Hypothetical: Hormones II

After E has won a ruling of the WTO finding that the hormones ban is, indeed, not based on a specific risk assessment, I has solicited new studies, requested information from E and international organizations and, on the basis of new scientific evidence carried out a "complementary risk assessment". The opinion of its scientific committee concludes that for one hormone, a substantial body of scientific evidence exists that the establishment of ADI levels is not possible. With respect to the other five hormones, the scientific evidence is still inconclusive. I wishes to implement the ruling of the DSB by maintaining the permanent ban of the first hormone. The other five hormones shall be "provisionally" prohibited following Article 5.7 of the SPS Agreement. The proposal does not set a 30 July 1997 on the prohibition of the use of material presenting risks as regards transmissible spongiform encephalopathies, OJ No L 216 of 8. 8. 1997, pp. 95-98.

time limit for the provisional prohibition, but specifies that I "will seek additional information and keep the measures under regular review".

These hypotheticals do not grasp the whole complexity of issues raised by the hormones case. However, they coin some of the core questions, including the issue of minority opinions, the consumer threshold and the interesting question whether a permanent measure which was taken on the basis of Article 5.1 can be implemented by turning it into a provisional measure?

B. ARE THESE MEASURES COVERED BY THE SPS SGREEMENT?

Before moving to the analysis of these measures under the science test, this section briefly double-checks whether they are covered by the SPS Agreement.

1. The Scope of the SPS Agreement

The scope of the SPS Agreement is regulated in Article 1.1, which provides: "This Agreement applies to all sanitary and phytosanitary measures which may, directly or indirectly, affect international trade. Such measures shall be developed and applied in accordance with the provisions of this Agreement."

Annex A.1 of the SPS Agreement defines "Sanitary or phytosanitary measure" as

any measure applied:

(a) to protect animal or plant life or health within the territory of the Member from risks arising from the entry, establishment or spread of pests, diseases, carrying organisms or disease-causing organisms;

(b) to protect human or animal life or health within the territory of the Member from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs;

c) to protect human life or health within the territory of the Member from risks arising from diseases carried by animals, plants or products thereof, or from the entry, establishment or spread of pests;

or

(d) to prevent or limit other damage within the territory of the Member from the entry, establishment or spread of pests.

Sanitary or phytosanitary measures include all relevant laws, decrees, regulations, requirements and procedures including, inter alia, end product criteria; processes and production methods; testing, inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labelling requirements directly related to food safety.

Footnote 4 provides:

For the purpose of these definitions,

"animal" includes fish and wild fauna;

"plant" includes forests and wild flora;

"pests" include weeds; and "contaminants"

include pesticide and veterinary drug residues and extraneous matter.

Whether a measure falls under the scope of the SPS Agreement is determined on the basis of the subjective criterium, whether the measure aims at preventing certain "food-borne" or "pest-or-disease related risks".²²² In European Communities – Hormones, the Appellate Body clarified that all measures that existed when the

222Pauwelyn, Joost, "The WTO Agreement on Sanitary and Phytosanitary (SPS) Measures as Applied in the First Three SPS Disputes - EC – Hormones, Australia – Salmon and Japan – Varietals", 2 JIEL 1999, pp. 641-664, at 644.

SPS Agreement entered into force or were adopted after that date, are subject to its disciplines.²²³

When applying these criteria to the hypotheticals, it is apparent that "red" moth is a pest within the meaning of Annex A.1(a) of the SPS Agreement. The BSE and antibiotics measures aim at the protection from risks arising from "disease-causing organisms in foods, beverages or feedingstuffs" as defined in Annex.A.1(b). The assessment of the biosafety measures is less clear. They are often

"mixed measures", aiming at both, the protection of human health, the environment (or biodiversity) and consumer protection. A similar problem arose with respect to the hormones ban, which was not only taken to protect human health, but also aimed at harmonizing and stabilizing the internal market of the European Communities.

2. WTO Jurisdiction

In European Communities – Hormones, the Panel found that the residues from the six hormones at issue are "contaminants" within the meaning of Annex A.1(b) and held that the "contested EC measures are, "inter alia applied to protect human ... life or health"

which can be "inferred from the Preambles to and legislative history of the Directives at stake.²²⁴ Thus, because a measure was at least partly aimed at the protection of human health, it fell under the scope of the SPS Agreement. The Panel in Australia - Salmon had to tackle the overlap between Annex A.1(a) and (b). Australia argued that its measure would fall under both definitions: The import ban of fresh, chilled and frozen salmon protects Australian salmonids and other aquatic animals from disease directly stemming from such salmon.

However, if consumed as food by humans, salmon wastes could accidentally enter Australian waterways where it might be ingested by

223Appellate Body Report, European Communities – Hormones, paras. 126-130.

224Panel Report, European Communities – Hormones, para. 8.22 (US) and para. 8.25 (CAN) (emphasis added).

wild salmon.²²⁵ Although finding that both definitions of a sanitary measure might be applicable, the Panel argued that the objectives mentioned in several of the Australian legislative acts rather support that the measure was indeed a "quarantine measure", which more generally aims at avoiding the spread of pests or diseases and is not limited to protecting life and health of humans or animals against food-borne risks.²²⁶

3. Analysis

This case law suggests that mixed measures which, at least partly, aim at the prevention of risks defined in one of the paragraphs of Annex A, fall under the SPS Agreement. Applying it to the different biosafety measures suggests that an import ban on Bt maize that allegedly harms domestic beneficial insects would be a SPS measure protecting animal health from a "disease-causing-organism".

The pre-marketing approval requirement for novel food containing GMOs and labelling requirements directly related to food safety, e.g., labels warning of potentially allergenic genes could be covered by Annex A.1(b) of the SPS Agreement, if GMOs were contaminants, toxins or disease causing organisms. According to Charnovitz, protection against (real or imagined) human health risks from bio-engineered processed food, is not covered by the SPS Agreement, because genetic modification is not listed in Annex A.1.²²⁷ This appears to be straightforward in that processed food does not contain organisms any longer. However, as regards unprocessed GMOs, it should be recalled that the SPS Agreement, in Annex A.1 operates on the basis of a subjective criterium. When determining whether a measure is a SPS measure, panels only affirm that the importing country perceives a GMO as disease causing organism.

225Panel Report, Australia – Salmon, para. 8.32.

226Ibid., paras 8. 34 – 8. 37.

227Charnovitz, Steve, "The Supervision of Health and Biosafety Regulation by World Trade Rules", World Trade Forum, 2000 (forthcoming), pp. 121-150, at 126.

However, such a finding does not mean that a GMO is disease causing. It only allows the application of the science test and other criteria under the SPS Agreement to verify this assumption. Thus, pre-marketing approvals of GMOs and novel food, as well as import restrictions would be covered by the SPS Agreement.

II. THE OBLIGATIONS UNDER ARTICLES 2.2 AND 5.1

OF THE SPS AGREEMENT

This part examines the obligations under Articles 2.2 and 5.1 of the SPS Agreement. The Appellate Body has applied both, Articles 2.2 and 5.1 of the SPS Agreement by using a rational relationship test.

This approach has been heavily critizised as "we know it when we see it stance" which does not provide predictable guidance for governments.²²⁸ The goal of the following analysis is to determine the conditions for the taking of precautionary measures under both provisions. After briefly addressing their relationship, it first examines the requirement of "sufficient scientific evidence" under Article 2.2 of the SPS Agreement and then the obligation to base a measure on a risk assessment under Article 5.1 of the SPS Agreement.

A. THE RELATIONSHIP BETWEEN ARTICLES 2.2 AND 5.1

Article 2 of the SPS Agreement, titled "basic rights and obligations", provides in relevant part:

2. Members shall ensure that any sanitary or phytosanitary measure ... is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.

228Thomas, above n. 293, at 506. See also, Hurst, David R., "Hormones:

European Communities – Measures Affecting Meat and Meat Products", EJIL Vol.

9 (1998), at 182.

Article 5 of the SPS Agreement contains the more specific obligation to base a measure on a risk assessment. Article 5.1 provides in full:

1. Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations."

The Appellate Body has acknowledged that Article 2.2 and 5.1 is a "specific application" of the "basic obligation" under Article 2.2, which means that a violation of Article 5.1 automatically implies a violation of Article 2.2.²²⁹ However, not all violations of Article 2.2 are covered by Article 5.1.²³⁰ According to the Appellate Body, it is logically attractive to begin the analysis with Article 2.2.²³¹ Indeed, in Japan – Agricultural Products, the assessment of the measure was based on Article 2.2 of the SPS Agreement. The Appellate Body continuously held that "Articles 2.2 and 5.1 should constantly be read together. Article 2.2 informs Article 5.1: the elements that define the basic obligation set out in Articles 2.2 impart meaning to Article 5.1."²³² When interpreting the "based on" requirement in Article 5.1, the Appellate Body referred to Article 2.2 of the SPS Agreement and held "that the results of the risk assessment must sufficiently warrant -- that is to say, reasonably support ---- the SPS measures at stake", which means "that there be a rational relationship between the measure and the risk assessment."²³³ Precisely this rational relationship test was imported back into Article 2.2, when determining

229Appellate Body Report, European Communities – Hormones, para. 180.

See also, Appellate Body Report, Australia – Salmon, para. 137.

230Ibid.

231Appellate Body Report, European Communities – Hormones, para. 250.

232Ibid., para. 180. See also, Appellate Body Report, Japan – Agricultural Products, para. 75.

233Ibid., para. 193.

whether a measure is maintained without sufficient scientific evidence. The Appellate Body held, Article 2.2 "requires the existence of a sufficient or adequate relationship between two elements, in casu, between the SPS measure and the scientific evidence".²³⁴ It appears that the development of the rational relationship test, to some extent, blurred the legal relationship of the basic obligation under Article 2.2 and the specific obligation under Article 5.1 of the SPS Agreement.

A. ARTICLE 2.2 OF THE SPSAGREEMENT

This section examines the case law regarding the requirement under Article 2.2 of the SPS Agreement whereby SPS measures shall not be "maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5". As noted above, the Appellate Body has interpreted this obligation by using the same rational relationship test as developed for the "based on" requirement of Article 5.1 of the SPS Agreement. To distill the conditions set by the "rational relationship" test, the following sections will consider the full case law bearing on that subject together.