TWN Info Service on WTO and Trade Issues (Dec10/15)
24 December 2010
Third World Network
DSB adopts rulings in New
Zealand apple dispute
Published in SUNS #7064 dated 20
Geneva, 17 Dec (Kanaga Raja) -- The Dispute Settlement
Body (DSB) of the World Trade Organization (WTO) on Friday (17 December)
adopted the report of the Appellate Body and the report of the panel,
as modified by the Appellate Body report, with respect to Australian
measures affecting the importation of apples from New Zealand.
In a ruling issued on 29 November, the Appellate
Body had upheld an earlier panel ruling that found the nearly 90-year-old
Australian ban on the importation of apples from New
Zealand to be inconsistent with Australia's
The Appellate Body had recommended that the DSB
request Australia to bring its measures, found
in the Appellate Body report and in the panel report, as modified by
the Appellate Body report, to be inconsistent with the Agreement on
the Application of Sanitary and Phytosanitary Measures (SPS Agreement),
into conformity with its obligations under that Agreement.
A dispute panel was established on 21 January
2008 to consider a complaint by New Zealand concerning several Australian measures
affecting the importation of apples from New Zealand.
The panel had handed down a ruling on 9 August
this year, and found the Australian measures against the import of apples
from New Zealand
to be inconsistent with Australia's WTO
obligations. New Zealand
had prevailed on most of its complaints in the dispute with Australia.
The panel had requested Australia
to bring the inconsistent measures into conformity with its obligations
under the SPS Agreement. (For full details of the panel ruling, see
SUNS #6986 dated 12 August 2010.)
In its findings and conclusions, the Appellate
Body upheld the panel's finding that the 16 measures at issue, both
as a whole and individually, constitute SPS measures within the meaning
of Annex A(1) to the SPS Agreement.
It further upheld the panel's finding that Australia's
measures regarding fire blight and ALCM (apple leafcurling midge), as
well as the general measures relating to these pests, are inconsistent
with Articles 5.1 and 5.2 of the SPS Agreement, and that, by implication,
these measures are also inconsistent with Article 2.2 of the SPS Agreement.
The Appellate Body found that Australia
has not established that the panel acted inconsistently with its duty
to conduct an objective assessment of the matter before it, within the
meaning of Article 11 of the DSU.
It reversed the panel's finding that Australia's
measures at issue regarding fire blight and ALCM are inconsistent with
Article 5.6 of the SPS Agreement, but said it is unable to complete
the legal analysis of New
Zealand's claim under that provision.
It also reversed the panel's finding that New
Zealand's claim under Annex C(1)(a) and its consequential claim under
Article 8 of the SPS Agreement fall outside the panel's terms of reference.
However, it found that New Zealand has not established that
the 16 measures at issue are inconsistent with Annex C(1)(a) and Article
8 of the SPS Agreement.
The Appellate Body recommended that the DSB request
Australia to bring its measures, found
to be inconsistent with the SPS Agreement, into conformity with its
obligations under that Agreement.
In its statement at the DSB, New
Zealand said that the panel and Appellate Body
findings confirm New Zealand's longstanding view that Australia's quarantine measures applied to New Zealand apples
are neither based on an appropriate risk assessment nor supported by
sufficient scientific evidence.
It added that the findings support New
Zealand's position throughout this
process: that mature and symptomless apples, subject to a standard border
inspection, do not pose a phytosanitary risk.
Noting that following the adoption of the reports,
Australia will be
under an obligation to bring its measures into conformity with its WTO
Zealand said that it will be working
with Australian officials to find an effective, durable and WTO-consistent
solution within a reasonable period of time.
Zealand also welcomed a media release
issued jointly by Australian Ministers immediately following the release
of the Appellate Body report, in which Ministers noted the Australian
Government's acceptance of the outcome of the case. The Ministers also
indicated that Australia would now proceed with a science-based
review of the import risk analysis for New Zealand apples.
In its statement, Australia
noted that on 30 November, the Australian Government announced its intentions
to implement the recommendation and rulings of the DSB in a manner consistent
acknowledged that the Appellate Body reversed the panel's findings on
Article 5.6 of the SPS Agreement, as Australia had
requested it to do. However, Australia
considered that there are aspects of the Appellate Body's reasoning
on Article 5.6 that appear problematic, and in particular in relation
to the standard of review to be applied by panels in dealing with an
Article 5.6 claim.
recalled that in EC-Hormones, the Appellate Body clarified that Article
11 of the DSU "bears directly" on the standard of review to
be applied by panels in the assessment of facts in proceedings under
the SPS Agreement. The Appellate Body stated that: So far as fact-finding
by panels is concerned, their activities are always constrained by the
mandate of Article 11 of the DSU: the applicable standard is neither
de novo review as such, nor "total deference", but rather
the "objective assessment of the facts."
The Appellate Body recalled its statement in relation
to Article 11 of the DSU in subsequent reports, including US/Canada
- Continued Suspension. In doing so, the Appellate Body did not suggest
that its guidance was limited to particular provisions of the SPS Agreement,
such as Article 5.1.
However, said Australia,
in its report Australia-Apples, the Appellate Body has now said: Caution
not to conduct a de novo review is appropriate where a panel reviews
a risk assessment conducted by the importing Member's authorities in
the context of Article 5.1. However, the situation is different in the
context of an Article 5.6 claim. The legal question under Article 5.6
is not whether the authorities of the importing Member have, in conducting
the risk assessment, acted in accordance with the obligations of the
SPS Agreement. Rather, the legal question is whether the importing Member
could have adopted a less trade-restrictive measure. This requires the
panel itself to objectively assess, inter alia, whether the alternative
measure proposed by the complainant would achieve the importing Members's
appropriate level of protection.
According to Australia, in its statement, the
Appellate Body has indicated that, while it is appropriate not to conduct
a de novo review in the context of Article 5.1, the "situation
is different" in relation to an Article 5.6 claim. The Appellate
Body appears to have suggested that a panel can conduct a de novo review
in relation to an Article 5.6 claim. This would constitute a significant
departure from the Appellate Body's long-standing guidance that Article
11 of the DSU precludes such a review.
said that it is concerned that the reasoning of the Appellate Body in
this part of its report will create difficulty for a panel in applying
Articles 5.1 and 5.6 where a complainant brings claims under both provisions.
In such a case, it may be that the importing party
has in its risk assessment considered the alternative measure proposed
by the complainant in its Article 5.6 claim, and found that the alternative
would not meet its appropriate level of protection. Applying the standard
of review relevant to Article 5.1, the panel may find the risk assessment
"objectively justifiable", and find no breach of Article 5.1.
However, said Australia,
following what the Appellate Body has now said, the panel would need
to take a different approach in applying Article 5.6. Rather than determining
whether the importing Member's consideration of whether the alternative
measure met its appropriate level of protection was objectively justifiable,
the panel would need to answer that question based on its own judgement.
In exercising its own judgement, the panel might find the proposed alternative
measure would meet the importing Member's appropriate level of protection,
and thus find a breach of Article 5.6.
In Australia's view,
such an outcome would be incongruous: the finding on Article 5.6 would
completely undermine the finding on Article 5.1, in the process rendering
meaningless the Appellate Body's clear guidance on the interpretation
of that provision.
In sum, Australia said
that it is concerned that the Appellate Body has introduced a significant
element of uncertainty on the standard of review which will make the
task of panels more difficult in reviewing Members' compliance with
key provisions of the SPS Agreement.
In an intervention, the US, noting that it has
closely followed the dispute as a third party, said that it has previously
brought a dispute (DS245) relating to apple import restrictions adopted
by a Member other than Australia. The US added that it also has an application pending
to allow market access for US apples.
It said that the key finding in this dispute is
measures restricting imports of apples are inconsistent with Australia's obligations
under Articles 2.2, 5.1 and 5.2 of the SPS Agreement.
The US also noted that the Appellate Body did not uphold
the panel's findings under Article 5.6 of the SPS Agreement, including
the finding that a limitation of apple imports to mature symptomless
apples would achieve Australia's
appropriate level of protection with regard to fire blight.
With regard to this finding, the US
said that the Appellate Body found that the panel had adopted an improper
approach to its Article 5.6 analysis, and that the panel's findings
were not sufficiently detailed to permit the Appellate Body to complete
the Article 5.6 analysis.
Based on a review of the scientific evidence,
as well as the findings by this panel and by the panel in DS245, it
appears that a measure restricting imports to mature symptomless apples
would in fact meet Australia's appropriate level of protection, said
the US. +
MAIN | ONLINE BOOKSTORE
| HOW TO ORDER