of olaquindox the studies of JECFA were still inconclusive. The fact that the European Communities did not agree with the conclusions of the JECFA report on hormones but followed the JECFA report in the case of the other two substances, did not necessarily mean lack of consistency. The different situations in the two case justified the difference in the approach, both on technical and scientific grounds, without however affecting the EC levels of protection.

IV.305 Canada had not shown that the distinctions resulted in discrimination or a disguised restriction on international trade. Canada did not even discuss this condition in depth, but had simply made an automatic assumption that it was fulfilled in this case. The EC measure did not discriminate against Canada, because Canada could export hormone-free meat to the European Communities like any other country. The production of meat treated with hormones was not a specific characteristic of Canada's production, nor was the production of hormone-free meat a peculiar characteristic of meat production in the European Communities. Therefore, there was no discrimination in effect. In order to show discrimination and disguised restriction Canada had argued that the Members which were suffering from the EC measure were the six principal producers of meat in the world. This type of argument enlarged the elements of comparison in an unacceptable way. But even this class of countries was not treated differently among themselves, on the one hand, and the other meat producing countries (e.g. Argentina) on the other, because any one of them could export hormone-free meat to the European Communities under exactly the same conditions as those applied to all other third countries as well as within the European Communities. In addition, Canada had not shown what other measure, apart from lifting the prohibition, the European Communities could take in this case which would not be disguised and would achieve its appropriate level of protection. Canada had certainly not demonstrated that it had been the intention of the European Communities when adopting its level of protection was to put in place a disguised restriction on international trade. If Canada was affected, it was because of its decision not to comply with the possibilities offered by the EC measures. For instance, the European Communities would import pig meat from Canada treated with carbadox or olaquindox under the same conditions allowed in the European Communities.

(l) Article 5.6 of the SPS Agreement

IV.306 Canada noted that Article 5.6 prescribed how a Member must ensure that any sanitary measure was applied only to the extent necessary to protect human, animal or plant life or health and stressed that in effect, Article 5.6 set out how a Member was to meet this basic requirement of Article 2.2:

"Without prejudice to paragraph 2 of Article 3, when establishing or maintaining sanitary or phytosanitary measures to achieve the appropriate level of sanitary or phytosanitary protection, Members shall ensure that such measures are not more trade-restrictive than required to achieve their appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility."

A footnote to the paragraph provided that:

"For the purposes of paragraph 6 of Article 5, a measure is not more trade-restrictive than required unless there is another measure, reasonably available taking into account technical and economic feasibility, that achieves the appropriate level of sanitary and phytosanitary protection and is significantly less restrictive to trade."

IV.307 In Canada's view, it was clear that under the Feed Additives Directives, the European Communities maintained regulatory control over antimicrobial growth promoters that was significantly less restrictive to trade than the complete ban on the use for growth promotion of the six hormones at issue. Moreover, the European Communities itself asserted that its appropriate level of protection was the same for carbadox as it was for these hormones. If this was the case, then it was clear that the prohibition on beef from cattle treated with the six hormones at issue was far more trade-restrictive than required. The risks posed by carbadox were greater than those posed by the six hormones at issue and there was no technical or economic reason why a similar scheme could not reasonably be extended to these six hormones. Canada's position was that the EC measures were more trade restrictive than necessary to achieve the level of sanitary protection achieved by the Feed Additives Directives, and therefore the EC measures were contrary to Article 5.6.

IV.308 The European Communities noted that Article 5.6 required measures to be "not more trade-restrictive than required to achieve the appropriate level of protection" and argued that there was no obligation to change the level of protection. The footnote to Article 5.6 explained that a measure was not more trade-restrictive than required unless there was another measure which was less trade-restrictive and still met the chosen level of protection, taking into account technical and economic feasibility. In these circumstances, it was up to a complaining Member to demonstrate that there was such another measure.

IV.309 Noting that labelling might seem to be a reasonable alternative to the prohibition applied by the European Communities on the use of these hormones for growth promotion, the European Communities argued that the starting point to take into account was that the residues of these hormones posed very serious risks to human and animal health, of which cancer was the most important. It might be that the probability of this risk arising was relatively small, as Dr. Lucier, one of the experts advising the Panel had argued, but the SPS Agreement did not require a quantification of the risk and the level of sanitary protection a Member determined to be appropriate could be zero risk. Either there was a risk or not; if there was one, no matter how small, a Member was allowed not to accept that risk. Some parts of the population could not cope with labelling (could not read, could not understand, etc.), so the competent authorities had to assume their responsibilities to the public. Labelling, therefore, was inherently contradictory with a level of no risk from residues of these hormones.

IV.310 The European Communities observed that labelling might function in Members which had a lower level of protection than the European Communities in this case. There might indeed be consumers in Canada who would prefer hormone-free meat. In that situation, it was conceivable to think of labelling meat as "hormone-free" meat. Conversely, labelling could not work where the level of protection was higher. Imports of meat labelled treated with hormones, if allowed, would undermine the level of protection in the European Communities as EC farmers would also like to produce meat with the hormones in order to avoid unfair competition from imported cheap labelled meat. But this might expose the entire population in the European Communities to an involuntary risk, because a person could not verify whether meat served in a restaurant was hormone-free. Unlike other pre-packed and labelled food products, where the original producer was indicated and could be traced back in order to impose sanctions in case of violations, labelling was not easily applicable to meat sold for human consumption.

IV.311 The European Communities claimed that involuntary exposure to a risk, no matter how small, could not be labelled. This concept was included in Article 5.5, where reference was made to the "exceptional character of human health risks to which people voluntarily expose themselves". Labelling of a packet of cigarettes was not the same as labelling meat. Smoking and eating were not the same type of activity and the voluntary/involuntary nature of the exposure to the risk was very important. When the European Communities imported meat from countries where the use of growth promoting hormones was authorized, it relied first on the guarantees given by the governmental authorities of that Member that the imported meat was hormone-free meat. In addition, the European Communities carried out a number of systematic and random controls and checks in order to verify whether the assurances given by the state authorities were respected. With labelling, there would be no such state assurances, as labelling would be an initiative of private farmers. The number of controls and checks would therefore have to increase substantially without any certainty that there would be no violations of the level of protection.

IV.312 In contrast, the European Communities noted that the labelling of meat as BSE-free in no way affected the level of protection a Member had adopted against BSE. It made no difference whether there were incidences of BSE recorded in the country or not, because in both situations the objective was to eradicate or to avoid the potential source of the risk from BSE infected meat. Labelling in this type of situations, therefore, reinforced the level of protection a Member had already put in place and was not likely to undermine it. Conversely, the situation of labelling meat treated or not treated with hormones was completely different.

3. Agreement on Technical Barriers to Trade

IV.313 Canada submitted the following submissions alternatively, in case the Panel decided that the matters at issue were not governed by the SPS Agreement. Canada argued that the TBT Agreement did not apply to sanitary measures and recalled that Article 1.5 of the TBT Agreement read as follows:

"The provisions of this Agreement do not apply to sanitary and phytosanitary measures as defined in Annex A of the Agreement on the Application of Sanitary and Phytosanitary Measures."

If the EC measures were not characterized as "sanitary and phytosanitary measures", then they fell within the disciplines of the TBT Agreement as "technical regulations".²³⁵

IV.314 Canada noted that the TBT Agreement set out two basic obligations with respect to technical regulations, in Articles 2.1 and 2.2. Neither of these obligations had been met by the EC measures at issue. Canada had argued that the EC measures had created obstacles to Canadian trade by stopping the importation by the European Communities of Canadian beef produced with growth promoting hormones. What remained to be determined by the Panel was whether these obstacles were more trade-restrictive than necessary to fulfil a legitimate objective.

IV.315 Canada recalled its previous arguments that (paragraph 4.6), the EC measures were motivated by four sets of concerns: first, anxiety regarding the danger to human health; second, the pressure of public opinion; third, the economic consequences of a "sensationalist campaign"; and fourth, the distortions in the conditions of competition among the EC member States owing to dissimilar provisions and regulations governing the manufacture, distribution and use of substances. Canada argued that while protection of human health was among the policy objectives listed in Article 2.2, this in itself did not justify a complete import prohibition. As Canada had demonstrated, the EC import prohibition lacked scientific justification. The European Communities had failed to prove that an import prohibition was necessary to provide protection to the health of its consumers. Furthermore, it had also been demonstrated (see paragraphs 4.42, 4.54, 4.225) that the European Communities maintained regulatory control over antimicrobial growth promoters that was significantly less restrictive to trade than the complete ban on the use for growth promotion of the six growth promoting hormones and the import prohibition of beef produced outside the European Communities with the same hormones. Thus the EC measures were more trade restrictive than necessary, in contravention of Article 2.2 of the TBT Agreement.

IV.316 Canada claimed that a panel examining a measure under Article 2.1 must determine if the measure in question was a measure to which the provision applied (i.e. whether it was a technical regulation), if the products in question were like products, and if the measure resulted in less favourable treatment for the imported Canadian product than for the like domestic and imported products.

IV.317 Canada noted that Article 2.1 of the TBT Agreement incorporated the non-discrimination principles set out in GATT Articles I and III but was broader. There was no language in Article 2.1 that qualified or limited the scope of the non-discrimination obligations in the TBT Agreement. While Article 2.1 was broader than GATT Articles I and III, there was an obvious link between these provisions. Although a panel assessing the consistency of a measure with Article 2.1 might be guided generally by the type of analysis that might be conducted under GATT Articles I and III, it was not required to adhere rigidly to the precise form of such analysis. In Canada's view, beef produced with growth promoting hormones was a "like product" to beef produced in the European Communities from animals to which the same growth promoting hormones had been administered for therapeutic reasons, and "like" beef that contained residues of antimicrobial growth promoters and other veterinary drugs. Canada submitted that by excluding Canadian beef from the EC market, the European Communities had treated Canadian products less favourably than like products of EC origin, in contravention of Article 2.2 of the TBT Agreement.

IV.318 The European Communities reaffirmed that the main purpose of the measures at issue was to protect human health from the risks arising from the consumption of meat from animals treated with growth promoting hormones. In view of the definition of SPS measures under the SPS Agreement, the European Communities considered it to be beyond doubt that the measures at issue were "sanitary measures" within the meaning of the SPS Agreement. Therefore, the EC arguments on TBT were, like the Canadian arguments, presented in the alternative. If, the Panel decided that the measures at issue were not "sanitary measures" but "technical regulations" subject to the TBT Agreement, the European Communities submitted that, contrary to Canada's claims, they did not infringe either Article 2.1 or Article 2.2 of that Agreement.

IV.319 Article 2.1 of the TBT Agreement restated the national treatment obligation contained in Article III:4 of GATT and the most favoured nation obligation contained in Article I:1 of GATT. The European Communities claimed that as far as the national treatment obligation was concerned (the only one whose violation had been invoked by Canada), Article 2.1 of the TBT Agreement and Article III:4 of GATT laid down the same type of obligation: not to afford "less favourable treatment" to imported products than to domestic like products. The only difference between the two provisions was that Article 2.1 of the TBT Agreement applied only in respect of technical regulations, while Article III:4 of GATT applied in respect of "all laws, regulations and requirements ...". It followed that no violation of Article 2.1 could be established unless Article III:4 of GATT was simultaneously infringed. For the same reasons that the measures at issue did not infringe Article III:4 of the GATT (paragraph 4.337 ff.), EC measures were consistent with Article 2.1 of the TBT Agreement.

IV.320 The primary purpose of the EC measures was to protect human health. This was one of the "legitimate objective" expressly mentioned in Article 2.2 of the TBT Agreement. As evidenced by the precedent discussion on the application of the SPS Agreement, the EC measures were not more "trade restrictive" than necessary in order to fulfil this objective. Therefore, the European Communities maintained its measures were consistent with Article 2.2 of the TBT Agreement.

4. GATT

(a) Article III

IV.321 Canada submitted that the EC measures contravened Article III or XI of GATT. Although it considered that there was a threshold question under the GATT whether this matter was governed by Article III by virtue of the Interpretive Note Ad Article III, or by Article XI, Canada was of the view that this matter would be more appropriately addressed under Article III than Article XI.

IV.322 Canada recalled that Article III:1 of GATT read as follows:

"The contracting parties recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production" (emphasis added).

IV.323 The Appellate Body, in its decision in "Japanese Liquor Tax"²³⁶ had commented on the relationship between Article III:1 and the other paragraphs of Article III as follows:

"Article III:1 of the GATT articulates a general principle that internal measures should not be applied so as to afford protection to domestic production. This general principle informs the rest of Article III."²³⁷

IV.324 Canada argued that in the present case the most relevant part of Article III:4 was paragraph 4, which provided:

"The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use ..."

IV.325 The report of the Appellate Body in "Japanese Liquor Tax" had cited with approval the 1970 Working Party Report on "Border Tax Adjustments" as setting out the "... basic approach for interpreting "like or similar products" generally in the various provisions of the GATT 1947".²³⁸ The Appellate Body had quoted the following passage of the report of the Working Party:

"(...) the interpretation of the terms should be examined on a case-by-case basis. This would allow a fair assessment in each case of the different elements that constitute a 'similar' product. Some criteria were suggested for determining, on a case-by-case basis, whether a product is "similar": the product's end-uses in a given market; consumers' tastes and habits, which change from country to country; the product's properties, nature and quality (...)."²³⁹

IV.326 The Appellate Body, in the same case, had further commented on the tests to determine what constituted a "like product", in particular in the context of Article III:2:

"No one approach to exercising judgement will be appropriate for all cases. The criteria in "Border Tax Adjustments" should be examined, but there can be no one precise and absolute definition of what is "like". The concept of "likeness" is a relative one that evokes the image of an accordion. The accordion of "likeness" stretches and squeezes in different places as different provisions of the WTO Agreement are applied. The width of the accordion in any one of those places must be determined by the particular provision in which the term "like" is encountered as well as by the context and circumstances that prevail in any given case to which that provision may apply. We believe that, in the context of Article III:2, first sentence of the GATT 1994, the accordion of "likeness" is meant to be narrowly squeezed."²⁴⁰

IV.327 Applying the flexible approach of the 1970 Working Party Report on "Border Tax Adjustments", different indications of likeness had been invoked by various GATT 1947 Panels, e.g. tariff classification,²⁴¹ end-uses²⁴² or physical characteristics of the product.²⁴³ Canada argued that the European Communities did not differentiate in its tariff classification between beef produced with growth promoting hormones, antimicrobial growth promoters or any other veterinary drugs, and beef produced without. Similarly, in the EC meat-grading system no such differentiation was made.²⁴⁴

IV.328 In "Japanese Liquor Tax", the Appellate Body ruled, agreeing with the Panel, that the term "like products" in the first sentence of Article III:2 should be construed narrowly.²⁴⁵ The rule of Article III:4 of GATT was less specific than the rules of Article III:2. Therefore, the "likeness" test of Article III:4 of GATT was probably intended to be less stringent than that of Article III:2. Even applying the more stringent test of Article III:2, Canada submitted that its beef was a like product when compared with EC beef.

IV.329 Canada emphasized that in the present context "likeness" was not the same as "being identical". The burden was not on Canada to prove that beef produced with growth promoting hormones was the same as other beef. Rather, Canada must prove that beef produced with growth promoting hormones was sufficiently similar to EC beef, i.e. beef containing residues of antimicrobial growth promoters and other veterinary drugs, to establish that a national treatment violation has occurred. Canada referred to an EC document entitled "Communication from the Commission to the Council and to the European Parliament on control of residues in meat - Hormones - Beta-Agonists - Other Substances", which stated:

IV.330 "The results of the enquiry [on residues in meat, initiated by the Commission, following a request of the European Parliament] showed that:

• anabolic substances (hormones and beta-agonists) were generally available, leading to illegal use;
  
• antibiotic and sulphonamide residues were frequently found in meat, especially in the case of intensive livestock rearing systems (veal calves, young fattening bovines, and fattening pigs);
  
• other residues were detected occasionally (heavy metals including cadmium, pesticides, antiparasitic substances) ..."²⁴⁶ (emphasis added).
  

IV.331 Canada claimed that the physical characteristics of beef produced from animals treated with growth promoting hormones were indistinguishable for the consumer from beef produced without the use of growth promoting hormones. The use of growth promoting hormones resulted in beef of higher quality because the animals concerned had better carcass composition, with a greater lean-to-fat tissue ratio. This had been confirmed in the above-mentioned Communication from the Commission to the Council.²⁴⁷ Chemical analysis of the beef might be able to identify beef produced from animals treated with growth promoting hormones in certain instances. However, a document commissioned and published by the Commission admitted that this was virtually impossible with regard to oestradiol-17b, testosterone and progesterone. The report commented in this regard:

"To our present knowledge up to now distinctions between untreated animals and those treated with oestradiol-17b, testosterone and progesterone can only be made on a quantitative and not a qualitative basis. This statement is based on the fact that the three steroids mentioned above (oestradiol-17b, testosterone and progesterone) will enter the same metabolic pathways, regardless of whether they are of endogenous or exogenous origin. Thus treated animals can only be identified if their tissue levels significantly exceed those of untreated animals; if such a situation is detected it further has to be verified that the particular animal showing this levels [sic] was clinically sound and that no reproductive problems, such as cystic ovaries or tumours of sex hormone producing organs had been present at slaughter"²⁴⁸ (emphasis added).

IV.332 A 1987 Monograph issued by the JECFA had confirmed the above conclusion in respect of progesterone.²⁴⁹ The difficulty of distinguishing beef produced with the three natural growth promoting hormones from other beef had also been confirmed in a 1994 article by Dr. Stephen F. Sundlof.²⁵⁰

IV.333 Canada claimed that this showed that it was very difficult, if not impossible, to distinguish, even through chemical analysis, between beef produced with natural growth promoting hormones and beef produced without; and that these differences in production methods did not result in products that were "unlike" beef produced in the European Communities. In any event, the European Communities continued to permit the use of oestradiol-17b, progesterone and testosterone for therapeutic purposes and had not prohibited the sale and consumption of the beef derived from animals treated with these hormones. This reinforced the point that it was difficult, if not impossible, to distinguish in the European Communities between beef from cattle that had been treated with these hormones and those that had not.

TO CONTINUE WITH EC MEASURES CONCERNING MEAT AND MEAT PRODUCTS (HORMONES) COMPLAINT BY CANADA

²³² WTO Secretariat, "Consistency in Risk Management Decisions", G/SPS/W/16, p.3, para. 7.

²³³ Ibid., p.3, para. 7.

²³⁴ European Communities' first written submission, para. 91.

²³⁵ Annex 1 of the TBT Agreement defines a technical regulation as a "Document which lays down product characteristics or their related processes and production methods ... with which compliance is necessary ...".

²³⁶ "Japan - Taxes on Alcoholic Beverages" (AB-1996-2; WT/DS8/AB/R; WT/DS10/AB/R; WT/DS11/AB/R; 4 October 1996).

²³⁷ Idem., p.18.

²³⁸ Idem., p.20.

²³⁹ Report of the Working Party on "Border Tax Adjustments", L/3464, adopted on 2 December 1970, BISD 18S/97, 102, para. 18.

²⁴⁰ Appellate Body, "Japan - Taxes on Alcoholic Beverages" (AB-1996-2), p.21.

²⁴¹ For example, see the 1978 panel report on "EC - Animal Feed Proteins", BISD 25S/49, 63, paras. 5.47-5.49.

²⁴² For example, see the 1987 panel report on "United States - Taxes on Petroleum and Certain Imported Substances", BISD 34S/136, 154-155, para. 5.1.1.

²⁴³ For example, see the 1992 panel report on "US - Measures Affecting Alcoholic and Malt Beverages", which held that low alcohol beer and high alcohol beer were like products, BISD 39S/206, 293-294, para. 5.71-5.74.

²⁴⁴ Regulations 1208/81/EEC, 2930/81/EEC and 1026/91/EEC.

²⁴⁵ WT/DS8/AB/R; WT/DS10/AB/R; WT/DS11/AB/R, pp.19 and 20.

²⁴⁶ Communication from the Commission to the Council and to the European Parliament on Control of Residues in Meat - Hormones - Beta-Agonists - Other Substances COM(93) 167 final 21 April 1993, para. 5.

²⁴⁷ Ibid.., para. 23.

²⁴⁸ R.J. Heitzman, ed., "Veterinary Drug Residues: Residues in food producing animals and their products: Reference Materials and Methods", 2nd ed., (Oxford: Blackwell Scientific Publications, 1994), p.7/5.

²⁴⁹ "Residues of some veterinary drugs in animals and foods", Monographs prepared by the Thirty-Second Meeting of the Joint FAO/WHO Expert Committee on Food Additives, Rome, 15-23 June 1987, FAO Food and Nutrition Paper 41 (Rome: FAO, 1988) p.22:

"As with other endogenous steroid hormones, residue levels of progesterone in tissues are very low. Progesterone levels were measured in tissues from treated steers using a radio-immunoassay technique sensitive at the low ng/kg level, and were found to be about 0.4 mg/kg in muscle, liver and kidney and 3.5 mg/kg in fat; these levels can be compared with normal levels of approximately 0.2 mg/kg in muscle, liver and kidney and approximately 2.5 mg/kg in fat from untreated animals.

"Progesterone, like oestradiol-17b and testosterone, occurs naturally in mammals, and is normally present in the dairy products and the tissues of untreated animals. In the edible tissues of animals treated with progesterone in combination with oestradiol-17b, residue levels are up to twice as high as in the tissue of untreated animals. However, the levels of progesterone found in the meat from animals treated with implants according to good animal husbandry practice are extremely low when compared to the amounts of endogenous progesterone produced daily in human beings. The daily production rate of progesterone in humans is given in Table VII. (Farber and Arcos, 1983). Even in prepubertal boys, the 300 ng additional progesterone derived from a 500 g portion of meat from treated animals is considerably less than the amount of endogenous progesterone produced daily. In addition, for those animal classes studied, the progesterone residue levels in treated animals fell well within the normal range of levels found in untreated bovine animals of different types and ages."

²⁵⁰ S.F. Sundlof, "Human Health Risks Associated with Drug Residues in Animal-Derived Foods" (1994) 1:2 Journal of Agromedicine 5, pp.12-13.