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EUROPEAN COMMUNITIES �
(Continued)
VI. INTERIM REVIEW30
6.1 Our interim report was issued to the parties on 28 March 2002, pursuant to
Article 15.2 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU"). On 5 April 2002, the European Communities
requested us to review certain aspects of the interim report. Peru did not have
any comments on the interim report. Neither of the parties requested us to hold
an interim review meeting. When sending the interim report to the parties, we
provided each party an opportunity to transmit in writing its comments on the
other party's interim review comments, if no meeting was requested. In a letter
dated 11 April 2002, Peru requested that we not consider the new evidence
submitted by the European Communities. We carefully reviewed the arguments and
issues presented by the European Communities and each issue is addressed below.
6.2 The European Communities requested a change to the summary of the European
Communities' arguments in paragraph 4.73. We would like to point out that the
European Communities' arguments are fully reflected in paragraphs 4.73 and 4.81.
6.3 The European Communities requested us to either change the heading of
Chapter A of the findings from "Measure at issue" to "Product at issue", or to
delete the two first paragraphs of Chapter A (7.1-7.2). We are of the view that
the repetition, in the beginning of the findings section, of the basic
characteristics of the two fish species at issue in the dispute is useful. As
suggested by the European Communities, we have inserted paragraphs 7.1 and 7.2
under the newly created heading entitled "Products at issue".
6.4 The European Communities made the following comments on paragraphs 7.27 and
7.28 of the findings: "A regulator cannot set by legislative means the
characteristics that are 'intrinsic' to a product. By definition, these are
present in nature, they exist within the product and do not come from the
outside. Consequently, it is an error to qualify as a 'product characteristic'
the fact that preserved sardines must be prepared from fish of the species Sardina. The Codex Alimentarius, by reserving the term 'sardines' only to fish
of the species Sardina, recognizes this fact". We do not agree with the notion
that regulators cannot establish intrinsic product characteristics by
legislative means and do not consider that it is an error to qualify as a
"product characteristic" the fact that preserved sardines must be prepared from
fish of the species Sardina pilchardus. The Appellate Body in EC - Asbestos
unequivocally stated that "'product characteristics' include, not only features
and qualities intrinsic to the product itself, but also related
'characteristics' such as the means of identification, the presentation and the
appearance of a product" (emphasis added).31 As we explained in our findings
(paragraphs 7.26 and 7.27), various provisions of the EC Regulation lay down
product characteristics that deal with features and qualities affecting
composition, size, shape, colour and texture of preserved sardines. One product
characteristic required by Article 2 of the EC Regulation is that preserved
sardines must be prepared exclusively from fish of the species Sardina pilchardus. As we pointed out, this product characteristic must be met for the
product to be "marketed as preserved sardines and under the trade description
referred to in Article 7" of the EC Regulation. We considered that the
requirement to use exclusively Sardina pilchardus is a product characteristic as
it objectively defines features and qualities of preserved sardines for the
purposes of their "market[ing] as preserved sardines and under the trade
description referred to in Article 7" of the EC Regulation. For these reasons,
we have not made any changes to paragraphs 7.26 and 7.27.
6.5 With respect to the section dealing with whether Codex Stan 94 is a relevant
international standard, the European Communities claimed that we did not
consider the fact that Codex Stan 94 had only been accepted by 18 countries, of
which only four accepted it fully, and that neither Peru nor any member States
of the European Communities were among these 18 countries. Therefore, the
European Communities asked us to justify why we disregarded this argument. We
did consider this argument but were not persuaded that this argument was
relevant in determining whether Codex Stan 94 is an international standard. We
note that the European Communities is referring to the Acceptance Procedure set
by the Codex Alimentarius Commission which allows a country to accept a Codex
standard in accordance with its established legal and administrative procedures.
We recall that Annex 1.2 of the Agreement on Technical Barriers to Trade (the "TBT
Agreement") defines a standard as a "document approved by a recognized body" and
does not require that the standard be accepted by countries as part of their
domestic law. Codex Stan 94 was adopted by the Codex Alimentarius Commission and
we consider that this is the relevant factor for purposes of determining the
relevance of an international standard within the meaning of the TBT Agreement.
6.6 With regard to paragraph 7.66 of the findings, the European Communities
asserted that our reasoning did not accurately reflect the "conditional argument
that � there would be less doubts about this [the status of the Codex Alimentarius Commission as an international standardization body] if the
European Communities would be allowed to become a member". We note that all
member States of the European Communities are parties to the Codex Alimentarius
Commission and that the European Communities is an observer at the Commission.
We stated in the findings that Annex 1.4 of the TBT Agreement defines an
"international body" as a "[b]ody or system whose membership is open to the
relevant bodies of at least all Members". According to Rule 1 of the Statutes
and Rules of Procedures of the Codex Alimentarius Commission, "[m]embership of
the joint FAO/WHO Codex Alimentarius Commission � is open to all Member Nations
and Associate Members of the FAO and/or WHO". As membership to the Codex
Alimentarius Commission is open to all WTO Members, we found that it is an
international body within the meaning of Annex 1.4 of the TBT Agreement and the
European Communities did not contest the status of the Codex Alimentarius
Commission as an international standardization body for the purposes of the TBT
Agreement. We have included in the descriptive part the European Communities'
argument that the status of the Codex Alimentarius Commission as an
international standardization body would come into doubt if the European
Communities were not allowed to become a member of the Codex.
6.7 The European Communities commented on paragraphs 7.93 to 7.96 where it felt
that its position on the understanding of the text of paragraph 6.1.1(ii) of
Codex Stan 94 had not been adequately reflected. The European Communities
requested us to justify why the European Communities' arguments about the
editorial change were not persuasive. The European Communities also asserted
that there were differences between the three linguistic versions of Codex Stan
94. Contrary to the European Communities' assertion, we dealt with the European
Communities' arguments set out in paragraphs 4.34 and 4.48 and actually
explained why we were not persuaded that the negotiating history supported the
European Communities' interpretation that Codex Stan 94 allows Members to choose
between "X sardines" on the one hand and the common name of the species in
accordance with the law and custom of the country in which the product is sold
on the other hand. Our reasoning on this issue was in threefold. First, the text
of Codex Stan 94 is clear on its face that it provides Members with four
alternatives. Second, the deletion of the third alternative and the adoption of
the current text indicate that the latter reflects the true intentions of the
drafters. Third, that the change is referred to as "editorial" in the minutes of
the meeting suggests that both the earlier version and the final text expressed
the same view but the final text did so more succinctly. Moreover, we considered
that Codex standards are adopted in a procedurally correct manner and were not
persuaded that Codex Stan 94 was not adopted in a procedurally correct manner.
Concerning the European Communities' argument in respect of the three different
linguistic versions, we stated, in paragraphs 7.108 and 7.109 of the findings,
that there was no difference between the French and the English text, and that
the Spanish version confirmed the view that the name of the species or common
name must be added to the word "sardines" and not replace the word "sardines".
Therefore, we reject the arguments made by the European Communities with respect
to these paragraphs.
6.8 The European Communities reminded us of its requests that the Codex Alimentarius Commission be consulted on the meaning of the text of paragraph
6.1.1(ii). We recall the European Communities' statement at the Second
Substantive Meeting that "[i]f the Panel should have any doubt that the
interpretation of Article 6.1.1(ii) [of] Codex Stan 94 advanced by the European
Communities is correct and considers that it will reach the question of the
meaning of Article 6.1.1(ii) of Codex Stan 94, the European Communities invites
the Panel to ask the Codex Alimentarius to provide its view of the meaning of
this text". This request is reflected in paragraph 4.49 of the descriptive part.
In accordance with Article 13 of the DSU, it is the right of the panel to seek
or refuse to seek information.32 In this regard, in EC - Hormones, the Appellate
Body stated that Article 13 of the DSU "enable[s] panels to seek information and
advice as they deem appropriate in a particular case".33 Also, in
US - Shrimp, the
Appellate Body considered that "a panel also has the authority to accept or
reject any information or advice which it may have sought and received, or to
make some other appropriate disposition thereof. It is particularly within the
province and the authority of a panel to determine the need for information and
advice in a specific case�".34 In this case, we determined that there was no need
to seek information from the Codex Alimentarius Commission.
6.9 The European Communities requested that the adjective "European" in front of
the word "sardines" in the seventh line of paragraph 7.124 be deleted, as well
as the whole sentence that follows. The European Communities argued that "[i]t
is, in fact, factually incorrect to state that 'if a hermetically sealed
container is labelled simply as 'sardines' without any qualification, the
European consumer would know that it contains European sardines". The EC
Regulation, in fact, only requires that preserved sardines be made of Sardina
pilchardus, irrespective of its origin of landing. Accordingly, what a European
consumer knows when buying a hermetically sealed container labelled simply as
'sardines' is that it contains sardines, i.e. Sardina pilchardus; it does not
know the origin of the fish". We recall a statement made by the European
Communities in response to a question posed by Peru at the First Substantive
Meeting: "The European consumers, when offered a can labelled 'sardines' expect
to buy the product they know under this name, the European sardines, even if it
has been caught in non-European waters." We were not persuaded that the European
consumers would consider "sardines" combined with the name of a country or
geographic area to be European sardines for the reasons set out in paragraphs
7.129 to 7.136 of the findings. We therefore decline to delete the word
"European" and the sentence that follows.
6.10 The European Communities objected to the summary, in paragraph 7.127, of
the European Communities' statement that the EC Regulation created "uniform"
consumer expectations. The European Communities claimed that this assertion was
used out of its context. We disagree with this claim and would like to recall
the statement made by the European Communities in its entirety: "In most parts
of the European Communities, especially in the production countries, the term
'sardine' has historically made reference only to the Sardina pilchardus.
[Footnote omitted] However, other species like sprats (Sprattus sprattus) were
sold in tiny quantities on the European Communities market with the denomination
'brisling sardines'. In view of the confusion that this created in the market
place, the European Communities has constantly tried to clarify the situation,
both externally (note of 16/04/73 to Norway [footnote omitted]) and internally
(Regulation 2136/89). This situation has now created uniform consumer
expectations throughout the European Communities, the term 'sardine' referring
only to a preserve made from Sardina pilchardus". This entire quote is set out
in paragraph 7.125. In light of this, we reject the European Communities' claim
that we used its argument "out of its context, that the EC Regulation
artificially created 'uniform consumer expectations'".
6.11 The European Communities further requested the deletion of the adjective
"trade restrictive" in front of the word "measure" in the following sentence
(paragraph 7.127): "If we were to accept that a WTO Member can 'create' consumer
expectations and thereafter find justification for the trade-restrictive measure
which created those consumer expectations in the existence of those 'created'
consumer expectations, we would be endorsing the permissibility of
'self-justifying' regulatory trade barriers". The European Communities argued
that the question of whether the measure at issue was trade-restrictive was an
issue on which we had exercised judicial economy and therefore should "refrain
from gratuitously qualifying the EC measure as 'trade-restrictive'". We used the
expression "trade-restrictive" as part of the legal reasoning to state that if
Members can create consumer expectations and then justify the trade restrictive
measure, we would be endorsing the permissibility of self-justifying regulatory
trade barriers. Therefore, we were justified in using the term
"trade-restrictive". Moreover, in our examination of the EC Regulation, we were
of the view that the EC Regulation was more trade-restrictive than the relevant
international standard, i.e., Codex Stan 94. Our characterization of the EC
Regulation as such is based on the fact that the EC Regulation prohibited the
use of the term "sardines" for species other than Sardina pilchardus whereas
Codex Stan 94 would permit the use of the term "sardines" in a qualified manner
for species other than Sardina pilchardus.35
6.12 The European Communities objected to the use of dictionaries as proof of
consumer expectations and rejected our assertion in paragraph 7.131 that "the
European Communities acknowledged that one of the common names for Sardinops
sagax is 'sardines' or its equivalent thereof in the national language combined
with the country or geographical area of origin". Concerning the first comment,
we are of the view that the use of the dictionaries referred to by both parties
is an appropriate means to examine whether the term "sardines", either by itself
or combined with the name of a country or geographic area, is a common name that
refers to species other than Sardina pilchardus, especially in light of the fact
that the Multilingual Illustrated Dictionary of Aquatic Animals and Plants
was
published in cooperation with the European Commission and member States of the
European Communities for the purposes of, inter alia, improving market
transparency. We note that the electronic publication, Fish Base, was also
produced with the support of the European Commission. In making our finding, not
only did we consider carefully dictionaries referred to by both parties but also
considered other evidence such as the regulations of several member States of
the European Communities, statements made by the Consumers' Association and the
trade description used by Canadian exporters of Clupea harengus harengus to the
Netherlands and the United Kingdom. In our weighing and balancing of the
totality of evidence before us, including the examination of the Oxford
Dictionary referred to by Peru36 and Canada as well as the
Grand Dictionnaire
Encyclop�dique Larousse and Diccionario de la lengua espanola referred to by the
European Communities, we were persuaded, on balance, that the term "sardines",
either by itself or combined with the name of a country or geographic area, is a
common name in the European Communities and that the consumers in the European
Communities do not associate the term "sardines" exclusively with Sardina
pilchardus.37 For the sake of clarity, we inserted a sentence to reflect that Peru
demonstrated that European consumers do not associate "sardines" exclusively
with Sardina pilchardus by pointing out that the term "sardines", either by
itself or combined with the name of a country or geographic area, is a common
name for Sardinops sagax in the European Communities. Concerning the second
comment, we consider that the last sentence of paragraph 7.131 accurately
reflects the statements made by the European Communities in its first written
submission. For the sake of clarity, we have cited in Footnote 100 what the
European Communities stated in paragraph 28 of its first written submission.
6.13 The European Communities made a number of comments with respect to
paragraph 7.132. First, the European Communities stated that "[t]he assessment
of the facts developed by the Panel in this paragraph to establish that sardines
is a generic term in the territory of the European Communities is not
objective". The European Communities makes this assertion based on the probative
value we attached to the letter of the United Kingdom Consumers' Association and
the use of "slid" and "herring" in addition to the use of the term "sardines" to
market the Canadian Clupea harengus harengus. In addition, the European
Communities argued that "the Panel completely ignores the evidence submitted �
on the range and diversity of preserved fish products that the European
consumers can find in any European supermarket and that responds to their
expectations that each fish be called and marketed with its own name". As a
claim that a panel has not made an objective assessment is very serious,38 we will
examine each of the European Communities' arguments.
6.14 With respect to the first argument that questions the probative value or
the relative weight we ascribed to the Consumers' Association's letter, we note
that the Appellate Body in Korea - Dairy stated:
�under Article 11 of the DSU, a panel is charged with the mandate to determine
the facts of the case and to arrive at factual findings. In carrying out this
mandate, a panel has the duty to examine and consider all the evidence before
it, not just the evidence submitted by one or the other party, and to evaluate
the relevance and probative force of each piece thereof � The determination of
the significance and weight properly pertaining to the evidence presented by one
party is a function of a panel's appreciation of the probative value of all the
evidence submitted by both parties considered together.39
6.15 We are also mindful that we are not "required to accord to factual evidence
of the parties the same meaning and weight as do the parties".40 We did consider
the Consumers' Association letter in determining whether the European consumers
associate the term "sardines" exclusively with Sardina pilchardus but, as stated
above, this was not the sole basis on which we made the determination as other
evidence was considered in the overall weighing and balancing process. We
therefore do not agree with the European Communities' argument that our approach
was partial.
6.16 The European Communities submitted additional evidence, i.e., letters it
had received lately from other European consumers' associations on the same
issue. In a letter dated 11 April 2002, Peru requested that the new evidence
submitted by the European Communities not be considered. In this regard, Peru
referred to Article 12 of the Panel's Working Procedures which did not provide
for the submission of new evidence at this stage of the Panel proceedings.
Article 12 of the Panel's Working Procedures reads as follows: "Parties shall
submit all factual evidence to the Panel no later than during the first
substantive meeting, except with respect to evidence necessary for purposes of
rebuttal submissions, answers to questions or comments on answers provided by
others. Exceptions to this procedure will be granted upon a showing of good
cause. In such cases, the other party shall be accorded a period of time for
comment, as appropriate". We are obliged to point out that Peru submitted the
letter from Consumers' Association as a part of its rebuttal submission. In
light of this, it is our view that the European Communities should have
submitted the evidence at the second substantive meeting or at least not later
than at the time it submitted answers to the questions posed by the Panel.
Further, the European Communities did not request an extension of time-period to
rebut the letter from Consumers' Association. Nor did the European Communities
demonstrate the requisite "good cause" which must be shown by the party
submitting the new evidence. We do not consider that the interim review stage is
the appropriate time to introduce new evidence. Therefore, we decline to
consider the new evidence submitted by the European Communities.
6.17 With respect to the letter from an exporter submitted by Canada, on balance
we found the argument that the juvenile product of Clupea harengus harengus was
marketed as sardines in the European Communities credible and therefore
considered it as a part of the overall evidence in determining whether the
European consumers associate the term "sardines" exclusively with Sardina
pilchardus. With respect to the European Communities' argument that "the real
use of the word 'sardines' for Canada's product was for sales to Surinamese in
the Netherlands of a Canadian product they had got to know in Suriname", we do
not see how this detracts from the fact that Canada exported Clupea harengus
harengus as "Canadian sardines" to the Netherlands for thirty years until 1989.
The fact that the majority of consumers of Canadian sardines in the Netherlands
originates from Suriname does not affect the relevance of the evidence.
6.18 Finally, the European Communities claimed that in paragraph 7.132 we
"completely ignor[ed] the evidence submitted by the European Communities on the
range and diversity of preserved fish products that the European consumers could
find in any European supermarket and that responds to their expectations that
each fish be called by and marketed under its own name". Again, we did not
ignore any evidence and we took note of the fact that there is diverse range of
fish products that are available in European supermarkets. However, we were not
persuaded that the existence of diverse preserved fish products in the European
market suggested that the European consumers associate the term "sardines"
exclusively with Sardina pilchardus. We therefore reject the European
Communities' argument that we "completely ignored" the evidence it submitted.
6.19 In light of the above, we reject the European Communities' argument that
our assessment was not objective and decline to change our views set out in
paragraph 7.132. We have, however, for the sake of clarity, revised the last
sentence to state that the term "sardines", either by itself or combined with
the name of a country or geographic area is a common name for Sardinops sagax in
the European Communities. We are obliged to point out, in response to the
European Communities' comment that "[t]he assessment of the facts developed by
the Panel � to establish that sardines is a generic term in the territory of the
European Communities is not objective", that we stated in Footnote 107 of the
findings: "With respect to parties' argument about whether the term 'sardines'
is generic, we do not consider it necessary to make a determination on this
particular issue".
6.20 The European Communities argued that we incorrectly described Article 7 of
the EC Regulation in Footnote 104 of the findings. Concerning the composition of
"sardine mousse", the European Communities argued that the EC Regulation
referred to at least 25% Sardina pilchardus of the net weight of the product and
that these products could not materially be composed of 100% fish. The European
Communities further noted that these products consisted of 40% to 50% of the net
weight of sardine meat, whilst the rest were non-fish ingredients which are
necessary to give the product its particular texture and taste. We have made
changes to Footnote 104 to accurately reflect Article 7 of the EC Regulation in
light of the European Communities' argument.
6.21 Finally, the European Communities contested "the partial and random use
made by the Panel of the evidence submitted by the parties on the negotiating
history of the Codex Stan 94, which is considered unnecessary in certain parts
and is selectively relied upon in others". With regard to paragraph 7.136, the
European Communities further recalled a statement by France in the 1969 Synopsis
of Governments' Replies on the Questionnaire on Canned Sardines: "the use of
country of origin as a prefix is confusing, because several species would have
the same trade name and a single species would be given several names according
to the country where it is caught or processed". We would like to emphasize
again that we considered the totality of the evidence before us. We considered
the text of Codex Stan 94 in determining that the language provided therein took
into account the issue of consumer protection in countries producing preserved
sardines using Sardina pilchardus. We resorted to the negotiating history only
to confirm that Codex Stan 94 takes into account the European Communities'
concern that consumers might be misled if a distinction were not made between
Sardina pilchardus and other species.
6.22 For the sake of clarity, we have inserted a sentence at the end of
paragraph 7.99 and added paragraph 7.139 which summarizes our findings by way of
an overall conclusion, which is reflected in paragraph 8.1, with respect to
Article 2.4 of the TBT Agreement.
30 Pursuant to Article 15.3 of the DSU, "The findings of the
final panel report shall include a discussion of the arguments made at the
interim review stage". The following section entitled "interim review" therefore
forms part of the findings.
31 Appellate Body Report, European Communities - Measures
Affecting Asbestos and Asbestos-Containing Products ("EC - Asbestos"),
WT/DS135/AB/R, adopted 5 April 2001, para. 67.
32 "Panels may seek information from any relevant source
and may consult experts to obtain their opinion on certain aspects of the
matter" (emphasis added).
33 European Communities - Measures Concerning Meat and Meat
Products ("EC - Hormones"), WT/DS26/AB/R and WT/DS48/AB/R, adopted 13
February 1998, DSR 1998:I, para. 147.
34
United States - Import Prohibition of Certain Shrimp and Shrimp Products
("US - Shrimp"), WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII,
para. 104.
35 In addition, we took note of the context provided by Article
2.5 of the TBT Agreement which states that if a technical regulation is in
accordance with relevant international standards, "it shall be rebuttably
presumed not to create an unnecessary obstacle to international trade." Because
the EC Regulation was not in accordance with Codex Stan 94, we considered that
it created an "unnecessary obstacle to trade", which, in our view, can be
construed to mean more trade-restrictive than necessary.
36 Peru's First Oral Statement, para. 4.
37 We noted that Grand Dictionnaire Encyclop�dique Larousse
refers the term "sardine" to Sardina pilchardus. We also took note of
the fact that the same dictionary states "[o]n trouve des esp�ces voisines dans
le Pacifique (Sardinops caerulea), ainsi que sur les c�tes du sud de
l'Afrique (S. sagax) et d'Australie (S. neopilchardus)".
Diccionario de la lengua espanola defines the term "sardina" as "pez
tele�steo marino fis�stomoto, de 12 a 15 cent�metros de largo, parecido al
arenque, pero de carne m�s delicada, cabeza relativamente menor, la aleta
dorsal muy delantera y el cupero m�s delicada y el cuerpo m�s fusiforme y de
color negro ayulado por encima, dorado en la cabeza y peteado en los costados y
vientre." (emphasis added) These two dictionaries referred to by the European
Communities support the view that the term "sardines" is not limited to just
Sardina pilchardus but includes other species, including Sardinops sagax.
38 The Appellate Body in European Communities - Measures
Affecting the Importation of Certain Poultry Products ("EC - Poultry"),
WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V, stated that "[a]n allegation
that a panel has failed to conduct the 'objective assessment of the matter
before it' � is a very serious allegation". Para. 133.
39 Appellate Body Report, Korea - Definitive Safeguard
Measure on Imports of Certain Dairy Products ("Korea - Dairy"),
WT/DS98/AB/R, adopted 12 January 2000, para. 137.
40 Appellate Body Report, Australia - Measures Affecting the
Importation of Salmon ("Australia - Salmon"), WT/DS18/AB/R, adopted 6
November 1998, DSR 1998:VIII, para. 267.
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