VII. INTERIM REVIEW

VII.1 On 21 May 1997, the European Communities and Canada requested the Panel to review, in accordance with Article 15.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), the interim report that had been issued to the parties on 7 May 1997. The European Communities also requested the Panel to hold a further meeting with the parties to discuss the points raised in its written comments and other points which they would develop during that meeting.

VII.2 We decided to hold concurrent interim review meetings with the parties for both this dispute and the parallel panel requested by the United States. This decision was, inter alia, based on the similarities of both cases and the fact that the interim reports in both cases only differ in the description of the arguments of the parties, whereas the sections dealing with the scientific experts and the legal findings in the two cases are almost identical. In light of that decision, and after consultations with the parties involved, we also decided to make a copy of the sections of our interim report dealing with our consultation with scientific experts and our findings, together with the comments submitted in that regard by the European Communities and Canada, available to the United States. By letter of 3 June 1997, the European Communities objected to both decisions, arguing that they affected due process and its rights of defense and, consequently, its rights and obligations under the WTO Agreement. It made, however, no specific claims of prejudice. Since we could not see how the European Communities could be prejudiced by these decisions, we rejected this objection.

VII.3 In a letter dated 23 May 1997, Canada requested us to rule that, on the basis of Article 15.2 of the DSU, the discussion at the interim review meeting should be limited to only those issues identified in the parties' written comments of 21 May 1991. By indicating that it intended to submit its specific comments on the Panel's findings and conclusions at some time in the future, Canada submitted that the European Communities had failed to state the precise aspects of the findings and conclusions it wished the Panel to review in its written comments of 21 May 1997. Canada argued that the intent of Article 15.2 of the DSU is that the panel and parties are fully aware of issues to be raised at the interim review meeting so they may prepare and make reasoned responses.

VII.4 Article 15.2 of the DSU provides the following:

"... Within a period of time set by the panel, a party may submit a written request for the panel to review precise aspects of the interim report prior to circulation of the final report to the Members. At the request of a party, the panel shall hold a further meeting with the parties on the issues identified in the written comments..." (emphasis added).

It appeared to us that the European Communities, by only enumerating the numbers of the paragraphs of the findings section of our interim report in relation to which it has concerns and not stating in its written comments the precise aspects it wishes the Panel to review, did not respect the wording of Article 15.2 of the DSU. We considered, however, that the main object and purpose of Article 15.2 is to make sure that the other party is aware of the issues which will be raised at the interim review meeting in order to allow it to prepare its rebuttal. In light of the fact that the EC's written request for review of the findings section only related to factual aspects, i.e., the correct reflection of the EC arguments and the names of and references to individual scientific experts, we considered that Canada would not be unduly prejudiced by allowing the European Communities to present these factual points at the interim review meeting. We, therefore, decided that the European Communities could raise these points on the conditions that it would limit itself to factual issues and to the paragraph numbers it had enumerated in its written comments. We note that this decision corresponds to what Canada requested in its letter of 23 May 1997.

VII.5 The Panel met with the parties on 4 June 1997 in order to hear their arguments concerning the interim report. We carefully reviewed the arguments presented by the European Communities and Canada and the responses offered by both sides.

VII.6 The European Communities requested us to find that Articles 15.2 and 15.3 of the DSU and the general principle of due process prevent the Panel from modifying aspects of the interim report on which the parties did not submit comments. However, at the end of the interim review meeting the European Communities appeared to modify this request by asking the Panel to review its findings in light of the factual comments made. Canada submitted that at the interim review stage a panel should only correct factual aspects and arguments made by the parties and, as the case may be, expand on its reasoning or findings. According to Canada, it is inappropriate to change, at the interim review stage, in any fundamental way any of the major findings of fact and law which informed the Panel's conclusion. We considered that no provision in the DSU limits us to only modify those paragraphs commented upon by the parties or to only correct or slightly change factual elements or arguments. Article 15.3 of the DSU only provides that "[t]he findings of the final panel report shall include a discussion of the arguments made at the interim review stage...".

VII.7 The European Communities made two types of comments on the findings section of the interim report. The first concerned 20 paragraphs in which the European Communities is stated to have argued or agreed to something which, according to the European Communities, does not or not completely reflect the EC's position taken during the proceedings. These comments related to the following paragraphs: 8.105, 8.109, 8.111, 8.112, 8.115, 8.131, 8.175, 8.176, 8.187, 8.190, 8.193, 8.204, 8.205, 8.213, 8.220, 8.224, 8.228, 8.232, 8.243 and 8.274. Since these proposed changes concerned the representation of the EC's own legal or factual arguments, we accepted most of them.

VII.8 The second type of comments made by the European Communities related to paragraphs where the phrase "the scientific experts advising the Panel" is used without, according to the European Communities, citing the names of the scientists nor the place where they have made the statements the Panel is invoking. It also argued that frequently the reference provided does not reflect the views of all the scientists. Canada recalled that during the meeting on 17 and 18 February 1997, the scientists had a full opportunity to comment on and qualify each other's opinions and that, therefore, silence may be taken to indicate acceptance or lack of relevant knowledge on the particular issue. The European Communities also requested us to review the accuracy of the factual information contained in several paragraphs. We carefully considered all the factual comments thus made and, where we agreed with them, modified those paragraphs accordingly.

VII.9 The European Communities and Canada also requested us to include in the final report the procedural decisions taken by the Panel during the course of its work. We added these decisions in a new Section B on organizational issues.

VII.10 Canada submitted corrections of its own arguments and factual elements and suggested several drafting changes, most of which have been taken into account in our final report. It argued, for example, that it never limited its claim under Article 5.5 of the SPS Agreement to the substances carbadox and olaquindox. This remark is reflected and dealt with in paragraph 8.174.

VII.11 Both parties also suggested further changes or additions in respect of the interim reports' descriptive sections which we took into account in re-examining that part of the report. In this context, the European Communities requested us to append the transcripts of the joint meeting with the experts advising the Panel to the descriptive part of the report, arguing that many important statements made by the experts in these meetings are not reflected in Section 6 of the interim report. In order to increase the transparency of our work and to take into account most of the comments made by the European Communities on the descriptive part of the interim report, we decided to annex the transcripts of the joint meeting with the experts of 17-18 February 1997 to our final report.

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