WORLD TRADE  
ORGANIZATION  WT/DS321/R 
31 March 2008 
 (08-0907) 
 Original:   English 
 
 
 
 
  
 
CANADA – CONTINUED SUSPENSION OF  
OBLIGATIONS IN THE EC  – HORMONES DISPUTE 
 
 
Report of the Panel 
 
 
  
 
  WT/DS321/R 
 Page i 
 
 
  TABLE OF CONTENTS 
Page  
I. INTRODUCTION ................................................................................................................... .1 
A. REQUEST FOR CONSULTATIONS  AND REQUEST FOR THE ESTABLISHMENT OF A PANEL .............1  
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL ...................................................................1  
C. PANEL PROCEEDINGS ..................................................................................................................1  
II. FACTUAL ASPECTS ..............................................................................................................2  
A. HISTORY OF THE DISPUTE ...........................................................................................................2  
B. MEASURE AT ISSUE .....................................................................................................................4  
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS.........................4  
IV. ARGUMENTS OF THE PARTIES ........................................................................................4  
A. INTRODUCTION ...........................................................................................................................4  
B. PARTIES ' REQUESTS AND ARGUMENTS ON OPENING THE PANEL MEETING FOR THE 
PUBLIC OBSERVATION .................................................................................................................4  
1. Arguments of the Euro pean Communities .............................................................................5  
(a) Whether panels are permitted to ope n hearings under Article 12 (including 
Appendix 3), Articles 14.1 and 17.10 of the DSU......................................................................5  
(b) Legal implications of open hearings on c overed persons under the Rules of Conduct ..............5  
(c) Systemic and political impact of opening hearings ....................................................................6  
(d) What procedures can be adopted to protect  confidential information in an open 
hearing ........................................................................................................................ ................6  
2. Arguments of Canada............................................................................................................ ...7 
(a) Whether panels are permitted to ope n hearings under Article 12 (including 
Appendix 3), Articles 14.1 and 17.10 of the DSU......................................................................7  
(b) Legal implications of open hearings on c overed persons under the Rules of Conduct ..............7  
(c) Systemic and political impact of opening hearings ....................................................................7  
(d) What procedures can be adopted to protect  confidential information in an open 
hearing ........................................................................................................................ ................8  
C. FIRST WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES .................................................8  
1. Introduction................................................................................................................... ............8  
2. Factual aspects ................................................................................................................ ..........8  
3. Legal arguments:  Part I – Violation of Articles 23, 21.5, 22.8 and 3.7 of the DSU 
and Articles I and II of the GATT 1994..................................................................................8  
(a) The structure of Article 23 of the DSU.......................................................................................8  
(b) Applicability of Article 23 – Article 23.1 of the DSU: Seeking the redress of a WTO 
Violation ...................................................................................................................... ...............9  
(c) Violation of Articles 23.2(a) and 21.5 and of Article 23.1 of the DSU ......................................9  
(d) Canada's continued suspension of concessions and related obligations is in violation 
of Article 23.1, read together with  Articles 22.8 and 3.7 of the DSU.......................................10  WT/DS321/R 
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  (e) Canada is in violation of Article I: 1 of the GATT1994 because of the continued 
suspension of concessions and related obligations ...................................................................15  
(f) Canada is acting inconsistently with Ar ticle II of the GATT 1994 by the continued 
application of countermeasures on products originating in the European 
Communities.................................................................................................................... .........15  
4. Legal arguments:  Part II – Conditional claim in the event that the Panel does 
not find any violation of Article 23 of the DSU as set out in Part I ....................................15  
(a) Canada is violating Article 22.8 of th e DSU because the measure found to be 
inconsistent has been removed by the European Communities................................................15  
(b) Canada is in violation of Articles I and II of the GATT 1994 following the continued 
application of suspension of Concessions.................................................................................16  
D. FIRST WRITTEN SUBMISSION OF CANADA .................................................................................16  
1. Introduction................................................................................................................... ..........16  
2. Background to the dispute .....................................................................................................1 6 
3. Legal arguments................................................................................................................ ......17  
(a) Canada has not acted inconsistently wi th Articles 22.8 and 3.7 of the DSU............................17  
(i) The DSB authorization remains in effect ..................................................................................18  
(ii) The EC bears the burden of de monstrating its compliance ......................................................18  
(iii) The EC measure does not benefit from a presumption of compliance......................................18  
(b) Canada has not acted inconsistently with Ar ticles 23.1, 23.2(a) and 21.5 of the DSU.............19  
(i) Canada is not seeking redress of a perceived WTO violation ..................................................19  
(ii) Canada has not made a unilateral determination ....................................................................19  
(iii) Canada has no obligation to initiate compliance proceedings.................................................20  
(c) The EC has failed to demonstrate its co mpliance with the recommendations and 
rulings of the DSB in EC – Hormones ......................................................................................20  
(d) Arguments and evidence concerning the non-compliance of the EC measure.........................21  
(i) The EC's permanent ban on oestradiol-17 β is not based on a risk assessment........................21  
(e) The SCVPH Opinions do not constitute a risk assessment.......................................................21  
(f) The EC measure is not based on a risk assessment...................................................................22  
(i) The EC's ban on the five other hormon es is not a provisional measure...................................22  
(g) Canada has not acted inconsistently with Articles I and II of the GATT 1994 ........................24  
E. ORAL STATEMENT OF THE EUROPEAN COMMUNI TIES DURING THE FIRST SUBSTANTIVE 
MEETING ............................................................................................................................... .....24  
1. Introduction................................................................................................................... ..........24  
2. Seeking redress – Article 23.1................................................................................................2 4 
3. Article 23.2(a) of the DSU in conjunction with Article 21.5 of the DSU ............................24  
4. Article 23.1 in conjunction with Articles 22.8 and 3.7 of the DSU .....................................25  
5. Concluding statement of the European Communities.........................................................28   WT/DS321/R 
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  F. ORAL STATEMENT OF CANADA DURING THE FIRST SUBSTANTIVE MEETING ............................30  
1. Introduction................................................................................................................... ..........30  
2. Since the EC is not presumed to h ave complied, Canada has not acted 
inconsistently with its obligations under the DSU................................................................31  
(a) The EC's measure does not benefit from a presumption of compliance...................................31  
(b) The EC bears the burden of demonstrating that its has complied.............................................31  
(c) Canada has not acted inconsistently wi th Articles 22.8 and 3.7 of the DSU............................31  
(d) Canada has not acted inconsistently wi th Articles 23.1, 23.2(a) and 21.5................................32  
3. The actual compliance of the EC's measure with the recommendations and 
rulings of the DSB ............................................................................................................. ......32  
(a) The EC has not presented a prima faci e case that its m easure complies ..................................32  
(b) The EC's measure does not comply ..........................................................................................32  
(i) The permanent ban on oestradiol-17 β......................................................................................32  
(ii) The "provisional" ban on th e other five hormones ...................................................................33  
4. Conclusion ..................................................................................................................... ..........34  
5. Concluding statement of Canada ..........................................................................................34  
G. SECOND WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES ...........................................36  
1. Introduction................................................................................................................... ..........36  
2. PART 1:  Violation of Articles 23.1, 23.2(a), 21.5 and 22.8 of the DSU (systemic 
issues) ........................................................................................................................ ...............36  
(a) Canada is in violation of Ar ticle 23.1 and 23.2(a) read together with Article 21.5 of 
the DSU........................................................................................................................ .............36  
(b) Canada's continued suspension of concessions and related obligations is in violation 
of Article 23.1, read together with  Articles 22.8 and 3.7 of the DSU.......................................38  
3. PART 2:  The WTO-consistency of the EC compliance measure ......................................39  
(i) The ban on oestradiol-17 β is in conformity with Article 5.1 ....................................................40  
(ii) The provisional bans on five of the hormonal  substances do not violate Article 5.7................41  
H. SECOND WRITTEN SUBMISSION OF CANADA .............................................................................44  
1. Introduction................................................................................................................... ..........44  
2. The EC's claim under the DSU..............................................................................................44  
(a) Canada has not acted inconsistently  with Article 23.1 of the DSU ..........................................44  
(b) Canada has not acted inconsistently with Article 23.2(a) of the DSU......................................44  
(c) Canada has not acted inconsistently  with Article 22.8 of the DSU ..........................................44  
(i) The EC must confirm its compliance in EC – Hormones..........................................................44  
(ii) Article 22.8 of the DSU is not "self-executing".........................................................................45  
(iii) The DSB authorization need not be formally terminated .........................................................45  
(iv) The EC has several mechanisms to confirm compliance..........................................................45  WT/DS321/R 
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  3. The EC's compliance in EC – Hormones ..............................................................................46  
(a) The relevant international standards and the EC's level of protection......................................46  
(b) "Risk management" under the SPS Agreement .........................................................................46  
(c) The risk assessment and the EC's permanent ban on oestradiol-17 β........................................47  
(i) The SCVPH opinions do not amount to a risk assessment .......................................................47  
(ii) The genotoxicity findings of the risk assessment ......................................................................48  
(iii) The risk assessment is not "sufficiently specific"......................................................................49  
(iv) Adverse effects from misuse and mi splaced hormone implants................................................49  
(d) The provisional ban is inconsiste nt with Article 5.7 of the SPS Agreement .............................49  
(i) Article 5.7 is not a "special regime" .........................................................................................4 9 
(ii) The relevant scientific evidence ............................................................................................... .50 
(iii) Available pertinent information................................................................................................ 51 
(iv) Additional information and review ...........................................................................................51  
4. Conclusion ..................................................................................................................... ..........52  
I. ORAL STATEMENT OF THE EUROPEAN COMMU NITIES ON EXPERTS OPINIONS DURING 
THE SECOND SUBSTANTIVE MEETING ........................................................................................52  
J. ORAL STATEMENT OF CANADA ON EXPERT S OPINIONS DURING THE SECOND 
SUBSTANTIVE MEETING .............................................................................................................57  
1. Introduction................................................................................................................... ..........57  
2. The EC's risk  assessments...................................................................................................... 58 
3. The nature of assessing risk ................................................................................................... 58 
(a) Hazard versus risk............................................................................................................. ........58  
(b) Risk versus thresholds / dose-response assessments.................................................................58  
(c) Integrity of the internati onal risk assessment system................................................................59  
(d) Scientific uncertainty, appreciable risk and zero risk ...............................................................59  
4. Specific scient ific issues ..................................................................................................... .....60  
(a) Evidence of carcinogenicity through genotoxic mode of action of oestradiol-17 β..................60  
(b) Potential adverse hormonal eff ects for sensitive populations...................................................60  
5. Issues related to good veterinary practice ............................................................................61  
6. Conclusion ..................................................................................................................... ..........61  
K. ORAL STATEMENT OF THE EUROPEAN COMMUNITIES ON LEGAL ISSUES DURING THE 
SECOND SUBSTANTIVE MEETING ...............................................................................................61  
1. Introduction................................................................................................................... ..........61  
2. Article 5.1 of the SPS Agreement ...........................................................................................62  
3. Article 3.3 of the SPS Agreement ...........................................................................................63  
4. Article 5.7 of the SPS Agreement ...........................................................................................64  
5. Article 5.5 of the SPS Agreement ...........................................................................................64   WT/DS321/R 
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  6. Conclusion on the SPS Agreement .........................................................................................64  
7. Concluding  statement of the European Communities........................................................64  
(a) Introduction................................................................................................................... ............64  
(b) The scientific debate .......................................................................................................... .......66  
(c) The context of the scientific debate ..........................................................................................6 7 
(d) Conclusion ..................................................................................................................... ...........69  
L. ORAL STATEMENT OF CANADA ON LEGAL ISSUES DURING THE SECOND SUBSTANTIVE 
MEETING ............................................................................................................................... .....70  
1. Introduction................................................................................................................... ..........70  
2. The EC has not demonstrated that th e relevant international standards are 
insufficient to meet its appropriate level of protection........................................................71  
3. The EC has not demonstrated that its permanent ban on oestradiol-17 β is based 
on a risk assessment appropri ate to the ci rcumstances.......................................................71  
(a) The EC has not demonstrated that existi ng international risk assessment techniques 
are inappropriate to the circumstances......................................................................................71  
(b) The EC has not demonstrated that the risk assessment on which its measure is based is appropriate to the circumstances ...........................................................................................7 2
 
(c) There is no evidence that oestradiol-17 β is genotoxic in vivo ..................................................72  
(d) There is no evidence of adverse ef fects on the endocrine system.............................................73  
4. The EC has not, and cannot, demonstrat e that there is insufficient evidence to 
conduct a risk assessment on the five other hormones ........................................................73  
5. The EC has not demonstrated that the fa ilure to follow good veterinary practice 
results in increased risk  of adverse effects............................................................................74  
6. Conclusion ..................................................................................................................... ..........74  
7. Concluding statement of Canada ..........................................................................................74  
V. ARGUMENTS OF THE THIRD PARTIES ........................................................................75  
A. AUSTRALIA ............................................................................................................................... 75 
1. Introduction................................................................................................................... ..........75  
2. Opening Panel meetings for observation by the public .......................................................75  
3. Whether the DSB authorizat ion remains in effect...............................................................75  
4. Article 21.5 of the DSU ........................................................................................................ ...75 
B. BRAZIL ............................................................................................................................... .......77  
1. Introduction................................................................................................................... ..........77  
2. Opening Panel meetings for observation by the public .......................................................77  
3. Whether the DSB authorizat ion remains in effect...............................................................78  
4. Article 21.5 of the DSU ........................................................................................................ ...78 
5. Burden of proof................................................................................................................ .......79  
C. CHINA ............................................................................................................................... .........79  WT/DS321/R 
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  1. Introduction................................................................................................................... ..........79  
2. Opening Panel meetings for observation by the public .......................................................79  
3. The current status of the DSB authorized suspension of concessions................................80  
4. Article 21.5 of the DSU and burden of proof........................................................................81  
5. Article 23.2 of the DSU ........................................................................................................ ...83 
D. INDIA ............................................................................................................................... ..........84  
1. Introduction................................................................................................................... ..........84  
2. Opening Panel meetings for observation by the public .......................................................84  
E. MEXICO ............................................................................................................................... ......85  
1. Introduction................................................................................................................... ..........85  
2. Opening Panel meetings for observation by the public .......................................................85  
3. Whether the DSB authorizat ion remains in effect...............................................................86  
4. Article 21.5 of the DSU ........................................................................................................ ...86 
F. NEW ZEALAND ..........................................................................................................................86  
1. Introduction................................................................................................................... ..........86  
2. Opening Panel meetings for observation by the public .......................................................87  
3. Whether the DSB authorizat ion remains in effect...............................................................87  
4. Articles 21.5, 22.8 and 23 of the DSU ....................................................................................88  
5. Burden of proof................................................................................................................ .......89  
6. Article 5.7 of the SPS Agreement ...........................................................................................89  
7. Article 5.1 of the SPS Agreement ...........................................................................................91  
G. NORWAY ............................................................................................................................... ....93  
1. Opening Panel meetings for observation by the public .......................................................93  
2. Whether the DSB authorizat ion remains in effect...............................................................93  
3. Article 21.5 of the DSU ........................................................................................................ ...94 
H. SEPARATE CUSTOMS TERRITORY OF TAIWAN , PENGHU , KINMEN AND MATSU .........................96  
1. Introduction................................................................................................................... ..........96  
2. Opening Panel meetings for observation by the public .......................................................96  
3. Whether the DSB authorizat ion remains in effect...............................................................97  
4. Article 21.5 of the DSU ........................................................................................................ ...97 
5. The relationship between Article 22.8 and Article 23 of the DSU ......................................98  
I. UNITED STATES .......................................................................................................................100  
1. Introduction................................................................................................................... ........100  
2. Opening Panel meetings for observation by the public .....................................................100  
VI. INTERIM REVIEW.............................................................................................................100  
A. INTRODUCTION .......................................................................................................................100   WT/DS321/R 
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  B. PARTIES ' COMMENTS ON THE DESCRIPTIVE PART ...................................................................101  
C. PARTIES ' COMMENTS REGARDING THE FINDINGS OF THE PANEL ............................................102  
1. Preliminar y remarks ............................................................................................................ 102 
2. Parties' requests for review related to aspects of the report on procedural issues .........103  
(a) Comments by the European Communities..............................................................................103  
(b) Comments by Canada ............................................................................................................. 106 
3. Comments of the parties regarding the Panel's findings of violation of 
Article 23.2(a) read together with Articles 21.5 and 23.1 of the DSU and on the EC claims on Article 23.1, read together with Articles 22.8 and 3.7 of the DSU ............108
 
(a) Comments by the European Communities..............................................................................108  
(b) Comments by Canada ............................................................................................................. 109 
4. Comments of the parties on the complia nce of the EC ban on meat and meat 
products treated with the six hormones at issue for growth promotion purposes 
with the SPS Agreement  in relation to the Panel's findings on the EC claims on 
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU ....................................111  
(a) Comments by the European Communities..............................................................................111  
(i) Introductory comments .......................................................................................................... .111 
(ii) General comments on the Panel's analysis regarding oestradiol-17 β...................................117  
(iii) Comments on "risk assessment techniques"............................................................................117  
(iv) Assessment of the scientific arguments ...................................................................................119  
(v) Comments on the Panel analysis regarding the other five hormonal substances...................126  
(b) Comments by Canada ............................................................................................................. 135 
VII. FINDINGS....................................................................................................................... ......136  
A. PROCEDURAL ISSUES ...............................................................................................................136  
1. Opening of the Panel meetings with the parties and experts for public 
observation .................................................................................................................... ........136  
(a) Introduction................................................................................................................... ..........136  
(b) Summary of the main argum ents of the parties ......................................................................136  
(c) Summary of the arguments of the third parties.......................................................................138  
(d) Decision of the Panel .......................................................................................................... ....141  
2. Panel's decisions relating to the consulta tion of individual scientific experts and 
international organizations ..................................................................................................14 5 
(a) Decision to consult scientific experts .....................................................................................145  
(b) EC request for a single expert review group...........................................................................146  
(c) Experts select ion process ...................................................................................................... ..148  
3. Other procedur al issues........................................................................................................ 154 
(a) Request by the European Communities that relevant scientific evidence and data be 
provided by Canada ............................................................................................................. ...154  WT/DS321/R 
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  (b) Request by Canada to exclude materials not cited in the EC risk assessment as well as 
those published after the adoption of Directive 2003/74/EC..................................................156  
(c) A new version of Exhibit EC-107, su bmitted by the European Communities on 
29 May 2006 .................................................................................................................... .......158  
(d) Procedure for allowing the parties to comme nt on each other's replies to questions 
after the second Panel meeting ...............................................................................................15 8 
(e) Request by the European Communities to be allowed to correct factual errors 
allegedly contained in the other party's co mments on its replies to questions following 
the second Pane l meeting....................................................................................................... .158 
(f) Request by the European Communities for ta pe recordings of the transcript of the 
Panel meeting with scientific experts .....................................................................................159  
4. Scope of the Panel's mandate...............................................................................................162  
(a) The measure at issue and the claims of the European Communities ......................................162  
(b) Are the indications provided by the European Communities on how it wants its claims to be addressed part of the mandate of the Panel?.......................................................163
 
(c) Meaning of "read together with" and "in conjunction with" in the EC submissions ..............165  
(d) Conclusion ..................................................................................................................... .........166  
5. Approach of the Panel on the basis of its mandate ............................................................166  
B. FIRST SERIES OF EC CLAIMS : VIOLATION OF ARTICLE  23.2( A) READ TOGETHER WITH 
ARTICLES  21.5  AND 23.1.........................................................................................................167  
1. Summary of the main argu ments of the parties.................................................................167  
2. Reasoning of the Panel......................................................................................................... .171 
(a) Introduction................................................................................................................... ..........171  
(b) "[S]eeking the redress of a violation of obligations or other nullification or 
impairment of benefits under  the covered agreements" (Article 23.1 of the DSU)................172  
(c) Violation of Article 23.2(a)................................................................................................... ..174  
(i) Introduction ................................................................................................................... .........174  
(ii) Did Canada make a determination that the EC implementing measure violates the 
WTO Agreement?................................................................................................................. ...175  
(iii) Did Canada fail to make such determinati on through recourse to dispute settlement 
in accordance with the rules and procedures of the DSU? ....................................................179  
(iv) Did Canada fail to make any such determination consistent with the findings 
contained in the panel or Appellate Body report adopted by the DSB or an arbitration 
award rendered under the DSU..............................................................................................179  
(v) Conclusion ..................................................................................................................... .........180  
(d) Violation of Article 21.5 of the DSU......................................................................................180  
(e) Violation of Article 23.1 of the DSU......................................................................................180  
3. Conclusion ..................................................................................................................... ........180  
C. SECOND SERIES OF EC CLAIMS : VIOLATION OF ARTICLE  23.1,  READ TOGETHER WITH 
ARTICLES  22.8  AND 3.7 OF THE DSU......................................................................................181   WT/DS321/R 
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  1. Summary of the main argu ments of the parties.................................................................181  
2. Approach of the Panel .......................................................................................................... 187 
(a) Duty of the Panel to make an objectiv e assessment of the matter before it............................187  
(b) Order of review of the second series of main claims by the European Communities ............188  
3. Violation of Article 22.8 of the DSU ....................................................................................189  
(a) Preliminary remarks............................................................................................................ ....189  
(b) Jurisdiction of the Panel...................................................................................................... ....190  
(i) Introduction ................................................................................................................... .........190  
(ii) Does the Panel need to determine wheth er the EC implementing measure actually 
complies with the SPS Agreement in order to address the EC claim of violation of 
Article 23.1 read together with Article 22.8 and Article 3.7 of the DSU?..............................191  
Introductory remarks ........................................................................................................... .................. 191  
Applicability of the principl e of good faith in the WT O and under th e DSU........................................ 191  
Introduc tion ................................................................................................................... ................ 191  
General intern ational law...................................................................................................... ......... 192  
The text of  the DSU............................................................................................................ ........... 193  
The panel and Appella te Body pr actice ......................................................................................... 1 94 
Presumption and burd en of proof.............................................................................................. 19 4 
Presumption of  good faith ...................................................................................................... ... 195  
Is the presumption of good faith compliance rebuttable only in a specific forum?................... 197  
Conclusion..................................................................................................................... ........................ 199  
(iii) Does the Panel have jurisdiction to address the compliance of the EC implementing 
measure with the SPS Agreement? .........................................................................................200  
(c) Burden of proof................................................................................................................ .......204  
(d) Compatibility of the EC implementing measure with the provisions of the 
SPS Agreement ........................................................................................................................206  
(i) The EC implementing measure ...............................................................................................206  
(ii) Scope of the Panel review...................................................................................................... .209 
(iii) Standard applicable to the review of the compatibility of the EC implementing 
measure with the SPS Agreement ...........................................................................................211  
(iv) Whether the EC implementing me asure is an SPS measure ...................................................214  
(e) Compatibility of the EC implementing measure with Article 5.1 of the 
SPS Agreement  with respect to oestradiol-17 β.......................................................................216  
(i) Introduction ................................................................................................................... .........216  
(ii) Is there a risk assessment within the meaning  of Article 5.1 of the SPS Agreement?.............217  
Do the Opinions take into acco unt risk assessment techniques of the relevant international 
organizations?................................................................................................................. ....................... 218  
Introduc tion ................................................................................................................... ................ 218  
Summary of the main argumen ts of the parties ............................................................................. 220  WT/DS321/R 
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  Reasoning of the Panel ......................................................................................................... ......... 222  
Do the Opinions satisfy the definition in Annex A(4) of the SPS Agreement ? ..................................... 224  
Introduc tion ................................................................................................................... ................ 224  
Summary of the main argumen ts of the parties ............................................................................. 224  
Reasoning of the Panel ......................................................................................................... ......... 227  
Does the science support the conc lusions of the Opinions? .................................................................. 234  
Introduc tion ................................................................................................................... ................ 234  
Summary of the main argumen ts of the parties ............................................................................. 234  
Reasoning of the Panel ......................................................................................................... ......... 236  
Conclusion..................................................................................................................... ........................ 240  
(iii) Is the measure "based on" a risk assessment..........................................................................240  
Introduc tion ................................................................................................................... ........................ 240  
Summary of the main argum ents of the parties................................................................................... .. 240 
Reasoning of the Panel......................................................................................................... ................. 241  
(iv) Conclusion ..................................................................................................................... .........241  
(f) Compatibility of the EC implementing measure with Article 5.7 of the 
SPS Agreement ........................................................................................................................241  
(i) Introduction ................................................................................................................... .........241  
(ii) Summary of the main argume nts of the parties.......................................................................241  
(iii) Approach of the Panel .......................................................................................................... ..243  
(iv) When will "relevant scientific evidence" be deemed "insufficient"?.......................................246  
Effect of the level of protection on the considera tion of the insufficiency of relevant scientific 
evidence under Article 5.7..................................................................................................... ................ 246  
Can relevant scientific evidence become  "insuffici ent"?....................................................................... 249  
Relationship between insufficiency of the evid ence and the existence of an international 
standard ....................................................................................................................... .......................... 255  
Conclusion..................................................................................................................... ........................ 258  
(v) Alleged insufficiencies which s hould be addressed by the Panel ...........................................258  
(vi) Issues common to all five hormones for which evidence was not provided on a 
hormone-specific basis......................................................................................................... ...260  
Introduc tion ................................................................................................................... ........................ 260  
Effects of hormones on certain  categories of population ...................................................................... 26 1 
Dose response.................................................................................................................. ...................... 264  
Bioavaila bility ................................................................................................................ ....................... 265  
Long latency period of cancer  and confoundin g factors ....................................................................... 266  
Effect of hormones on  the immune system ........................................................................................ ... 270  
Effect of hormones on gr owth and reproduction.................................................................................. .2 7 2 
(vii) Is relevant scientific evidence insufficient in the case of progesterone ..................................275  
Summary of the main argum ents of the parties................................................................................... .. 275  WT/DS321/R 
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  Reasoning of the Panel......................................................................................................... ................. 276  
Conclusion..................................................................................................................... ........................ 278  
(viii) Is relevant scientific evidence insufficient in the case of testosterone? ..................................279  
Summary of the main argum ents of the parties................................................................................... .. 279 
Reasoning of the Panel......................................................................................................... ................. 280  
Conclusion..................................................................................................................... ........................ 281  
(ix) Is relevant scientific evidence insufficient in the case of trenbolone acetate?........................282  
Summary of the main argum ents of the parties................................................................................... .. 282 
Reasoning of the Panel......................................................................................................... ................. 283  
Metabolism of tr enbolone acetate............................................................................................... ... 283  
Inadequate evidence of carc inogenicity in  humans ....................................................................... 284  
Conclusion..................................................................................................................... ........................ 286  
(x) Is relevant scientific evidence insufficient in the case of zeranol ...........................................287  
Summary of the main argum ents of the parties................................................................................... .. 287 
Reasoning of the Panel......................................................................................................... ................. 289  
Conclusion..................................................................................................................... ........................ 292  
(xi) Is relevant scientific evidence insufficient in the case of melengestrol acetate (MGA)?........292  
Summary of the main argum ents of the parties................................................................................... .. 292 
Reasoning of the Panel......................................................................................................... ................. 294  
Data on residues of melengestro l acetat e....................................................................................... 295 
Inadequate evidence for carcinogenicity in humans, such as no information available on 
mutagenicity and genotoxicity and no information available on DNA adducts and DNA 
damage......................................................................................................................... .................. 296  
Conclusion..................................................................................................................... ........................ 298  
(xii) Conclusion ..................................................................................................................... .........298  
(g) Compatibility of the EC implementing measure with Article 3.3 of the 
SPS Agreement  with respect to all hormones w ith the exception of melengestrol 
acetate ........................................................................................................................ .............300  
Summary of the main argum ents of the parties................................................................................... .. 300 
Reasoning of the Panel......................................................................................................... ................. 301  
(h) Conclusion on Article 22.8 of the DSU ..................................................................................301  
4. Violation of Articles 23.1 and 3.7 of the DSU .....................................................................301  
D. VIOLATION OF ARTICLE   I:1 AND ARTICLE  II OF THE GATT  1994.........................................302  
E. CONDITIONAL CLAIM OF VIOLATION OF ARTICLE  22.8  OF THE DSU  MADE IN THE 
ALTERNATIVE ..........................................................................................................................302  
F. CONCLUSION ...........................................................................................................................302  
VIII.  RECOMMENDATIONS......................................................................................................303  WT/DS321/R 
Page xii 
 
 
  LIST OF ANNEXES 
 
ANNEX A 
 
CORRESPONDENCE FROM THE PANEL TO THE PARTIES 
AND WORKING PROCEDURES 
 
 
Contents Page 
Annex A-1 Letter to the Parties dated 1 August 2005 on the Panel Decision on 
Open Hearings for Public Observation A-2 
Annex A-2 Working Procedures for the Panel A-3 
Annex A-3 Letter to the Parties date d 20 October 2005 on the Panel Decision 
on Consulting Scientific and Technical Experts A-6 
Annex A-4 Letter to the Parties dated 25 November 2005 on the Panel 
Decision on Certain Issues concerning the Experts' Working 
Procedures A-8 
Annex A-5 Working Procedures for Cons ultations with Scientific and/or 
Technical Experts A-10 
 
  
ANNEX B 
 
REPLIES OF THE PARTIES TO QU ESTIONS POSED BY THE PANEL 
AND OTHER PARTIES AFTER THE FIRST SUBSTANTIVE MEETING 
  
Contents Page 
Annex B-1 Replies of the European Communities to questions posed by the 
Panel after the first substan tive meeting (3 October 2005) B-2 
Annex B-2 Replies of Canada to questi ons posed by the Panel after the first 
substantive meeting (3 October 2005) B-73 
Annex B-3 Replies of Canada to questions posed by the European 
Communities after the first substa ntive meeting (3 October 2005) B-89 
 
  WT/DS321/R 
 Page xiii 
 
 
  ANNEX C 
 
REPLIES OF THE PARTIES TO QU ESTIONS POSED BY THE PANEL 
AND OTHER PARTIES AFTER THE SECOND SUBSTANTIVE MEETING 
AND COMMENTS BY THE PARTIES ON THE OTHER PARTIES' REPLIES 
  
Contents Page 
Annex C-1 Replies of the European Communities to questions posed by the 
Panel after the second substantive meeting (18 October 2006) C-2 
Annex C-2 Comments by the European Communities on the replies of the 
United States and Canada to questions posed by the Panel and 
other parties after the second substantive meeting 
(31 October 2006) C-24 
Annex C-3 Replies of Canada to questi ons posed by the Panel after the second 
substantive meeting (18 October 2006) C-40 
Annex C-4 Replies of Canada to questions posed by the European 
Communities after the second substantive meeting 
(18 October 2006) C-47 
Annex C-5 Comments by Canada on the replies of the European Communities 
to questions posed by the Panel after the second substantive 
meeting (31 October 2006) C-53 
 
 
ANNEX D 
 
REPLIES OF THE SCIENTIFIC EXPERTS 
TO QUESTIONS POSED BY THE PANEL 
 
  
ANNEX E 
 
REPLIES OF THE CODEX ALIMENTARIUS COMMISSION,  
THE JOINT FAO/WHO JECFA SECRETARIAT AND  
THE INTERNATIONAL AGENCY FOR RESEARCH ON CANCER 
TO CERTAIN QUESTIONS POSED BY THE PANEL 
TO INTERNATIONAL ORGANIZATIONS 
 
 
Contents Page 
Annex E-1 Replies of the Codex Alimentarius Commission to certain 
questions posed by the Panel to  international organizations E-2 
Annex E-2 Replies of the Joint FAO/ WHO JECFA Secretariat to certain 
questions posed by the Panel to  international organizations E-104 
Annex E-3 Replies of the Internationa l Agency for Research on Cancer to 
certain questions posed by the Pane l to international organizations E-127 
 
 WT/DS321/R 
Page xiv 
 
 
  ANNEX F 
 
COMMENTS BY THE PARTIES ON THE REPLIES 
OF THE SCIENTIFIC EXPERTS, CODEX, JECFA AND IARC 
TO QUESTIONS POSED BY THE PANEL AND  
COMMENTS BY THE PARTIES ON THE OTHER PARTIES' COMMENTS 
 
 
Contents Page 
Annex F-1 Comments by the European Communities on the replies of the 
scientific experts to questions posed by the Panel (30 June 2006) F-2 
Annex F-2 Comments by the European Communities on the replies of Codex, 
JECFA and IARC to questions posed by the Panel (30 June 2006) F-41 
Annex F-3 Comments by the European Communities to the comments by the 
United States and Canada on the replies of the scientific experts to 
questions posed by the Panel (12 July 2006) F-54 
Annex F-4 Comments by Canada on the replies of the scientific experts, 
Codex, JECFA and IARC to questions posed by the Panel 
(30 June 2006)  F-101 
Annex F-5 Comments by Canada to the comments by the European 
Communities on the replies of the scientific experts, Codex, 
JECFA and IARC to questions posed by the Panel (12 July 2006) F-152 
 
 
 
ANNEX G 
 
TRANSCRIPT OF THE PANEL'S JOINT MEETING  
WITH SCIENTIFIC EXPERT S ON 27-28 SEPTEMBER 2006 
  WT/DS321/R 
 Page xv 
 
 
  TABLE OF WTO CASES CITED IN THIS REPORT  
 
Short Title Full Case Title and Citation 
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
Argentina – Footwear (EC)  Panel Report, Argentina – Safeguard Measur es on Imports of Footwear , 
WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body 
Report, WT/DS121/AB/R, DSR 2000:II, 575 
Australia – Salmon  Appellate Body Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 
Australia – Salmon  Panel Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/R and Corr.1, adopted 6 November 1998, as modified by Appellate Body Report, WT/DS18/AB/R, DSR 1998:VIII, 3407 
Australia – Salmon  (Article 21.5 – Canada)
  Panel Report, Australia – Measures Affecting Importation of Salmon – 
Recourse to Article 21.5 of the DSU by Canada , WT/DS18/RW, adopted 
20 March 2000, DSR 2000:IV, 2031 
Canada – Aircraft  
(Article 21.5 – Brazil)  Appellate Body Report, Canada – Measures Affecting the Export of Civilian 
Aircraft – Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/AB/RW, 
adopted 4 August 2000, DSR 2000:IX, 4299 
Canada – Aircraft  (Article 21.5 – Brazil)
  Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft  
– Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/RW, adopted 
4 August 2000, as modified by Appellate Body Report, WT/DS70/AB/RW, 
DSR 2000:IX, 4315 
Canada – Aircraft Credits and 
Guarantees  Panel Report, Canada – Export Credits and Loan Guarantees for Regional 
Aircraft , WT/DS222/R and Corr.1, adopted 19 February 2002, DSR 2002:III, 
849 
Canada – Dairy  
(Article 21.5 – New Zealand 
and US II)  Appellate Body Report, Canada – Measures Affecting the Importation of Milk 
and the Exportation of Dairy Products – Second Recourse to Article 21.5 of the 
DSU by New Zealand and the United States , WT/DS103/AB/RW2, 
WT/DS113/AB/RW2, adopted 17 January 2003, DSR 2003:I, 213 
Canada – Dairy  (Article 21.5 – New Zealand 
and US II)
  Panel Report, Canada – Measures Affecting the Importation of Milk and the 
Exportation of Dairy Products – Second Recourse to Article 21.5 of the DSU by 
New Zealand and the United States , WT/DS103/RW2, WT/DS113/RW2, 
adopted 17 January 2003, as modified by Appellate Body Report, 
WT/DS103/AB/RW2, WT/DS113/AB/RW2, DSR 2003:I, 255 
Canada – Periodicals  Appellate Body Report, Canada – Certain Measures Concerning Periodicals , 
WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, 449 
Canada – Periodicals  Panel Report, Canada – Certain Measures Concerning Periodicals , 
WT/DS31/R and Corr.1, adopted 30 July 1997, as modified by Appellate Body 
Report, WT/DS31/AB/R, DSR 1997:I, 481 
Canada – Wheat Exports and Grain Imports Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R, adopted 27 September 2004, 
DSR 2004:VI, 2739 
Canada – Wheat Exports and 
Grain Imports Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment 
of Imported Grain , WT/DS276/R, adopted 27 September 2004, upheld by 
Appellate Body Report, WT/DS276/AB/R, DSR 2004:VI, 2817 
Chile – Alcoholic Beverages  Appellate Body Report, Chile – Taxes on Alcoholic Beverages , 
WT/DS87/AB/R, WT/DS110/AB/R, adopted 12 January 2000, DSR 2000:I, 
281 WT/DS321/R 
Page xvi 
 
 
  Short Title Full Case Title and Citation 
Chile – Alcoholic Beverages  Panel Report, Chile – Taxes on Alcoholic Beverages , WT/DS87/R, 
WT/DS110/R, adopted 12 January 2000, as modified by Appellate Body 
Report, WT/DS87/AB/R, WT/DS110/AB/R, DSR 2000:I, 303 
EC – Approval and Marketing 
of Biotech Products Panel Report, European Communities – Measures  Affecting the Approval and 
Marketing of Biotech Products , WT/DS291/R, WT/DS292/R, WT/DS293/R, 
Corr.1 and Add.1, 2, 3, 4, 5, 6, 7, 8 and 9, adopted 21 November 2006 
EC – Asbestos  Appellate Body Report, European Communities – Measures Affecting Asbestos 
and Asbestos-Containing Products , WT/DS135/AB/R, adopted 5 April 2001, 
DSR 2001:VII, 3243 
EC – Asbestos  Panel Report, European Communities – Measur es Affecting Asbestos and 
Asbestos-Containing Products , WT/DS135/R and Add.1, adopted 5 April 2001, 
as modified by Appellate Body Report, WT/DS135/AB/R, DSR 2001:VIII, 
3305 
EC – Bananas III  Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 
1997, DSR 1997:II, 591 
EC – Bananas III  (Article 21.5 – EC)  Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS27/RW/EEC and Corr.1, 12 April 1999, unadopted, 
DSR 1999:II, 783 
EC – Bananas III (US)  (Article 22.6 – EC)
  Decision by the Arbitrators, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European Communities under Article 22.6 of the DSU , WT/DS27/ARB, 9 April 
1999, DSR 1999:II, 725 
EC – Bed Linen  
(Article 21.5 – India)  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton-Type Bed Linen from I ndia – Recourse to Article 21.5 of the 
DSU  by India , WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965  
EC – Bed Linen  
(Article 21.5 – India)  Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton-Type Bed Linen from India – Recourse to Article 21.5 of the DSU  by 
India , WT/DS141/RW, adopted 24 April 2003, as modified by Appellate Body 
Report, WT/DS141/AB/RW, DSR 2003:IV, 1269  
EC – Commercial Vessels Panel Report, European Communities – Measures Affecting Trade in 
Commercial Vessels , WT/DS301/R, adopted 20 June 2005 
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Hormones (Canada)  Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), 
Complaint by Canada , WT/DS48/R/CAN, adopted 13 February 1998, as 
modified by Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R, 
DSR 1998:II, 235 
EC – Hormones (US)  Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), 
Complaint by the United States , WT/DS26/R/USA, adopted 13 February 1998, 
as modified by Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R, 
DSR 1998:III, 699 
EC – Hormones  Award of the Arbitrator, EC Measures Concerning Meat and Meat Products 
(Hormones) – Arbitration under Article 21.3(c) of the DSU , WT/DS26/15, 
WT/DS48/13, 29 May 1998, DSR 1998:V, 1833  WT/DS321/R 
 Page xvii 
 
 
  Short Title Full Case Title and Citation 
EC – Hormones (Canada) 
(Article 22.6 – EC)  Decision by the Arbitrators, European Communities – Measures Concerning 
Meat and Meat Products (Hormones), Original Complaint by Canada – 
Recourse to Arbitration by the Eur opean Communities under Article 22.6 of the 
DSU , WT/DS48/ARB, 12 July 1999, DSR 1999:III, 1135 
EC – Hormones (US)  
(Article 22.6 – EC)  Decision by the Arbitrators, European Communities – Measures Concerning 
Meat and Meat Products (Hormones), Original Complaint by the United States
 – Recourse to Arbitration by the Eu ropean Communities under Article 22.6 of 
the DSU , WT/DS26/ARB, 12 July 1999, DSR 1999:III, 1105 
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on 
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R, 
adopted 18 August 2003, DSR 2003:VI, 2613 
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/R, adopted 18 August 
2003, as modified by Appellate Body Report, WT/DS219/AB/R, 
DSR 2003:VII, 2701 
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
India – Patents (US)  Panel Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products, Complaint by the United States , WT/DS50/R, adopted 
16 January 1998, as modified by Appellate Body Report, WT/DS50/AB/R, 
DSR 1998:I, 41 
Japan – Agricultural Products II  Appellate Body Report, Japan – Measures Affecting Agricultural Products , 
WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277 
Japan – Agricultural 
Products II  Panel Report, Japan – Measures Affecting Agricultural Products , WT/DS76/R, 
adopted 19 March 1999, as modified by Appellate Body Report, 
WT/DS76/AB/R, DSR 1999:I, 315 
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97  
Japan – Apples  Appellate Body Report, Japan – Measures Affecting the Importation of Apples , 
WT/DS245/AB/R, adopted 10 December 2003, DSR 2003:IX, 4391 
Japan – Apples  Panel Report, Japan – Measures Affecting the Importation of Apples , 
WT/DS245/R, adopted 10 December 2003, upheld by Appellate Body Report, 
WT/DS245/AB/R, DSR 2003:IX, 4481  
Japan – Apples  
(Article 21.5 – US)  Panel Report, Japan – Measures Affecting the Importation of Apples – Recourse 
to Article 21.5 of the DSU by the United States , WT/DS245/RW, adopted 
20 July 2005 
Korea – Dairy  Appellate Body Report, Korea – Definitive Safeguard Measure on Imports  
of Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, 
DSR 2000:I, 3 
Korea – Dairy  Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain 
Dairy Products , WT/DS98/R and Corr.1, adopted 12 January 2000, as modified 
by Appellate Body Report, WT/DS98/AB/R, DSR 2000:I, 49 
Korea – Procurement  Panel Report, Korea – Measures Affecting Government Procurement , 
WT/DS163/R, adopted 19 June 2000, DSR 2000:VIII, 3541 
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779 WT/DS321/R 
Page xviii 
 
 
  Short Title Full Case Title and Citation 
US – Carbon Steel  Panel Report, United States – Countervailing Duties on Certain Corrosion-
Resistant Carbon Steel Flat Products from Germany , WT/DS213/R and Corr.1, 
adopted 19 December 2002, as modified by Appellate Body Report, 
WT/DS213/AB/R and Corr.1, DSR 2002:IX, 3833 
US – Certain EC Products  Appellate Body Report, United States – Import Measures on Certain Products 
from the European Communities , WT/DS165/AB/R, adopted 10 January 2001, 
DSR 2001:I, 373 
US – Certain EC Products  Panel Report, United States – Import Measures on Certain Products from the 
European Communities , WT/DS165/R and Add.1, adopted 10 January 2001, as 
modified by Appellate Body Report, WT/DS165/AB/R, DSR 2001:II, 413 
US – FSC  Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" , WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619 
US – FSC  Panel Report, United States – Tax Treatment for "Foreign Sales Corporations" , 
WT/DS108/R, adopted 20 March 2000, as modified by Appellate Body Report, 
WT/DS108/AB/R, DSR 2000:IV, 1675 
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R and Corr.1, 
adopted 20 April 2005, DSR 2005:XII, 5663 
US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of 
Gambling and Betting Services , WT/DS285/R, adopted 20 April 2005, as 
modified by Appellate Body Report, WT/DS285/AB/R, DSR 2005:XII, 5797 
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted 23 August 
2001, DSR 2001:X, 4697 
US – Hot-Rolled Steel  Panel Report, United States – Anti-Dumping Measures on Certain Hot-Rolled 
Steel Products from Japan , WT/DS184/R, adopted 23 August 2001 modified 
by Appellate Body Report, WT/DS184/AB/R, DSR 2001:X, 4769 
US – Line Pipe  Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Circular Welded Car bon Quality Line Pipe from Korea , 
WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, 1403 
US – Line Pipe  Panel Report, United States – Definitive Safeguard Measures on Imports of 
Circular Welded Carbon Quality Line Pipe from Korea , WT/DS202/R, adopted 
8 March 2002, as modified by Appellate Body Report, WT/DS202/AB/R, 
DSR 2002:IV, 1473 
US – Offset Act  
(Byrd Amendment ) Appellate Body Report, United States – Continued Dumping and Subsidy Offset 
Act of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, 
DSR 2003:I, 375 
US – Offset Act  (Byrd Amendment
 ) Panel Report, United States – Continued Dumping and Subsidy Offset Act of 
2000 , WT/DS217/R, WT/DS234/R, adopted 27 January 2003, as modified by 
Appellate Body Report, WT/DS217/AB/R, WT/DS234/AB/R, DSR 2003:II, 
489 
US – Section 211 Appropriations Act  Appellate Body Report, United States – Section 211 Omnibus Appropriations 
Act of 1998 , WT/DS176/AB/R, adopted 1 February 2002, DSR 2002:II, 589 
US – Section 211 
Appropriations Act  Panel Report, United States – Section 211 Omnibus Appropriations Act of 
1998 , WT/DS176/R, adopted 1 February 2002, as modified by Appellate 
Body Report, WT/DS176/AB/R, DSR 2002:II, 683 
US – Section 301 Trade Act  Panel Report, United States – Sections 301-310 of the Trade Act of 1974 , 
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815  WT/DS321/R 
 Page xix 
 
 
  Short Title Full Case Title and Citation 
US – Shrimp  Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, 
DSR 1998:VII, 2755 
US – Shrimp  Panel Report, United States – Import Prohibition of Certain Shrimp and Shrimp 
Products , WT/DS58/R and Corr.1, adopted 6 November 1998, as modified by 
Appellate Body Report, WT/DS58/AB/R, DSR 1998:VII, 2821 
US – Softwood Lumber VI  Panel Report, United States – Investigation of the International Trade 
Commission in Softwood Lumber from Canada , WT/DS277/R, adopted 
26 April 2004, DSR 2004:VI, 2485 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005 
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, and 
Corr.1, adopted 21 March 2005, as modified by Appellate Body Report, 
WT/DS267/AB/R 
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R and Corr.1, adopted 
23 May 1997, DSR 1997:I, 323 
US – Wool Shirts and Blouses  Panel Report, United States – Measure Affecting Imports of Woven Wool Shirts 
and Blouses from India , WT/DS33/R, adopted 23 May 1997, upheld by 
Appellate Body Report, WT/DS33/AB/R, DSR 1997:I, 343  WT/DS321/R 
 Page 1 
 
 
  I. INTRODUCTION 
A. REQUEST FOR CONSULTATIONS AND REQUEST FOR THE ESTABLISHMENT OF A PANEL  
1.1 On 8 November 2004, the European Communitie s requested consultations with Canada 
pursuant to Article XXII:1 of the General Agre ement on Tariffs and Trade 1994 ("GATT 1994") and 
Article 4 of the Understanding on Rules and Pro cedures Governing the Settlement of Disputes 
("DSU") regarding the Canada's continued suspen sion of concessions and other obligations under the 
covered agreements, after the European Comm unities' adoption of Directive 2003/74/EC on 
22 September 2003 amending Council Directive 96/22/ EC concerning the prohibition on the use in 
stockfarming of certain substances having a hormonal or thyrostatic action and of beta-agonists.  The 
European Communities has notified this Directive to the DSB and stated that it has fully implemented 
the recommendations and rulings of the DSB in the dispute European Communities – Measures 
Concerning Meat and Meat Products (Hormones) (EC – Hormones).   The consultation request was 
circulated in document WT/DS321/1 dated 10 Nove mber 2004.  The consultations were held on 
16 December 2004 but the parties failed to reach a mu tually satisfactory resolution of the dispute.  
1.2 On 14 January 2005, the European Communiti es requested the establishment of a Panel 
pursuant to Articles 4.7 and 6 of the DSU, as well as Article XXIII of the GATT 1994.1 
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL  
1.3 At its meeting on 17 February 2005, the DSB established a Panel pursu ant to the request of 
the European Communities in document WT/DS321 /6, in accordance with Article 6 of the DSU 
(WT/DSB/M/183), with standard terms of reference as below: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the European Communities in document WT/DS321/6, the matter referred to the 
DSB by the European Communiti es in that document, and to  make such findings as 
will assist the DSB in making the recommendations or in giving the rulings provided 
for in those agreements."2 
1.4 On 27 May 2005, the European Communities request ed the Director-General to determine the 
composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU.  On 6 June 2005, the 
Director-General accordingly composed the Panel as follows: 
 Chairman: Mr. Tae-yul Cho 
 
 Members: Mr. William Ehlers    Ms. Claudia Orozco 
 
1.5 Australia, Brazil, China, India, Mexico, Ne w Zealand, Norway, Chinese Taipei and the 
United States have reserved their rights to particip ate in the Panel proceedings as a third party. 
C. P
ANEL PROCEEDINGS  
1.6 At the joint request of the parties, and on 1 August 2005, the Panel decided that its meetings 
at which the parties were invited to appear, w ould be open for observation by the public through 
closed-circuit broadcast, provided satisfactory logi stical arrangements could be maintained by the 
Secretariat.  The Panel, however, after consulting the third parties, also decided that the session with 
                                                      
1 WT/DS321/6. 
2 WT/DS321/7. WT/DS321/R 
Page 2 
 
 
  the third parties would remain closed.3  The Panel notified the DSB Chairman of this decision on the 
same day.4  The Panel held its first joint substantive m eeting with the parties to this dispute and the 
parties to the dispute on United States – Continued Suspension of Obligations in the EC – Hormones 
Dispute  (WT/DS320) on 12-15 September 2005.  The me eting with the parties was open for public 
observation through closed-circuit broadcast.  It also  met with the third parties in a closed special 
session on 14 September 2005.   
1.7 The Panel in this dispute also decided to seek  advice from scientific and technical experts 
after consultation with parties on 20 October 2005.5  After consulting the parties, it finalized its 
Working Procedures for Consultations with Scien tific and/or Technical Experts on 25 November 
2005.6  It selected six scientific and technical experts in consultation with the parties, sought their 
advice as well as advice from the Codex Alimenta rius Commission (Codex), the Joint FAO/WHO 
Expert Committee on Food Additives (JECFA), and the International Agency for Research on Cancer 
(IARC) on scientific and technical questions in writi ng.  The Panel also met with the six experts and 
four representatives from Codex, JECFA and IARC in the presence of the parties to this dispute and 
the parties to the dispute on United States – Continued Suspension of Obligations  (WT/DS320) 
dispute on 27-28 September 2006.  The expert from IARC served both as an individual expert to the Panel and as the representative of the IARC during the meeting.  The Panel held its joint second 
substantive meeting with the parties on 2-3 October 2006.  These meetings  were also open for public 
observation through a closed-circuit broadcast. 
1.8 On 31 July 2007, the Panel issued its interim report to the parties.  On 28 September and 
19 October 2007, the Panel received comments from the pa rties on the interim report.  Neither of the 
parties requested an interim review meeting.  On  21 December 2007, the Pane l issued its final report 
to the parties. 
II. FACTUAL ASPECTS 
A. H
ISTORY OF THE DISPUTE  
2.1 On 13 February 1998, the DSB adopted the Panel and Appellate Body reports in EC – 
Hormones .  In doing so, the DSB recommended that th e European Communities bring the measures at 
issue into conformity with WTO rules.  The Arbitrator appointed pursuant to Article 21.3(c) of the 
DSU determined that the European Communities should have a "reasonable period of time" until 
13 May 1999 to comply with the recommendations.  On 26 July 1999, Canada obtained from the DSB 
the authorization to suspend obligations up to the level of 11.3 million Canadian Dollars per year.  
The arbitrators acting pursuant to Article 22.6 of the DSU had previously determined this level to be 
equivalent to the level of nullifica tion or impairment (Article 22.4 of  the DSU) suffered by Canada at 
the time of its recourse to arbitration in May 199 9.  On 1 August 1999 and pursuant to the DSB's 
authorization, Canada introduced import duties in  excess of bound rates to imports from the European 
Communities by imposing a 100% ad valorem rate of duty on a list of articles that are the products of 
certain EC Member States.7 
                                                      
3 See Annex A-1, Letter to the Parties dated 1 August 2005 on the Panel Decision on Open Hearings 
for Public Observation.  Annex A-2, Working Procedures for the Panel. 
4 WT/DS321/8. 
5 Annex A-3, Letter to the Parties dated 20 October 2005 on the Panel Decision on Consulting 
Scientific and Technical Experts. 
6 Annex A-4, Letter to the Parties dated 25 November 2005 on the Panel Decision on Certain Issues 
concerning the Experts' Working Procedures;  Annex A-5, Working Procedures for Consultations with 
Scientific and/or Technical Experts. 
7 The measures were adopted as the "European Union Surtax Order", P.C. 1999-1323, 28 July 1999, 
published in Canada Gazette Part II, Vol. 133, No. 17, SOR/99-317.  WT/DS321/R 
 Page 3 
 
 
  2.2 The original measures in the EC – Hormones (Canada)  dispute were provided in 
Directive 96/22/EC, which prohibited the administer ing to farm animals of substances having a 
thyrostatic  action or substances having an oestrogenic, androgenic,  or gestagenic  action as well as the 
placing on market of meat from such animals.8  On 22 September 2003, the European Communities 
adopted Directive 2003/74/EC of the European Pa rliament and of the Council amending Council 
Directive 96/22/EC concerning the prohibition on th e use in stockfarming of certain substances 
having a hormonal or thyrostatic action and of beta-agonists.  The Directive was published and 
entered into force on 14 October 2003.  It provid es for a permanent prohibition on oestradiol-17 β and 
a provisional prohibition on testosterone, progester one, trenbolone acetate, zeranol and melengestrol 
acetate.  
2.3 Prior to the adoption of the Directive 2003/74/EC, and in order to comply with the 
recommendations and rulings of the DSB and the covered agreements, the European Communities 
initiated and funded a number of specific scientif ic studies and research projects for the purpose of 
conducting risk assessment(17 in total).  The Scien tific Committee on Veterinary Measures relating to 
Public Health (SCVPH), an independent expe rts committee established under EC legislation, 
reviewed the results of these studies and other publ icly available information as well as the data it 
collected from various sources including CODEX/JECFA, and published its opinion entitled 
"Assessment of Potential Risks to Human Health from Hormones Residues in Bovine meat and Meat 
Products" ("the 1999 SCVPH Opinion") on 30 April 1999.   The SCVPH subsequently reviewed this 
Opinion on two occasions and adopted review re ports on 3 May 2000 (" the 2000 SCVPH Opinion") 
and on 10 April 2002 (the 2002 SCVPH Opinion").   The SCVPH Opinions address six hormonal 
substances: oestradiol-17 β, testosterone, progesterone, trenbolone acetate, zeranol and melengestrol 
acetate .9   
2.4 In light of these Opinions, which the European  Communities contends are risk assessments, 
the European Communities prohibited the placing on  the market of meat and meat products from 
animals that have been treated with oestradiol-17 β for growth promotion purposes on the grounds that 
there was a substantial body of evidence showi ng that its residues are both carcinogenic and 
genotoxic. With respect to testosterone, progest erone, trenbolone acetate, zeranol and melengestrol 
acetate, the European Communiti es introduced the same measure on a provisional basis on the 
grounds that the available pertinent scientific in formation reflected in the above-mentioned SCVPH 
Opinions showed the existence of risks, but all th e information and data necessary to conduct a more 
objective and complete risk assessment were insufficient or missing.10 
2.5 On 27 October 2003, the European Communities notified to the DSB the adoption, 
publication and entry into force of the Direc tive. In the same communi cation, the European 
Communities explained that it considers itself to have fully implemented the recommendations and 
rulings of the DSB in the EC – Hormones dispute and as a consequence, it considers the Canada's 
suspension of concessions vis-à-vis the Eur opean Communities to be no longer justified.11 
2.6 Canada disagreed in the DSB meeting held on 7 November 2003 that the new Directive was 
based on science and stated that it would not remove  the retaliatory measures vis-à-vis the European 
Communities.12 
                                                      
8 WT/DS48/R/CAN, paras. 2.1-2.5. 
9 See, Request for the Establishment of a Panel by the European Communities, WT/DS321/6. 
10 Ibid.  S ee also  the EC's second written submission, para. 134. 
11 European Communities – Measures Concerning Meat and Meat Products (Hormones) , 
Communication from the European Communities, WT/DS26/22, WT/DS48/20, 28 October 2003. 
12 DSB, Minutes of Meeting held on 7 November 2003, WT/DSB/M/1 57, 18 December 2003, para.31; 
See also the Request for the Establishment of a Panel by the European Communities, WT/DS321/6. WT/DS321/R 
Page 4 
 
 
  B. MEASURE AT ISSUE  
2.7 The measure challenged by the European Comm unities is the suspension of concessions and 
other obligations under the covered agreements, c ontinued without recourse to the procedures under 
the DSU, after the European Communities' adoption of Directive 2003/74/EC on 22 September 2003 amending Council Directive 96/22/EC concerning th e prohibition on the use in stock-farming of 
certain substances having a hormonal or thyrostatic  action and of beta-agonists.  The measure is 
provided in Canada's European Union Surtax Order  and is enforced as of 1 August 1999 .  The EC's 
Directive was published and entered into force on 14 October 2003.  The EC stated in its notification 
to the Dispute Settlement Body (DSB) that it has fully implemented the recommendations and rulings 
of the DSB in the dispute European Communities – Measures Concerning Meat and Meat Products 
(Hormones) (WT/DS48/AB/R ,WT/DS48/R/CAN).
13 
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS  
3.1 The European Communities request s the Panel to find that  Canada's unilateral conduct: 
(a) violates Article 23 of the DSU and, more specifically, Article 23.2(a), read in 
conjunction with Article 21.5 and Article 23.1 of the DSU; 
(b) violates Article 23.1 of the DSU read in conjunction with Articles 22.8 and 3.7 of the 
DSU; and 
(c) violates Articles I and II of the GATT 1994.14 
3.2 In the alternative, should the Panel find no viol ation of Article 23 of the DSU, the European 
Communities requests the Panel to find that Canada 's measure violates Article 22.8 of the DSU and 
Articles I and II of the GATT 1994.15 
3.3 Canada requests the Panel to reject the Europ ean Communities' claims and find that Canada 
has not maintained its suspension of concessions with regard to the Eu ropean Communities in 
contravention of Articles 3.7, 21.5, 23.1, 23.2(a) and 22.8 of the DSU, and Articles I and II of the 
GATT 1994.16 
IV. ARGUMENTS OF THE PARTIES 
A. INTRODUCTION  
4.1 The arguments of the parties are set out in their written submissions to the Panel and in their 
oral statements made during Panel meetings, as well  as in their written replies to questions from the 
Panel.  This Section presents a summary of the arguments of parties based on the executive summaries prepared by the parties where such su mmaries were made available to the Panel. 
B. P
ARTIES ' REQUESTS AND ARGUMENTS ON OPENING THE PANEL MEETING FOR THE PUBLIC 
OBSERVATION  
4.2 At the Panel's organizational meeting with th e parties on 13 June 2005, the parties requested 
that the Panel hold open meetings with the parties in this dispute.  The Panel posed written questions 
                                                      
13 WT/DS321/6, WT/DS26/22, WT/DS48/20. 
14 EC's first written submission, para. 150. 
15 EC's first written submission, paras. 24 and 151. 
16 Canada's first written submission, para. 133.  WT/DS321/R 
 Page 5 
 
 
  to the parties and the third parties regarding this joint request after its organizational meeting.  The 
parties answered these questions in writi ng on 20 June 2005 and on 7 July 2005. 
1. Arguments of the European Communities 
(a) Whether panels are permitted to open hearings  under Article 12 (inc luding Appendix 3), 
Articles 14.1 and 17.10 of the DSU   
4.3 The European Communities argues th at open hearings are permissible at the panel level.  The 
European Communities submits that Appendix 3,  second paragraph, first sentence of the DSU 
excludes public access to panel hearings, but this ru le is not obligatory, as Article 12.1 of the DSU 
states: "Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise 
after consulting the parties to the dispute."  In  the European Communities' view, it is therefore 
permissible for a panel to adopt, under the procedur e of Article 12.1 of the DSU, working procedures 
that foresee open hearings.   
4.4 The European Communities also argues that this conclusion is not affected by Article 14.1 of 
the DSU. The term "deliberations" under Article 14. 1 of the DSU designates the part of the panel's 
work where it internally discusses the case, including the decision it intends to pronounce in its report 
and the supporting reasoning.  This is the ordinary m eaning of this term, in which it is also used in 
other systems of adjudication, and the Fren ch ("délibérations") and Spanish versions 
("deliberaciones") fully coincide w ith this meaning.  These deliberations take place in the presence of 
the Secretariat team working on the dispute, but w ithout the parties.  The term "deliberations" does 
not cover the meetings with the parties, for which di fferent terminology is used in Appendix 3 of the 
DSU.  The context supports this reading because ever ything that is addressed in the three paragraphs 
of Article 14 of the DSU relates to the independe nt work which the panel conducts alone, in the 
absence of the parties.  Had the drafters of the DSU wanted to exclude open panel hearings, they 
would have used a different language  in Article 14.1 of the DSU.  They would not have addressed this 
question solely in the Appendix 3 working procedur es from which a panel may depart, as Article 12.1 
expressly stipulates. 
4.5 In the European Communities' view, this interpre tation is also corroborated by the use of the 
term "proceedings" in Article 17.10 of the DSU which appears to be broader.  Meaning must therefore 
be given to the DSU negotiators' deliberate choice of  the term "deliberations" in Article 14.1 of the 
DSU. 
4.6 The European Communities argues that such interpretation is the long-standing position of 
several Members and has never been rejected by any WTO Member in any dispute.  WTO Members 
have repeatedly stated that the DSU rules on pane l procedures are flexible and allow the provision of 
open hearings (Articles 14.1, 12.1, Appendix 3).  Obviously, since a panel is obliged to consult the 
parties before departing from the working proce dures suggested in Appendix 3, the parties' position 
carries significant weight for the panel's decision.  The EC considers that in the present case where all 
the parties have agreed to open hearings, the Panel should accommodate the parties' request.  
Article 18.2 of the DSU also provides context and s upports this position as it implies that parties are 
entitled to "waive" the confidentiality of their positions. 
(b) Legal implications of open hearings on covered persons under the Rules of Conduct 
4.7 The European Communities considers that no lega l issues arise under the Rules of Conduct.  
These Rules state in Section II, paragraph 1 that each covered person "shall r espect the confidentiality 
of proceedings" (see also Section VII, paragraph 1) , and also that "[t]hese Rules shall in no way 
modify the rights and obligations of Members under the DSU nor the rules and procedures therein."    
In the European Communities view, the Rules of Conduct are and remain fully binding on all covered WT/DS321/R 
Page 6 
 
 
  persons in this dispute, even if the hearings are opened to the public. Simultaneously, the Rules of 
Conduct do not prevent the panel from fulfilling its task under the DSU and in accordance with the 
procedural rules contained therein, which permit public hearings.  The Rules of Conduct expressly 
state that they do not modify these DSU rules. 
4.8 The European Communities also considers th at Article 18.2 of the DSU again provides 
context in that it shows that parties are entitled to  "waive" the confidentiality of their positions.  The 
Panel's deliberations will in any event not be affe cted by the opening and remain confidential, as 
required by Article 14.1 of the DSU. 
(c) Systemic and political impact of opening hearings 
4.9 The European Communities is of the view that  there are no implications for WTO Members 
who are not parties to this dispute, notably the parti es to another dispute remain able to adhere to their 
preference, if any, not to open the hearings in th eir dispute. Opening a hearing for observers who will 
remain completely passive during the session would not  change anything about the intergovernmental 
character of the WTO, nor would it impair the chances to reach a mutually  agreed solution, as 
preferred by the DSU (Article 3.7), if the parties jo intly request the hearings to be open, in line with 
their general policy to apply transparency where the DSU rules allow (for in stance by making public 
their submissions).  Also, there are no implications for third parties and accordingly there is no need 
to consult them before the Panel adopts its wo rking procedures because the parties have jointly 
requested that the public be excluded from the thir d parties' session during the presentation by a third 
party who prefers this.  Thus, opening hearings to  public observation will not affect third parties 
beyond the extent to which they themselves agree.  The DSU is clear in that the panel must consult the parties, not the third parties, before adopting Working Procedures in departing from Appendix 3. 
4.10 The European Communities also states that consulting the DSB and General Council Chairs 
or the Director-General before opening the h earing for public observation does not seem necessary 
because under the DSU the Panel has the power to ta ke decisions regarding its Working Procedures 
and is required to fulfil its task in full independence.   If all parties are in agreement on this question of 
working procedures, the Panel should accommodate thei r request if the parties consider that this is 
part of the best way to "secure a positive solution to the dispute", which is the aim of the dispute 
settlement mechanism (Article 3.7 of the DSU).   
(d) What procedures can be adopted to protect confidential information in an open hearing 
4.11 The European Communities indicates that it does not expect that confidential information will 
be submitted in this dispute.  Should this neve rtheless happen, one could easily apply appropriate 
means to close the portion of any meeting where confidential information is discussed.  
4.12 The European Communities does not consider that  there is any issue of confidentiality in 
relation to information submitted by other Member s or non-Members (under Article 13 of the DSU), 
unless the confidentiality requirement of the last sente nce of Article 13.1 of the DSU applies, in which 
case the corresponding portion of any meeting where this information is discussed could be closed. 
4.13 With respect to the third party session, the Eu ropean Communities considers that each third 
party should decide whether to open the part of th e third party session dealing with that third party's 
statement.  WT/DS321/R 
 Page 7 
 
 
  2. Arguments of Canada 
(a) Whether panels are permitted to open hearings  under Article 12 (inc luding Appendix 3), 
Articles 14.1 and 17.10 of the DSU 
4.14 Canada argues that the DSU allows for open h earings of WTO panels.  Article 14.1 of the 
DSU states that panel "deliberations" shall be confid ential.  The reference to "deliberations" indicates 
that this paragraph applies to the internal deliberations of panels, not  to the panels' meetings with the 
parties.  Furthermore, paragraph 2 of the Working Procedures in Appendix 3 of the DSU, which refers 
to closed panel meetings, is subject to DSU Articl e 12.1, which specifically allows a panel to deviate 
from the Working Procedures in Appe ndix 3 after consulting parties to  the dispute.  In cases such as 
this one, where all parties to the dispute have agreed  to open hearings, Canada is of the view that the 
Panel should accommodate such a request.  This position is consistent with the right of all parties to 
waive confidentiality as expressed in Article 18.2 of  the DSU, which states that a party is not 
precluded from disclosing statements of its own positions to the public.  In the present case, it is clear 
that all parties have agreed beforehand to waiv e their right to confidentiality during the panel 
hearings.   
(b) Legal implications of open hearings on covered persons under the Rules of Conduct 
4.15 Canada argues that the relevant provision in the Rules of Conduct is paragraph VII.1, which 
provides: "[e]ach covered person shall at all times maintain the confidentiality of dispute settlement 
deliberations and proceedings together with any info rmation identified by a party as confidential.  No 
covered person shall at any time use any inform ation acquired during such deliberations and 
proceedings to gain personal adva ntage or advantage for others. " 
4.16 This provision, in Canada's view , requires confidentiality on the part of members of a panel of 
deliberations and proceedings.  However, in accord ance with paragraph II:1 of the Rules of Conduct, 
which expressly states that these Rules do not modify  the rules and procedures under the DSU, this 
provision is subject to a decision of the Panel to ho ld public hearings pursuant to Article 12.1 of the 
DSU.  Therefore, Canada considers that the obligation of covered persons to maintain the 
confidentiality of a panel proceedings continues to a pply but is modified to the extent that the Panel 
has decided to hold public hearings.  
(c) Systemic and political impact of opening hearings 
4.17 Canada considers that opening the panel mee tings to the public can only contribute to the 
legitimacy, and perception of legitimacy, of the di spute settlement process.  The desire of the 
disputing parties to hold open hearings in this  case does not have any broader systemic or political 
implications – it merely serves the interests of the disputing parties in this case consistent with the 
institutional framework of the WTO and with Article 12.1 of the DSU.   
4.18 Canada submits that Article 12.1 of the DSU re quires that panels decisions on their working 
procedures be taken in view of c onsultation with parties.  This pr ovision does not require consultation 
with third parties.  However, Canada recognizes th at third parties may have requested third party 
status with the expectation of participating in cl osed proceedings.  Therefore, Canada suggests that 
after the Panel decides to hold public hearings it sh ould consult with third parties to (a) identify any 
concerns of third parties regarding their particip ation in the proceedings, and (b) explore possible 
steps to accommodate such concerns.  Such accommodation measures may include turning off 
cameras during the delivery of oral statements of thir d parties that do not wish to deliver such an oral 
statement in a public hearing.  Canada does not see a need for the Panel to consult with the Chairs of 
the DSB, of the General Council or of the DSB Sp ecial Sessions, or with the Director General. WT/DS321/R 
Page 8 
 
 
  (d) What procedures can be adopted to protect confidential information in an open hearing 
4.19 Canada believe that a provision should be a dded to the Working Procedures that would 
provide a mechanism to protect business-confidentia l information that may become the subject of 
discussion during the public hearings.  Canada recommends a procedure under which a party may 
request the Panel to suspend the public nature of  the hearing for as long as such business-confidential 
information was being discussed.    
4.20 As to the third parties, Canada submits that they will have to follow the provisions in the 
Working Procedures adopted by the Panel pursuant to DSU Article 12.  Thus it is open to the Panel to decide that the oral statements by third parties will take place in public meeting.  However, it is also 
within the Panel's discretion to leave it to the choi ce of individual third parties whether they wish to 
make their oral statements in a private or public session.  Canada prefers giving third parties such a 
choice.  Canada recommends the adoption of a pract ical procedural mechanism to suspend the public 
nature of the hearing as necessary. 
4.21 The treatment of written materials presente d by other WTO Members or by non-Members 
falls outside the scope of issues raised by the possi ble public nature of the hearing.  None of the 
parties has proposed a modification to the Worki ng Procedures that would expand the categories of 
participants in the hearing.  Nevertheless, Ca nada recognizes that the written evidence provided by 
other WTO Members or non-Members may have been provided in confidence.  To the extent that 
such confidential information is discussed during th e hearings, there will be need to add to the 
Working Procedures a provision that would permit th e Panel to interrupt the public nature of the 
hearing before a discussion of such confidential writte n materials takes place.  In Canada's view, such 
a procedure should be similar to that outlined above  in respect of business-confidential information. 
C. F
IRST WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES  
1. Introduction 
4.22 This case is about procedural obligations under the DSU of Members that continue to apply 
the suspension of concessions or other obligatio ns after almost two years despite the proper 
notification by the responding party that it has a dopted the necessary measures to implement the DSB 
recommendations and rulings.  In the alternativ e, the European Comm unities makes conditional 
substantive claims under Article 22.8 of the DSU and Articles I:1 and II of the GATT 1994. 
2. Factual aspects 
4.23 Following an authorization by the DSB, Ca nada suspended tariff concessions and other 
related obligations up to the le vel of Canadian $ 11.3 million. Subsequently, the European 
Communities implemented the original DSB recommendations and rulings by Council Directive 2003/74/EC.  However, Canada continues to suspend concessions and related obligations 
against certain products originating in the Europ ean Communities based on a unilateral determination 
that the EC's implementation measure is insuffici ent to comply with the DSB recommendations and 
rulings. 
3. Legal arguments:  Part I – Violation of Ar ticles 23, 21.5, 22.8 and 3.7 of the DSU and 
Articles I and II of the GATT 1994  
(a) The structure of Article 23 of the DSU 
4.24 Article 23 of the DSU lays down the fundamental principle that the dispute settlement system 
of the WTO is the exclusive means to redress any vi olation of any provision of the WTO Agreement.  WT/DS321/R 
 Page 9 
 
 
  Any attempt to seek "redress" can take place only in the institutional framework of the WTO and 
pursuant to the rules and procedures of th e DSU.  This has been confirmed in US – Section 301 Trade 
Act and US – Certain EC Products.  
4.25 Article 23.1 of the DSU contains a general obligation to follow the rules and procedures of 
the DSU whereas Article 23.2 of the DSU lists a number of "specific and clearly-defined forms of prohibited unilateral action."  The relationship be tween the two paragraphs has two distinguishing 
features. First, Article 23.2 of the DSU has to be re ad in the context of the first Paragraph ("in such 
cases"), that is, it has to be established that the Member's action is performed with a view to redressing a WTO violation.  Second, the specific fo rms described in Paragr aph 2 do not exhaust the 
list of prohibited unilateral action.   There is a relationship of lex specialis  and lex generalis which 
implies, on the one hand, that whenever there is a violation of a specific case in Paragraph 2 of 
Article 23, there always is also a violation of Para graph 1 of that provision; and on the other hand, that 
a particular conduct that may not come under the sp ecific cases listed in paragraph 2 of Article 23, 
may still constitute a violation unde r paragraph 1 of that provision. 
(b) Applicability of Article 23 – Article 23.1 of the DSU: Seeking the redress of a WTO 
Violation 
4.26 The meaning of "seeking the redress of a violation" under Article 23.1 of the DSU has been 
extensively discussed by previous panels, i.e. US – Section 301 Trade Act and US – Certain EC 
Products .  The "violation" with regard to which redr ess is sought need not be one that has been 
identified as such by the relevant WTO bodies.  It suffices if it is perceived as being one by the Member in question.  The suspension of concessions  or other obligations is a means of "redress." 
Indeed it is the very means the WTO system envisa ges as a last resort remedy to WTO violations 
according to Articles 3.7 and 22.1 of the DSU. 
4.27 It is obvious that when it suspended con cessions in August 1999, Canada was seeking to 
redress a (WTO-determined) violation. Back then , Canada reacted to the European Communities' 
failure to implement, within the reasonable pe riod of time, the DSB recommendations in the EC – 
Hormones  case.  It requested and obtained a DSB aut horization under Article 22.2 (respectively 22.7) 
of the DSU, following which Canada decided on th e imposition of 100% additio nal duties.  Canada's 
way of proceeding back then is the very example of  "seeking to redress a WTO violation" in line with 
the rules and procedures of the DSU. 
4.28 There can equally be no doubt that, if Canada  is continuing the suspension of concessions to 
this day despite the European Communities' adop tion of an implementation measure, it does so 
because it still is seeking to redress a WTO violation.  This can already be deduced from the fact that 
the August 1999 measure of applying duties in exces s of bound rates is being continued without there 
being any modification to it.  Since that measure is motivated to be imposed as "a result of the EC's 
failure to implement the recommendations and rulin gs of the WTO," and since Canada has neither 
abolished nor changed the measure, nor modified its reason,  Canada is obviously of the view that the 
EC's failure to implement the recommendations and rulings of the WTO still persists.  Indeed, the 
continuation of the suspension of concessions is an unequivocal indication that Canada believes that 
there continues to be a violation.  Otherwise it would have ended the suspension of concessions in 
accordance with its obligations under Article 22.8 of the DSU.  Moreover, this is the explicit view 
Canada has formally taken in the DSB and in various official statements. 
(c) Violation of Articles 23.2(a) and 21.5 and of Article 23.1 of the DSU 
4.29 Canada's conduct is contrary to the specifi c prohibition of unilateral conduct set out in 
Article 23.2(a) of the DSU.  Instead of seeking redress of the perceived continued failure of the 
European Communities to implement the DSB's re commendations and rulings through the continued WT/DS321/R 
Page 10 
 
 
  suspension of concessions,  Canada should ha ve introduced a compliance procedure under 
Article 21.5 of the DSU.  Because it has not done so, it has violated the specific prohibition of 
unilateral conduct set out in Article 23.2(a) of the DSU.  This violation of Article 23.2(a) and 21.5 
constitutes at the same time a violation of Article 23.1 of the DSU. 
4.30 As the Panel in US – Section 301 Trade Act  has noted, the following conditions need to be 
fulfilled in order to find a violation of Article 23.2( a) of the DSU.  First, given the "chapeau" of 
Article 23.2, it needs to be established that there is  "such a case", namely that a Member is seeking to 
redress a WTO violation. This is the case here. 
4.31 Second, Article 23.2(a) of the DSU requires that a Member has made a "determination to the 
effect that a WTO violation has occurred."  The or dinary meaning of the term "determination," has 
been noted by the Panels in US – Section 301 Trade Act  and US – Certain EC Products.  Such a 
decision need not have a specific form, and can  be inferred from action.  The suspension of 
concessions or other obligations is the very means (a lbeit of last resort) to react to a violation and 
therefore necessarily implies a decision that ther e is a violation.  That such a decision bears 
consequences in WTO trade relations hardly requir es any explanation.  The present case is similar to 
the situation in US – Certain EC Products .  Again, the action in question is the suspension of 
concessions and related obligations.  In contrast to the above case, nevertheless, the suspension here 
had initially been authorized by the DSB based on a multilateral determination that there was a 
violation.  This multilateral dete rmination, however, was made with  respect to the measures applied 
by the European Communiti es at the time.  Logically, it could not and did not apply to the measures 
subsequently adopted and properly notified to the WTO by the European Comm unities.  With regard 
to the current legislative situation in the Eur opean Communities, no multila teral determination has 
been made by the time at which this Panel was estab lished.  If Canada nevert heless continues to apply 
the suspension of concessions an d related obligations, it necessarily implies that it has unilaterally 
determined that there continues to be a violati on.  It has, in addition, explicitly said so. 
4.32 Third, Article 23.2(a) of the DSU is violated if the determination is not made in accordance 
with the rules and procedures of the DSU, or is not consistent with the findings of a dispute settlement 
organ.  The DSU provides for a specific procedure, namely Article 21.5 of the DSU, to address the 
situation that Members disagree over the existence or  consistency of measures taken to comply with 
the recommendations and rulings of the DSB. 
4.33 There exists obviously a disagreement as to whether or not, by adopting 
Directive 2003/74/EC, the European Communities has implemented the recommendations and rulings 
from the DSB in the EC – Hormones case.  Article 21.5 of the DSU requires that disagreement shall  
be decided through recourse to dispute settlement .  The European Commun ities has invited several 
times Canada, but, to date, it refuses to initiate a co mpliance procedure under Article 21.5 (or, for that 
matter, any other dispute settlement procedure under the DSU).  Instead, it simply continues to apply 
the suspension of concessions and related obligations as if no "measure  to comply" had been taken or 
the non-compliance of the new directive of the Eu ropean Communities had already been established. 
4.34 As the determination in th e present case has been made before the commencement, let alone 
the exhaustion of the Article 21.5 pr ocedure, it is necessarily not one that has been made consistent 
with the findings contained in an adop ted panel or Appellate Body report. 
(d) Canada's continued suspension of concessions a nd related obligations is in violation of 
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU 
4.35 Under Article 23.1 of the DSU, Canada is obliged  to have recourse to, and abide by, the rules 
and procedures of this Unde rstanding.  This encompasses, inter alia , Articles 22.8 and 3.7 of the 
DSU.  In this respect, the following should be noted.  WT/DS321/R 
 Page 11 
 
 
  4.36 The suspension of concessions or other obliga tions is limited in time.  This temporal 
limitation is the very foundation of the retaliation system under the DSU.  The importance of this 
principle is already demonstrated by the fact that  the "temporary nature" of countermeasures appears 
contextually at two places in Article 22 of the DSU, in Paragraph 8 and in Para graph 1.  The temporal 
limitation is a practical consequence of the fact that suspension of concessions should only be applied 
as "a last resort", Article 3.7 of the DSU.  This  means that the suspension of concessions should only 
apply where justified and necessary. 
4.37 The temporary nature of the suspension of concessions or other obligations has been 
recurrently interpreted by arbitrators to indicate th at one of the main objects and purposes of sanctions 
is to induce compliance by the violating WTO member with its obligations.  In deed, in reaching this 
conclusion the arbitrators followed a suggestion by Canada (see  EC – Bananas III (US) (Article 22.6 – 
EC)).  The objective of inducing compliance enta ils, however, that once a Member has adopted 
compliance measures which are not properly challe nged by the complaining Member, the suspension 
of concessions or other obligations can not be app lied any longer.  Indeed, in such a scenario the 
suspension of concessions or other ob ligations would be deprived of one  of its main objectives, i.e. to 
achieve implementation of a DSB decision, for the simple reason that the WTO Member has already taken measures to implement the DSB recommendati on.  In this case, the objective to induce 
compliance can only revive after it has been prope rly established that the implementing measure has 
been insufficient to remedy a WTO violation. 
4.38 Article 22.8 of the DSU prohibits the continue d unilateral application of the suspension of 
concessions or other obligations when the measure which has been found inc onsistent is removed. 
The term "removed" thereby refers to the complia nce by a WTO Member because this provision is 
based on the respect of the WTO obligations by the Member concerned (see Article XVI:4 of the 
WTO Agreement and Article 19.1 of the DSU).  The scope of the compliance obligation is 
determined by the DSB recommendations and ruling s following the adoption of the Panel and/or 
Appellate Body report (Articles 21.5, 22.2 of the DSU). 
4.39 Article 22.8 of the DSU does not specify how the removal of the WTO inconsistency is 
determined.  However, in the light of its context, i.e. Articles 21.5 and 23.2(a) of the DSU, and given 
the exceptional nature of countermeasu res, i.e. their temporal limitati on, it is clear that a Member can 
not unilaterally determine that the WTO inconsis tency persists despite the notification of a 
compliance measure.  In very much the same vein, a Member can not decide to continue to suspend 
concessions or other obligations unilaterally.  Th e WTO inconsistency of the implementing measure 
can only be determined in accordance with the appr opriate procedure, namely Article 21.5 of the 
DSU. Unless such a procedure concludes that th e compliance measure does not fully implement the 
DSB recommendations and rulings, it cannot be presumed that this is the case. 
4.40 This also follows from the general principle of  good faith as it applies in international State 
relations, under which States are normally considered to  act in conformity with their obligations. This 
principle has been widely confirmed in the international (trade) jurisprudence (see ICJ Corfu Channel , 
EC – Hormones (Article 22.6) , Chile – Alcoholic Beverages , Canada – Aircraft  (Article 21.5 – Brazil) 
and it also applies for implementing measures (
Canada – Dairy (Article 21.5 – New Zeal and and 
US II), EC – Bed Linen (Article 21.5 –India)).  
4.41 Therefore, it is clear that Canada could not  unilaterally determine that the European 
Communities implemented the DSB recommendations a nd rulings in a WTO inconsistent way.  To 
the contrary, the European Communities must be presumed to have complied with its WTO 
obligations, if Canada refuses to establish the contrary. 
4.42 Once the inconsistency of the measure has been  removed, Article 22.8 of the DSU provides 
that "the suspension of concessions or other obligations shall be te mporary and shall only be applied WT/DS321/R 
Page 12 
 
 
  until such time as the measure found to be inconsiste nt with a covered agreement has been removed."  
This provision is mandatory.  It does not leave an y margin of discretion to the retaliating Member, 
thereby corroborating the exceptional nature of th e imposition of countermeasures.  As explained 
above, a Member which contests the removal of the in consistency of the measure has to abide by the 
rules and procedures under the DSU, i.e. Article 21.5 of the DSU.  Only if it is established in such a procedure that the WTO inconsistency persists is th e application of the suspension of concessions or 
other obligations permissible under Article 22.8 of the DSU. 
4.43 Under the same logic, Article 22.8 of the DSU does not allow for the application of 
countermeasures on the basis of a unilateral  determination regarding th e WTO inconsistency of the 
measure. Rather, Article 22.8 of the DSU, read in  its context with Articles 21.5 and 23.2(a) of the 
DSU, requires that in the absence of an adver se finding, the suspension of concessions or other 
obligations shall not "be applied" any longer.  This langua ge is open in, at least, three directions: 
4.44 Firstly, it indicates that the suspension of concessi ons or other obligations must be terminated 
in case a compliance measure is not challenged, th e measure thus being accepted as being in full 
accordance with the WTO agreements.  
4.45 Secondly, Article 22.8 of the DSU shows th at the suspension of concessions or other 
obligations must not be applied any longer if th e complaining Member delays, postpones or refuses 
the initiation of an Article 21.5 proceeding.  As a WTO Member is presumed to act in conformity 
with its obligations, it follows necessarily that thro ugh the compliance measure it is presumed to have 
removed the WTO inconsistency of the measure at  least when the followi ng three conditions are 
fulfilled: (1) the Member has followed its intern al decision-making procedures that are normally 
applied for the purpose of adopting compliance measures of that kind; (2) the elaboration, deliberation 
and adoption of the compliance measure is done in an open and transparent manner, and (3) the 
compliance measure is notified properly to the WTO.   Therefore, the suspension of concessions or 
other obligations should not apply an y longer.  This case is particularly relevant in the present dispute 
where Canada has been refusing for almost two years to initiate the compliance procedure under 
Article 21.5 and to cease the suspension of concessions  and related obligations against the European 
Communities.  Thus, Canada continues the suspen sion of concessions and related obligations on the 
basis of a unilateral determination regarding th e WTO-inconsistency of the notified compliance 
measure. 
4.46 In the light of the two first conclusions, it woul d also be appropriate to infer from Article 22.8 
read together with Article 23.1 of the DSU that the suspension of concessions or other obligations 
should not continue to be applied until the WTO inconsistency of the prope rly notified measure has 
been positively determined by the DSB. 
4.47 This result is also corroborated by the system  and overall thrust of Article 23 of the DSU, 
which is to strengthen the multilateral system.  If a WTO Member were allowed to continue the 
application of suspension of concessions without  challenging the implementing measure, it would 
necessarily have to base its assessment on a unilatera l determination of the WT O inconsistency of the 
new measure.  This would be in plain contradiction to Article 23.2(a), in c onjunction with Article 21.5 
of the DSU, as explained above. 
4.48 The scenario described above follows the same ratio legis  that applies for the initial 
imposition of suspension of concessions or other oblig ations.  Thus, whether a Member suspends for 
the first time concessions or other obligations or  wishes to maintain th e suspension despite an 
implementation act does not make a difference.  In both cases, a Member must not substitute 
unilaterally its assessment of a WTO inconsistency of an implementation measure to the procedures 
under the DSU.  WT/DS321/R 
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  4.49 In the case of the initial imposition of suspensi on of concessions or other obligations, the 
DSU implies first a determination that the Me mber concerned has not implemented the DSB 
recommendations and rulings. The DSB would not au thorize the suspension of concessions or other 
obligations, if a WTO Member has taken implementing measures.  It is established practice that the Member which intends to suspend concessions or other obligations first obtains a DSB decision 
regarding the insufficiency of the implementi ng measure following an Article 21.5 of the DSU 
proceeding.  This normal course of events and lega l steps in the case of the imposition of suspension 
of concessions or other obligations is in full accordance with the overarching principle set out in 
Article 23 of the DSU prohibiting Members from ma king unilateral determin ations that another 
Member has violated its obligations. 
4.50 Regarding the question of the conditions under wh ich the suspension of concessions or other 
obligations could be maintained,  there is no reason to assume that this fundamental logic should 
change in any way whatsoever.  In fact, the le gal situation is identical where the implementing 
Member has taken the necessary measures to comply with its WTO obligations in accordance with its 
internal rules and procedures and notifie d the measures in question to the WTO. 
4.51 This comparability is even more striking if one focuses on the timing of an implementation 
measure.  In the case of the initial imposition  of the suspension of concessions or other obligations, a 
WTO Member has not implemented its obligations before  the DSB's authorization to suspend 
concessions or other obligations.  In the case of the maintenance  of suspension of concessions or other 
obligations, a WTO Member implements its obligations after the DSB's authorization to suspend 
concessions or other obligations.  This difference in timing, however, does not alter the normal legal 
sequencing between the multilateral review of th e compliance measure and the application of 
suspension of concessions or other obl igations.  Indeed, the sole diff erence in timing does not give the 
retaliating Member all of a sudden the substantive right to make unilateral  decisions as to whether or 
not the implementing measure is appropriate and suffici ent and, if it is not considered sufficient, to 
continue applying the countermeasu res as if nothing had happened. 
4.52 In light of the above, there is an absolute need to refrain from continuing to apply the 
suspension of concessions or othe r obligations in cases where the retaliating Member has not properly 
challenged the compliance measure in an Article 21.5 proceeding.  In fact, if a Member were allowed 
to maintain the suspension of concessions or other ob ligations even in such a new legal situation, it 
could make the kind of unilateral determinations which Article 23 sp ecifically outlaws.  Also, it could 
continue to apply the suspension of concessions or other obligations even if the WTO violation has 
been objectively removed.  The implementing Member  would then have to suffer from the suspension 
of concessions or other obligations even though it has fully abided by its obligations.  It goes without 
saying that such a result would be in plain contradiction to the DSU provisions governing the 
suspension of concessions or other obligati ons, in particular Articles 3.7 and 22. 
4.53 These fundamental principles are not altered by th e fact that there exists a DSB authorization 
under Article 22.7 of the DSU to suspend concessions  or other obligations.  The DSB authorization 
cannot change the fundamental rul es under the DSU. Rather, the DSB implements these rules.  Thus, 
as the DSU provides that the susp ension of concessions or other ob ligations should not be applied 
unless a WTO violation by a Member's measure has been properly established, the DSB authorization 
cannot be interpreted to justify such a suspension if a WTO violation of a Member's (new) measures 
has not been properly determined. 
4.54 The basis for a DSB authorization to suspend concessions or other obligations is a prior 
multilateral  determination that the implementing WTO Member has failed to comply with its 
obligations.  This is the case if an Article 21.5 proceeding concludes that the implementing measure 
was insufficient.  This is also implicitly the case if a Member has not adopted any implementing 
measure at all at the time of the DSB decision under Article 22.7 of the DSU.  On the contrary, if a WT/DS321/R 
Page 14 
 
 
  WTO Member implements properly its obligations after the DSB has authorized the suspension of 
concessions or other obligations the basis for this decision changes fundamentally.  As the original 
DSB authorization was taken in view of the origin al measure, it cannot logically encompass the new 
implementing measure.  Hence, the DSB authorizati on cannot cover the continued application of the 
suspension of concessions or other obligations, if  a WTO Member subsequently implements its 
obligations in the absence of a multilateral review regarding the compliance (or not) of this new 
measure. 
4.55 Regarding this DSB authorization it is once again useful to compare the two situations of the 
imposition  and the maintenance  of the suspension of concessions or other obligations.  The DSB 
could not authorize the imposition of retaliatory measures under Article 22.7 of the DSU, if the 
implementing Member had undertaken measures to comp ly with its obligations and if those had not 
been found WTO inconsistent following an Article 21. 5 proceeding.  In the very same vein, the DSB 
authorization cannot justify the maintenance of su spension of concessions or other obligations if a 
Member properly complies with its obligations af ter the imposition of these measures and if its 
compliance measure is not challenged in an Article  21.5 proceeding.  Again, the mere temporal 
difference of the new implementing measure does not mean that the DSB authorization, once 
received, serves as a blank authorization for a Member  to continue the application of the suspension 
of concessions or other obligations indefinitely in the future and on the basis of unilateral 
determinations. 
4.56 Furthermore, the European Communities would note that, from a systemic point of view, 
Article 22.8 of the DSU is subsequent to Article 22.7 of the DSU. This indicates that once the situation under Paragraph 8 occurs it overtak es the authorization granted under Paragraph 7. 
Paragraph 8 conditions Pa ragraph 7.  As it must be assumed that the DSU negotiators followed a 
logical sequencing in the way they drafted Article 22, it is clear that Article 22.8 of the DSU was 
supposed to impact on the authorization under Article  22.7 of the DSU.  Indeed, to assume that the 
removal of the inconsistency of the measure under Paragraph 8 has no impact on the DSB 
authorization under Paragraph 7 is not  legally coherent or reasonable. 
4.57 Moreover, this reading of the DSB authorization is corroborated if one takes a closer look at 
the substance of this authorization. The level of nu llification or impairment has to be determined in 
relation to the violation determined for the existing measure (Article 3.8 of the DSU).  Thus, assuming 
that a WTO Member has not undertaken any implemen tation steps, the level of nullification should be 
determined in relation to the original violation.   But assuming, in a second scenario, that a Member 
has implemented partly or fully its WTO obligations , the level of nullification or impairment would 
have to be determined accordingl y.  Obviously, in the area where the Member implemented properly 
its obligations there would be no nullification or im pairment.  This logic had also been recognized by 
the arbitrators in EC – Bananas III (US) (Article 22.6 – EC).  
4.58 Applying the same reasoning in the present case, it is clear that the level of suspension of 
concessions or other obligations as authorized by the DSB was based on a non-implementation by the European Communities.  However, this level and, th erefore, the scope of the authorization may not be 
justified any longer once the European Commun ities has properly implemented its obligations. 
4.59 Finally, following the jurisprudence by the Appellate Body, once a Member violates 
Article 23.1 read in conjunction with Article 22.8 of the DSU, it necessarily also acts contrary to Article 3.7 of the DSU.  WT/DS321/R 
 Page 15 
 
 
  (e) Canada is in violation of Article I:1 of th e GATT1994 because of the continued suspension of 
concessions and related obligations 
4.60 Canada is acting inconsistently with Articl e I:1 of the GATT 1994 by imposing import duties 
in excess of bound rates on products origin ating in certain EC Member States. 
(f) Canada is acting inconsistently  with Article II of the GATT 1994 by the continued application 
of countermeasures on products originating in the European Communities. 
4.61 Canada is violating its obligations under Artic le II:1(a) and Article II:1(b) of the GATT by 
suspending concessions and related obligati ons against the European Communities. 
4. Legal arguments:  Part II – Conditional clai m in the event that the Panel does not find 
any violation of Article 23 of the DSU as set out in Part I 
(a) Canada is violating Article 22.8 of the DSU b ecause the measure found to  be inconsistent has 
been removed by the European Communities 
4.62 Canada is violating Article 22.8 of the DSU by  continuing to suspend concessions and related 
obligations even though the measure found to be inconsistent has been removed. Consequently, 
Canada is under an obligation  not to apply the suspension of con cessions any longer. In the following, 
the European Communities will set out in more deta il why the new measure is not only in presumed 
compliance as argued above but in actual complian ce with the recommendations and rulings of the 
DSB. 
4.63 The rulings of both the Panel and the Appellate Body had essentially turned on the reading of 
Article 5.1 of the SPS Agreement , and in particular, the requirement that a measure be based on a risk 
assessment.  The Appellate Body upheld the Panel's finding that the EC measures at issue were inconsistent with the requirements of Article 5.1 of the SPS Agreement .  At the same time, the report 
contains an important clarification as to how th e European Communities could bring its regime for 
hormones-treated meat in accordance with its oblig ations under the covered agreements.  As seen 
above in relation to Part I, the Appellate Body held "that Article 5.1, read in conjunction with 
Article 2.2, requires that the results of the risk  assessment must sufficiently warrant the SPS measure 
at stake." 
4.64 On the basis of the scientific data presented by the European Communities, the Appellate 
Body found that that data did not sufficiently wa rrant or reasonably suppor t the import prohibition. 
The Appellate Body found, in pa rticular, that the scientific reports and studies submitted by the 
European Communities did not rationally support the EC import prohibition or were too general, i.e. 
relevant but not sufficiently specific to the case.  It  is important to understand, therefore, that the 
Appellate Body did not find that an import pr ohibition for beef from hormone treated cattle was per se  
in violation of the SPS Agreement.   Rather it found that the EC import prohibition was not sufficiently 
warranted, that is to say reasonably supported, by the specific risk assessment relied upon at that time 
by the European Communities. 
4.65 In order to comply with the above findings the European Communities conducted a 
comprehensive risk assessment.  The risk assessment focussed on potential risks to human health from 
hormone residues in bovine meat and meat products, in particular such risks arising from residues of 
the six hormonal substances (oestradiol-17 β, testosterone, progesterone, trenbolone acetate, zeranol 
and melengestrol acetate).  In carrying out the ri sk assessment, the European Communities initiated 
and during 1998-1999 funded altogether 17 specific scientific studies and research projects in order to 
obtain as much as possible of the missing scientific information as identified in the above rulings.  
Moreover, the European Communities addressed in  1998 specific requests for the submission of WT/DS321/R 
Page 16 
 
 
  scientific data  to the United States, Canada, Aust ralia and New Zealand which all authorize the use of 
these six hormones for animal growth promotion.  It also published an open call for documentation 
requesting any interested party, including the indu stry, to provide any relevant and recent scientific 
data and information in their possession to be taken into account in the complementary risk 
assessment. 
4.66 The data collected was submitted to the Scientific Committee on Veterinary Measures relating 
to Public Health (SCVPH), an independent expert Committe e established under EC legislation to 
evaluate this kind of substances on the EC legal sy stem.  This scientific body was the one responsible 
for scientific and technical questions concerning  consumer health and food safety related to 
production, processing and supply of food of animal origin.  The SCVPH reviewed all the old and 
new data and issued its opinion on 30 April 1999, wh ich it reviewed and confirmed again in 2000 and 
once more in 2002 on the basis of additional and new information submitted subsequently. 
4.67 Based on this comprehensive risk assess ment, the European Communities adopted 
Directive 2003/74/EC.  In accordance with the above scientific conclusions the Directive provides for 
a definite import prohibition on meat and meat pr oducts from animals treated for growth promotion 
purposes with oestradiol-17 β.  Furthermore, on the basis of the available but still incomplete data, the 
Directive provides for a provisional ban on meat an d meat products from animals treated for growth 
promotion purposes with testosterone, progesterone , trenbolone acetate, zeranol and melengestrol 
acetate.  The Directive provides for an obligation on the Commission to seek more complete scientific 
information from any source which c ould shed light and clar ify gaps in the present state of knowledge 
on these substances. 
4.68 Article 22.8 of the DSU  obliges Canada to cease applying the suspension of concessions, 
once an inconsistent measure has been removed. However, even though the inconsistent measure has 
been removed, Canada continues to apply the susp ension of concessions.  Canada, therefore, is in 
violation of Article 22.8 of the DSU. 
(b) Canada is in violation of Articles I a nd II of the GATT 1994 following the continued 
application of suspension of Concessions 
4.69 The illegal continued suspension of concessions an d related obligations automatically entails 
a violation of Articles I and II of the GATT 1994.  This has been explained above to which the 
European Communities would refer to. 
D. FIRST WRITTEN SUBMISSION OF CANADA  
1. Introduction 
4.70 This case involves three issues. First, it is about whether the DSB authorization permitting 
Canada to suspend concessions with respect to the EC  – in response to the EC's  failure to comply 
with the recommendations and rulings of the DSB in the EC – Hormones dispute – remains in effect. 
Second, it is about whether the EC bears the burden of demonstrating that it has complied with those 
recommendations and rulings in order to have the DS B authorization terminated.  And third, it is 
about whether the EC has actually complied with those recommendations and rulings.  The first two 
issues must be answered in the affirmative; the third issue must be answered in the negative. 
2. Background to the dispute  
4.71 The EC has had in place since the 1980s a ban on the importation of meat and meat products 
derived from cattle treated with any of six growth-promoting hormones. In the EC – Hormones  
dispute, the DSB ruled that EC legislation implementing the ban ( i.e. Directive 96/22/EC) was not  WT/DS321/R 
 Page 17 
 
 
  based on a risk assessment as required by the SPS Agreement.  The DSB, in February 1998, 
recommended that the EC bring its measure into compliance and was subsequently granted fifteen 
months to do so.  The EC failed to comply within  that time and as a result the DSB, in July 1999, 
authorized Canada to suspend concessions to the EC  to the amount of Can$11.3 million.  On the basis 
of that authorization, Canada adopted the European Union Surtax Order , a measure which remains 
unchanged and in force to this day. 
4.72 After having been found non-compliant in the EC – Hormones  dispute, the EC commissioned 
a series of scientific studies and mandated th e SCVPH to review these studies along with other 
available scientific evidence. The SCVPH produced three opinions, in which it concluded that a "risk 
to the consumer has been identified with different levels of conclusive evidence for the 6 hormones in 
question." The opinions concluded that oestradiol-17 β is a "complete carcinogen", that the current 
state of knowledge does not allow a quantitative estimat e of the risk for the other five hormones, and 
that no ADI could be established for any of the six hormones. 
4.73 On the basis of the three SCVPH opinions, the EC adopted Directive 2003/74/EC in 
September 2003.  This Directive simply am ended Directive 96/22/EC by making the ban on 
oestradiol-17 β permanent, on the ground that it was now based on a risk assessment, and by making 
the ban on the other five substan ces provisional, on the ground that  there was insufficient information 
to complete a proper risk assessment. 
4.74 Upon notifying its amended Directive to the DSB, the EC stated that it considered itself in 
compliance with the recommendations and rulings in the EC – Hormones dispute and, as a result, 
Canada's suspension of concessions was no longer jus tified.  Canada responded that it was for the EC 
to obtain multilateral confirmation of its claim of compliance, and explained that Canada's continued 
suspension of concessions was pursuan t to the original and continuing  DSB authorization.  Canada 
further questioned how the EC's no tification to the DSB of its unilateral assertion of compliance could 
terminate Canada's multilateral authorization. 
4.75 The EC did not initiate WTO compliance pro ceeding or otherwise seek confirmation from the 
DSB of the compliance of its measure.  Instead, it re quested the establishment of this Panel, alleging 
that it was Canada's continued suspension of concessi ons that was inconsistent with Articles I and II 
of GATT 1994 and Articles 23.1, 23.2(a) and (c), 3.7, 22.8 and 21.5 of the DSU. 
3. Legal arguments  
4.76 This dispute concerns the respective rights and obligations under the DSU of the EC and 
Canada in the context of Canada 's adoption of WTO-authorized suspension of concessions to the EC. 
This dispute also concerns the obligations of the EC under the SPS Agreement , in particular, whether 
the EC has actually complied with the recomme ndations and rulings of the DSB in  the EC – 
Hormones  disputes. 
(a) Canada has not acted inconsistently with Articles 22.8 and 3.7 of the DSU 
4.77 In alleging that Canada has acted  inconsistently with Articles 22.8 and 3.7 of the DSU, the EC 
fails to acknowledge that: 1) the DSB author ization permitting Canada to suspend concessions 
remains in effect; 2) it is the EC, and not Canada, that now bears the burden of demonstrating that its 
measure now complies; and 3) the EC measure does not benefit from a presumption of compliance in 
these circumstances. WT/DS321/R 
Page 18 
 
 
  (i) The DSB authorization remains in effect 
4.78 The EC's claim that its unilateral assertion of its own compliance has resulted in the automatic 
termination of Canada's authorization to suspend concessions must fail.  That authorization remains 
unchanged and in effect to this day.  The EC rema ins subject to an ongoing obligation to comply with 
its WTO obligations.  Moreover, the EC – Hormones dispute has remained at all times under the 
surveillance of the DSB, including the EC's ob ligation to comply as well as the suspension of 
concessions by Canada that was authorized to induce this compliance. 
4.79 Canada's measure is therefore by definition WTO consistent and only the DSB can terminate 
the authorization of that measure.  Any mechanism for terminating the authorization that is not under 
the authority and surveillance of the DSB undermines the ability of the dispute settlement system to 
achieve one of its central objectives, that of ensuri ng the security and predictability of the multilateral 
trading system. 
(ii) The EC bears the burden of demonstrating its compliance 
4.80 It is the EC, and not Canada, that bears the bur den of demonstrating that it has complied with 
the recommendations and rulings of the DSB.  As explicitly recognized by the panel in US – Certain 
EC Products , this proposition flows from the general rules on burden of proof.  That is, since it is the 
EC that seeks to have Canada's authorized and WTO- consistent measure "de-authorized", it is the EC 
that bears the burden of demonstrating that the me asure should no longer be authorized on the basis of 
the actual compliance of its own measure. 
4.81 It is therefore incumbent upon the EC to avail itself of the avenues available to it under the 
DSU to demonstrate that it has complied with the recommendations and rulings of the DSB, with a 
view to having the DSB authorization revoked.  Th e EC may have recourse to proceedings initiated 
under Article 21.5 or it may initiate new proceedings in which it requests the Panel to deliver findings 
on the actual compliance of the EC measure.  Under either scenario, Canada's continued suspension of 
concessions remains WTO-authorized, WTO-consiste nt and unchallengeable until such time as the 
EC successfully demonstrates the compliance of  its own measure, and consequently the DSB 
terminates the authorization concerned. 
(iii) The EC measure does not benefit fr om a presumption of compliance 
4.82 Relying upon an unfo unded assertion that its measure benefits from a presumption of 
compliance, the EC claims that it has satisfied the first condition of Article 22.8 of the DSU by 
"removing" its measure.  As a result, according to the EC, the temporary period provided for in 
Article 22.8 has passed and Canada's DSB authoriza tion has been automatically terminated.  Canada 
does not challenge the existence and correctne ss of a presumption of good faith in many 
circumstances, nor does it disagree that authori zed suspension of concessions is meant to be 
temporary.  However, neither of these principles is relevant in the circumstances of this dispute. 
4.83 Underlying this dispute is neither an EC measure  taken as part of its day-to-day business of 
governing, nor one that the EC has taken to comply  prior to the adoption of DSB authorization to 
suspend concessions.  Rather, this di spute concerns the failure of the EC to correct a measure that had 
been found by the DSB to be inconsistent with the EC's WTO obligations, and as a result the DSB 
authorized Canada to suspend concessions.  The ex istence of DSB authorization, and the adoption by 
Canada of a measure based on that authorizati on, distinguishes this case from those situations in 
which a presumption of compliance might apply to the EC measure. 
4.84 The DSU does not explicitly address how a DSB authorization of suspension of concessions, 
once granted, is to be terminated.  What is clear is that the EC's unilateral claim of compliance cannot,  WT/DS321/R 
 Page 19 
 
 
  in itself, terminate that authorization.  Any presu med compliance the EC measure might enjoy prior to 
the adoption of the DSB authorization must yield to the actual compliance of Canada's WTO–
authorized measure.  Any other interpretation of  the DSU would undermine the objective of the 
dispute settlement system to ensure the security an d predictability of the multilateral trading system.  
4.85 If the EC's claims were to be accepted, both meritorious and purely illusory claims of 
compliance would result in the immediate terminat ion of the suspension of concessions, even if the 
assertions of compliance were patently unreasonabl e.  An otherwise WTO-consistent measure ( i.e. 
suspending concessions) of one Member would be au tomatically rendered WTO-inconsistent by the 
simple adoption and notification of a "complian ce measure" by another Member.  The self-proclaimed 
"complying" Member could buy itself considerable periods of relief through the announcement of a 
measure that barely differed from the one originally  found to be non-compliant.  This scenario would 
clearly not contribute to the objectives of inducing prompt compliance and ensuring the security and 
predictability of the multilateral trading system. 
4.86 The EC's claims under Article 3.7 of the DSU – which are coincidental to its claims under 
Article 22.8 – also fail as Canada has demonstrat ed that it has not acted inconsistently with 
Article 22.8. 
(b) Canada has not acted inconsistently with Articles 23.1, 23.2(a) and 21.5 of the DSU 
4.87 The EC also claims that: 1) Canada is seeki ng to redress a perceived WTO violation without 
recourse to the rules and procedures of the DSU, cont rary to Article 23.1 of the DSU; 2) Canada has 
made a unilateral determ ination that the EC's current measure is not in compliance with the 
recommendation and rulings of the DSB, contrary to  Article 23.2(a) of the DSU; and 3) Canada's 
failure to initiate compliance proceedings to dete rmine the WTO consistency of the EC's current 
measure is contrary to Article 21.5 of the DSU. These claims are unsustainable. 
(i) Canada is not seeking redress of a perceived WTO violation 
4.88 The EC's claim that Canada has sought to re dress a perceived violation without recourse to 
the rules and procedures of the DSU is based on a misunderstanding of the basis for Canada's 
continued suspension of concessions.  The panel in EC – Commercial Vessels found that a necessary 
precondition to the application of Article 23 of the DSU is that a Member must be acting in response 
to the perceived WTO-inconsistent behaviour of an other Member.  In the circumstances before this 
Panel, Canada is not seeking the redress of a pe rceived WTO violation; it has already sought and 
obtained redress pursuant to the rules and procedures of the DSU.  
4.89 In the EC – Hormones  dispute, Canada sought and obtai ned DSB authorization to suspend 
concessions to the EC after the EC failed to br ing itself into compliance with the recommendations 
and rulings of the DSB within the reasonable pe riod of time. Canada's impugned measures were 
adopted and continue to be applied pursuant to this  validly obtained authorization from the DSB, and 
not on the basis of any views it has subsequently de veloped on the consistency of the EC's current 
measure.  In other words, Canada's assessment of the consistency of the EC's current measure is unrelated to, and irrelevant to, Canada 's continued suspension of concessions. 
(ii) Canada has not made a unilateral determination 
4.90 The EC is simply wrong to suggest that Canada's continued suspension of concessions 
necessarily implies that it has made a unilateral de termination that the EC measure does not comply. 
According to the text of Article 23.2 it self, as well as the Appellate Body in 
US – Certain EC 
Products,  that provision simply sets out certain specifi c and clearly-defined forms of unilateral action WT/DS321/R 
Page 20 
 
 
  already prohibited "in such cases" covered by Article  23.1.  Since Canada is not seeking to redress a 
perceived violation, it cannot be said to have made a unilate ral determination. 
4.91 Moreover, the panel in US – Section 301 Trade Act  found that a "determination" can only 
occur subsequent to a Member having decided that , in its preliminary view, there may be a WTO 
inconsistency.  Mere opini ons or views expressed before that stag e is reached are not intended to be 
covered by Article 23.2(a).  In the circumstances in  this dispute Canada has not passed this threshold 
of having made a "determination" regarding the EC's current measure. 
4.92 In support of its allegations that Canada has made such a determination, the EC has 
incorrectly interpreted statements made by Cana da in the DSB.  The reality is that Canada 
consistently stated that it is the EC's responsib ility to establish that it has complied with the DSB's 
recommendations and rulings, and as result ther e was no reason for Canada to initiate WTO 
procedures or to take any other action.  The view s that Canada expressed on the WTO consistency of 
the EC's current measure are unrelated to, and irre levant to, its continued suspension of concessions. 
(iii) Canada has no obligation to in itiate compliance proceedings 
4.93 The EC's allegations that Canada was under an  obligation to initiate compliance proceedings 
under Article 21.5 of the DSU must also fail, as these allegations are based on unfounded assertions 
that Canada is seeking redress of violation and that  it has made a unilateral determination.  The 
mechanism of Article 21.5 was available to either party to obtain a determination as to whether the 
EC's measure is in compliance.  However, it is th e responsibility of the EC to avail itself of this 
procedure if it wishes to have the ongoing DSB authorization terminated. 
4.94 The EC's own failure to initiating proceedi ngs under Article 21.5 of the DSU is not a 
legitimate basis for a claim that Canada acted unilaterally by not initiating such proceedings.  Nor 
does it absolve the EC of its responsibility to demons trate that it has brought itself into compliance. 
The EC's interpretation of the DSU on this point, we re it to prevail, would negate a WTO Member's 
right to rely on a validly obtained DSB authori zation to suspend concessions and would seriously 
undermine the proper functioning of the dispute settlement system in the WTO.  Furthermore, the DSU cannot be interpreted to compel a Member to initiate proceedings to challenge another Member's 
measures.  
4.95 The EC also incorrectly considers Canada's submission in US – Section 301 Trade Act  as 
contradicting its position in these proceedings.  Th e circumstances on which Canada was commenting 
in that case were very different from those before  this Panel.  That dispute concerned a US law 
allowing the US to impose retaliatory measures wit hout having obtained multilateral authorization for 
such measures.  Canada agrees that WTO Memb ers should have recourse to the WTO dispute 
settlement system rather than their own unilatera l determinations.  In the current case, however, 
Canada's measure has been adopt ed pursuant to DSB authorization and the EC's unilateral and 
unconfirmed declaration of compliance cannot creat e a positive obligation for Canada to initiate 
proceedings under Article 21.5 of the DSU. 
(c) The EC has failed to demonstrate its complian ce with the recommendations and rulings of the 
DSB in EC – Hormones  
4.96 Canada has demonstrated that the EC measure does not benefit from a presumption of 
compliance in these circumstances and that the EC bears the burden of demonstrating that it actually 
complies.  It has failed to do so.  What the EC has put forward in respect of its own measure is three 
paragraphs from the recitals of Directive 2003/74/EC  that summarize the conc lusions of the SCVPH. 
This falls far short of a prima facie case of co mpliance with the recommendations and rulings of the 
DSB in EC – Hormones .   WT/DS321/R 
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  4.97 The Appellate Body in US – Gambling  found that a prima facie  case must be based on 
"evidence and legal argument" put forward by the party making a claim.  It is insufficient therefore 
for the EC to simply submit limited evidence and exp ect the Panel to divine from it the EC's claim of 
compliance.  Nor can the EC simply allege facts without relating them to arguments about how they 
demonstrate compliance.  When one assesses the EC 's three paragraphs in the light of criteria 
established by the Appellate Body, it is clear that the EC has failed to establish even a prima facie 
case of compliance. 
(d) Arguments and evidence concerning the non-compliance of the EC measure 
4.98 The Panel should dismiss this case on the grounds that the EC has failed to make its case in 
respect of allegations that Canada has acted inc onsistently with the DSU.  Canada is nonetheless 
prepared to elaborate on arguments and scientific ev idence that the EC measure does not comply with 
the recommendations and rulings of the DSB in EC – Hormones , an issue the EC is trying to avoid. 
(i) The EC's permanent ban on oestradiol-17 β is not based on a risk assessment 
4.99 The EC has not met either of the two conditions  required to demonstrate that its permanent 
ban on oestradiol-17 β is based on a risk assessment.  The EC must demonstrate that the SCVPH 
Opinions constitute a "risk assessment" and that the EC measure banning the use of oestradiol-17 β for 
growth-promotion purposes is "based on" that risk assessment.  
(e) The SCVPH Opinions do not constitute a risk assessment 
4.100  With respect to the first condition, the Appellate Body in EC – Hormones  set out a two-step 
process that the SCVPH Opinions must follow to be  considered a risk assessment for the purposes of 
the SPS Agreement .  The SCVPH Opinions must first identify the adverse effects on human health (if 
any) arising from the presence of the six hormones wh en used as growth promotants in meat and then, 
if any such adverse effects exist, they must evalua te the potential occurrence of these effects.  They do 
neither. 
4.101  First, the SCVPH opinions do not identify any adverse effects on human health that arise 
from the consumption of meat containing residues of oestradiol-17 β that has been used as a growth 
promotant. The SCVPH opinions identify only in a speculative fashion potential adverse effects of 
oestradiol-17 β in general, a substance available fro m many sources both internal (endogenous) and 
external (exogenous) to the human body.  
4.102  None of the potential adverse effects identified by  the SCVPH were said to arise specifically 
from the consumption of meat containing residues of oestradiol-17 β when used as a growth 
promotant.  In fact, the SCVPH specifically acknowle dges the absence of such a link.  As a result of 
the speculative nature of the identification of potentia l adverse effects in general and the absence of a 
specific link between such effects and the use of hormone growth promotants in particular, the 
SCVPH opinions cannot be seen to satisfy the firs t step in the conduct of a "risk assessment". 
4.103  Second, the SCVPH Opinions do not evaluate th e potential occurrence of the adverse effects 
they purport to identify.  The three SCVPH opinions simply point to general concerns about possible adverse effects of oestradiol-17 β, and do not evaluate the potential occurrence of such effects as a 
result of consumption of meat derived from horm one-treated animals.  Moreover, the SCVPH has 
failed to conduct even the minimum steps of such an evaluation. 
4.104  The Appellate Body found in EC – Hormones  that the scientific evidence considered in a risk 
assessment had to be "sufficiently specific" to the substance at issue.  Even those potential adverse 
effects that it does identify the SC VPH does not evaluate in a manner that is sufficiently specific to WT/DS321/R 
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  the substances at issue, and as such the SCVPH ha s not completed the second step required of a risk 
assessment. 
(f) The EC measure is not based on a risk assessment 
4.105  With respect to the second condition, the EC measu re is not based on a risk assessment. Since 
the EC has not even conducted a proper risk assessm ent, the measure cannot be said to be "based on" 
a risk assessment.  However, ev en if the SCVPH opinions are considered to constitute a risk 
assessment, the EC still fails to satisfy this cond ition as its measure is not "based on" that risk 
assessment. 
4.106  The Appellate Body in EC – Hormones  found that the results of the risk assessment must 
"sufficiently warrant" an SPS measure, and there mu st be a "rational relationship" between the 
measure and the risk assessment.  In order to satisfy  this test, the EC must demonstrate that the 
conclusions of its so-called risk assessment (that oestradiol-17 β in general may have adverse effects) 
sufficiently warrant the conclusions underlying  its measure (that residues of oestradiol-17 β consumed 
from meat derived from animals treated for growth-promoting purposes have adverse effects). 
4.107  All that the SCVPH has arguably identified are some potential adverse e ffects associated with 
oestradiol-17 β per se . It has not demonstrated that these adverse effects occur as a result of 
consumption of the quantity of oestradiol-17 β that would be present in meat derived from treated 
animals.  Even if the conclusions on the adverse effects of oestradiol-17 β were correct, the rational 
response would be to ban oestradiol-17 β, or at least to inform consumers of its various sources and the 
actions they should take to minimize exposure.  The EC has instead chosen to respond to advice about the potential adverse effects of oestradiol-17 β from all sources by banning only meat from animals 
treated with oestradiol-17 β for certain purposes, while allowing others. 
4.108  In EC – Hormones,  the EC failed to convince either the panel or the Appellate Body that its 
measure – which was nearly identical to the presen t one – was "based on" on a risk assessment.  The 
evidence that the EC now relies on re mains as insufficient to establish a basis for its ban as it was in 
EC – Hormones. As a result, the conclusions of the SC VPH opinions do not support the conclusions 
underlying the measure, so the measure is not "based on" a risk assessment.  
(i) The EC's ban on the five other hormones is not a provisional measure 
4.109  The EC claims that its provisional ban on fi ve other hormones – testosterone, progesterone, 
TBA, zeranol and MGA – is jus tified under Article 5.7 of the SPS Agreement , on the ground that there 
is insufficient scientific knowledge to conduct a risk  assessment.  As the EC has failed to present any 
evidence in support of this claim, it must also  fail.  In fact, the EC expressly stated in EC – Hormones 
that its ban on these hormones was not a provisional measure in the sense of Article 5.7, presumably 
because it concluded that there was sufficient scienti fic information on which to base its measure at 
the time.  It strains credulity therefore for the EC to now assert, over seven years later, that the ban on 
these hormones is now being imposed on a "provisional" basis. 
4.110  The burden of proof rests on the party invoking Ar ticle 5.7 to justify its provisional measure 
to make a prima facie  case in support of that position.  The EC has failed to present any case 
whatsoever in support of its provisional ban, choosin g instead to merely cite Directive 2003/74/EC in 
support of its contention that its ban is a provisiona l measure.  Regardless of where the burden lies, 
there is ample evidence to suggest that the EC h as no grounds for justifying the ban on these five 
hormones on a provisional basis. 
4.111  In interpreting the obligations under Articles 2.2 and 5.7 of the SPS Agreement , the Appellate 
Body in Japan – Agricultural Products II  set out four cumulative requirements for a measure to be  WT/DS321/R 
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  justified as a provisional measure.  A measure ma y be justified as "provisional" where: (1) it is 
imposed in a situation where relevant scientific ev idence is insufficient; (2) it is adopted on the basis 
of available pertinent information; and such a prov isional measure may only be maintained where: (3) 
the Member seeks to obtain additional informati on necessary for a more objective assessment; and (4) 
the Member reviews the measure accordingly within a reasonable period of time. 
4.112  With respect to the sufficiency of the scien tific evidence, the body of scientific evidence 
relating to these five hormones is such that the EC  cannot plausibly argue that it is insufficient to 
conduct a proper assessment of risk.  The five hormon es have already been the subject of several risk 
assessments by reputable national regulatory agenci es and international expert scientific committees, 
such as JECFA.  In fact, the panel in EC – Hormones found that several scientific reports met the 
minimum requirements of a risk assessment. 
4.113  JECFA's studies of these five hormones reveal the breadth and depth of the available 
scientific evidence.  As early as 1981, JECFA eval uated the health effects of residue levels of 
progesterone and testosterone, concluding that resi dues from the use of these hormones according to 
good veterinary practices are unlikely to pose a hazard to human health.  After its most comprehensive evaluation in 1999, JECFA recomm ended ADI levels for these two hormones.  In 
2000, JECFA published residue and toxicological m onographs, in which it refe renced a large number 
of available studies dealing with progesterone and te stosterone.  Zeranol and TBA were considered by 
JECFA in 1982 and again in 1983.  JECFA ultimat ely recommended an ADI for zeranol in 1987 and 
one for TBA in 1989.  JECFA then turned its atte ntion to MGA in 2000 and again in 2004, at which 
time it recommended an ADI. 
4.114  In the light of the available scientif ic evidence on which JECFA has based it 
recommendations, it is clear that JECFA does not c onsider that residues of these hormones have an 
adverse effect on human health, provided they are used in accordance with good veterinary practices. 
Faced with this conclusion from JECFA, the EC cannot substantiate its assertion that there is 
insufficient scientific information to perform an ad equate risk assessment in respect of these five 
hormones. 
4.115  With respect to the availability of pertinen t information, the Panel would only need to 
consider this second requirement in the event that  it accepted that there is insufficient scientific 
evidence to allow the EC to conduc t an adequate risk assessment.  If the Panel proceeds to this stage, 
the requirement that a measure be adopted "on the basis" of available pertinent information requires 
that there be a rational relationship between the EC  measure and the available pertinent information. 
An objective analysis of the available pertinent info rmation regarding the health risks associated with 
residues of these hormones does not reasonably su pport the EC's ban on these five hormones. 
4.116  The EC's ban is inconsistent with the current  position of JECFA and Codex – an organization 
specifically recognized in the SPS Agreement  as an international standard-setting body – on the 
human safety of these hormones when used in acco rdance with good veterinary practices.  JECFA 
concluded that there was no need to specify numeric al MRLs for progesterone and testosterone when 
these substances are used in accordance with good veterinary practices.  JECFA recommended MRLs 
for zeranol, TBA and MGA in 1987, 1989 and 2004, r espectively.  For its part, Codex indicated in 
1995 that it was "unnecessary" to set numerical MRLs  for progesterone and testosterone.  It did set 
numerical MRLs for zeranol and TBA. 
4.117  Finally, with respect to the third and fourth requirements under Article 5.7 – the collection of 
additional information for a more objective assessment and review within a reasonable period of time 
– the EC has not demonstrated that it is co mplying with these obligations.  Although the EC 
Directive specifically indicates that the Commissi on shall seek additional information from all WT/DS321/R 
Page 24 
 
 
  possible sources, the EC has provided no evidence of its efforts to obtain the necessary information to 
conduct a proper risk assessment. 
(g) Canada has not acted inconsistently with Articles I and II of the GATT 1994 
4.118  Canada's suspension of obligations is authori zed by the DSB and therefore fully justified 
under the DSU.  Since the EC's claims under Articles I and II of the GATT 1994 are dependent on its DSU claims, these consequential claims must also fail. 
E. O
RAL STATEMENT OF THE EUROPEAN COMMUNITIES DURING THE FIRST SUBSTANTIVE 
MEETING  
1. Introduction 
4.119  The central provision on which the European Communities bases its claims is Article 23 of 
the DSU.  Article 23 requires WTO Members to have recourse to the procedures set out in the DSU  
instead of resorting to any kind of "self-help."  Article 23, in other words, prohibits a WTO Member 
from making itself the judge over other WTO Members.  What is and what is not a violation of the 
covered agreements and what one can do to re medy it, are to be determined multilaterally, not 
unilaterally. 
2. Seeking redress – Article 23.1 
4.120  As to Article 23.1 all parties seem to agree th at when, in 1999, the US and Canada requested, 
obtained and started using a DSB authorization to suspend concessions, they were seeking to redress a 
violation established at that time.  The parties di ffer on what the US and Canada are doing right now. 
One should think that they are still seeking redress.  After all, they are still applying their suspension 
of concessions stating explicitly that they fail to  see how the European Communities' implementation 
measure achieves compliance.  This can only mean that they still see a violation, especially given that 
Article 22.8 of the DSU would prohibit the con tinuation of sanctions in the opposite case. 
4.121  The defending parties, however, flatly deny that what they are doing right now is seeking 
redress of a violation against an alleged WTO-in consistency of the implementing measure.  The 
United States states that it "has already sought and obtained redress through the multilateral dispute settlement system for a violation found by the DSB. "  Canada not only uses th e same terms – "sought 
and obtained" – but also takes the trouble of under lining those words in its submission in order for 
everyone to understand the difference between the pr esent tense ("seeking"), in Article 23.1 DSU, and 
the past tense of "sought and obtained". That diffe rence seems obvious enough.  What is much less 
obvious, however, is how, by referring to the past, the defending parties want to explain what they are doing right now.  Applying sanctions is a form of seeking redress as the defending parties have admitted themselves.  They are currently applying sanctions – present tense, not past tense – so how 
could they not be seeking redress? 
4.122  They are not seeking redress, so the defending parties say, because they are acting under an 
authorization.  An authorization, however, can neither deny facts nor derogate from a Member's 
obligations outside its scope.  Thus, as regards specifi cally Article 23 of the DSU, it is clear that the 
mere existence of an authorization cannot simply do  away with the obligation to abide by the rules 
and procedures of the DSU, when a Member is seeking redress of a violation. 
3. Article 23.2(a) of the DSU in conjunction with Article 21.5 of the DSU 
4.123  As regards specifically the EC's claim under Ar ticle 23.2(a) in conjunction with Article 21.5 
the defending parties put forward a number of reas ons as to why there is no determination by them.  WT/DS321/R 
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  Interestingly enough, they hardly deal with one of the main points the European Communities has 
raised, namely that their "unilateral determination" can be inferred from the fact that they continue to 
apply sanctions unilaterally.  And how could it not be inferred from it?   It is inconceivable – and 
indeed would be even worse than what we are discussing now – if they did so without any good reason.  On the other hand, both spend considerab le time in their first written submissions explaining 
– in a rather defensive manner – that their public st atements do not constitute determinations, that they 
never alluded to a violation, that they have not  yet concluded on non-compliance, etc.  And finally, 
elsewhere in their submissions, they spend ev en more time explaining why the European 
Communities' implementing measure actu ally falls short of compliance. 
4.124  Whether or not a specific statement reaches – as Canada puts it – the "threshold" of a 
determination is one thing.  Yet,  another thing is if that statement is accompanied by conduct that 
severely affects the EC's trade.  We are not looking at statements made in abstracto  here.  A 
"determination" need not be pinned down to a speci fic statement in a specific form, it is the whole 
conduct a WTO Member is displaying that needs to be looked at. 
4.125  The defending parties further claim that they do not have an obligation under Article 21.5 of 
the DSU to launch compliance proceedings.  This Panel, however, is asked to find whether, under 
Article 23 of the DSU, in conjunction with Artic le 21.5, a Member has an obligation to launch a 
compliance procedure if and because it continues to  apply sanctions against another Member, even 
though there is a new implementing measure.  It is no t relevant for this dispute what obligations can 
be found directly in 21.5 in the absence of such unilateral conduct. 
4.126  Finally, the United States claims that there is  no obligation for the complaining parties to 
immediately  launch a compliance review.  In the present context and circumstances, with almost one 
and a half years that have passed after the a doption of the European Communities' implementing 
measure at the moment when this Panel was estab lished and with all the discussions that took place 
between the parties to this dispute regarding this  implementing measure, both before and after it was 
adopted, the question of how quickly a retaliating complainant must react to an implementing measure does not pose itself.  If anything, one could discuss the defendants' bad faith and their contradictory behaviour ( venire contra factum proprium).  
4. Article 23.1 in conjunction with Articles 22.8 and 3.7 of the DSU 
4.127  As regards the EC' claim under Article 23.1 in co njunction with Article 22.8, 3.7 of the DSU, 
the defending parties submit that the conditions of Article 22.8 are not fulfilled because the European 
Communities did not prove that it has "removed"  the inconsistency of the measure.  This 
argumentation overlooks the fact that dispute settlement proceedings are about a non-compliance 
review not a compliance review.  Indeed, in all di spute settlement proceedings that have ever been 
adopted by the DSB it was for a complaining Member to prove the WTO inconsistency of a measure 
by another Member.  This is explicitly confirmed by  Article 6 of the DSU, the provision under which 
panels are established. 
4.128  The defending parties ignore that the Europ ean Communities makes its systemic claim under 
Article 22.8, in conjunction with Article 23.1.   Thus, the Panel is called upon to decide whether or not 
the conditions under Article 22.8 are fulfilled in view of the prohibition under Article 23 to make 
unilateral determinations of non co mpliance.  It is not possible for the defending parties to contest the 
removal by the EC of the inconsistency of our ol d measure (Article 22.8), without making a unilateral 
determination under Article 23. 
4.129  Further, both defending parties submit that the European Communities cannot base itself on a 
presumption of good faith compliance.  The European Communities bases itself on the same rationale  
as the Appellate Body in the Byrd Amendment  case.  Thus, even though the defending parties allege WT/DS321/R 
Page 26 
 
 
  that the European Communities is still in violation of the SPS Agreement , this does not in any event 
affect the presumption of good faith.  As the Appella te Body has made clear, these are two completely 
different questions. 
4.130  The defending parties claim that there is a reversed burden of proof in a compliance case. 
Contrary to what Canada believes, a reversal of  presumption can also not be deduced from the DSB 
authorization granted in 1999.  The DSB authorizati on is limited to giving a Member the right to 
apply sanctions.  However, it does not go further than that.  The DSB authorization cannot reverse the 
normal rules which apply for subsequent implementing measures. 
4.131  If Canada's criterion of a "day-to-day busin ess" conduct for the presumption of good faith 
should bear any relevance at all, the European Co mmunities considers that in  the present case it even 
supports the EC' reliance on goo d faith.  Indeed, the European Communities prepared the 
implementation of the DSB recommendations and ruli ngs with extraordinary carefulness.  During the 
compliance process, the European Communities has made every effort to analyse the relevant 
scientific evidence in full transparen cy and with an open mind.  All st akeholders – whether inside or 
outside the European Communities – had at every mome nt in time the opportunity to submit relevant 
information and to intervene in the whole process. 
4.132  It is therefore also absurd, and indeed puts the reality on its head, to maintain that the 
European Communities in this case s eeks to end the sanctions on the basis of a "mere declaration of 
compliance", and that this could be done also just "a  week after" the DSB authorization.  It insinuates 
that the European Communities abu sed its rights and it just waives its hand to claim compliance.  In 
the light of the whole process, as just described, it is instead fully leg itimate for the European 
Communities to rely on the presumption of good faith for its compliance. 
4.133  As to the relevance of the DSB authorization fo r the continued application of sanctions in the 
context of Article 22.8, obviously, the defending parties and the European Communities have 
different views about the scope of the DSB authori zation.  For the United States and Canada, the DSB 
authorization operates like a sort of "absolut e justification" which makes every behaviour per se  WTO 
consistent, irrespective of any subsequent events  and compliance acts.  On the other hand, the 
European Communities considers that it is necess ary to put the DSB authorization in its proper 
context under the DSU. 
4.134  In this case, the DSB authorization has been granted under Article 22.7 following an 
arbitration procedure under Article 22.6 of the DSU.  The subject-matter of this Article 22.6 
arbitration was the level of nullification or impa irment caused by the original EC's Hormones 
legislation.  Thus, it is crucial to note that the ve ry basis of the DSB authorization has been the WTO-
inconsistency of the Member before  the authorization was granted.  On the other hand, the DSB 
authorization is not based on any (alleged) WTO in consistency of a compliance measure that has been 
adopted afterwards . 
4.135  What follows from this important and undisputab le fact is that, first of all, in case of a 
subsequent compliance that is properly adopted an d duly notified to the WTO, the basis on which the 
DSB has granted its authorization has fundamentally changed.  The DSB only granted the 
authorization to suspend concessions precisely b ecause a WTO Member had been found to be WTO 
inconsistent in the past and no implementation me asure was taken within the reasonable period of 
time.  The DSB's authorization was to induce co mpliance by the other Member and to rebalance 
temporarily the rights and obligations until the other Member has complied. 
4.136  Second, the DSB authorization is even more fundamentally changed in case of a subsequent 
compliance measure which has never been found WT O-inconsistent, because the defending parties do 
not dare to challenge it under Artic le 21.5.  In its first written submission, the European Communities  WT/DS321/R 
 Page 27 
 
 
  has referred to the "sequencing" discussion and pr actice of WTO Members in case of a compliance act 
before the DSB authorization is gr anted.  Quite remarkably, in the EC – Bananas III  dispute, the DSB 
Chairman explicitly stated that the sequencing of  a determination of compliance or non-compliance 
and the suspension of concessions should be treated in a "logical way forward".17 
4.137  As it happened, the logical way forward at the time was to assess first whether or not the 
compliance measure was sufficient before determini ng the nullification or impairment caused by the 
WTO-inconsistent measure.  In stark contrast to th is sequencing, the defendi ng parties consider now 
that the logical way forward is to continue to  apply sanctions even though the EC' compliance 
measure has not been challenged by them and not been found WTO-inconsistent.  And what is more, 
they even refuse to challenge th e EC' compliance measure pretending that this is not necessary since 
they have a DSB  authorization. 
4.138  But how can Canada and the United States know th at the European Communities is still not in 
compliance with its obligations?  They do so solely  on the basis of a unilateral determination of the 
EC' compliance measure which is in obvious contradi ction to Article 23 and Article 21.5 of the DSU. 
4.139  One might argue that the DSU is not explicit on this question.  However, the DSU contains 
several elements which indicate that the DSB aut horization can not serve as a blank cheque for the 
continuous application of the sanctions even afte r a subsequent compliance measure has been adopted 
and notified properly to the DSB. 
4.140  First, let us consider the wording of Article 22.8 of the DSU and what it does not say.  Even 
in case of a removal of the inconsistency of the measure, Article 22.8 does not say that the "DSB 
authorization ceases to apply".  Instead, it states  that the suspension of concessions or other 
obligations shall not "be applied" any longer.  Thus , Article 22.8 does not formally address the fate of 
the DSB authorization.  In an Article 22.8 situation it is, therefore, perfectly conceivable that although 
the DSB authorization is not formally  terminated or withdrawn, a WTO Member is not entitled to 
continue the application of suspension of concessions.  Furthermore, Article 22.8 does not say that the 
removal of the inconsistency or the termination of  the application of suspension requires whatever 
kind of DSB decision.  Rather, Article 22.8 is self-e xecuting.  The use of the word "shall" supports 
this interpretation, which does not give any marg in of manoeuvre and requires no additional acts. 
4.141  Second, contextually, Article 22.8 describes the next  procedural step in the course of a dispute 
after an authorization has been granted.  Article 22.8, therefore, provides for the next logical step. 
Consequently, once the inconsistency of the measure has been removed, the application of suspension 
of concessions or other obliga tions is no longer permitted. 
4.142  In addition, Article 22.8 should be interpreted in  the context of Article 23 of the DSU, which 
prohibits WTO Members from judging unilaterally the properly adopted and notified compliance 
measures of other WTO members.  According to the text, object, purpose and context of Articles 22.8 
and 23, the defending parties must seek a determ ination of non-compliance under the normal DSU 
procedures.  This general principle is not altered in whatever way under Article 22.8. 
4.143  Another contextual element which should be ta ken into account is Articles 3.7 and 22.1 of the 
DSU, which underline the exceptional and temporal nature of the application of suspension of 
concessions or other obligations.  Their exceptional and temporal nature effectively complements the 
principle of good faith.  In case of a properly adopted and notified compliance measure, the 
exceptional and temporal justifica tion of countermeasures is put into question. In the presence of a 
subsequent compliance measure, the "normal" s ituation revives and sanctions can no longer be 
applied as if nothing has changed. 
                                                      
17 Minutes of the DSB Meetings held on 25, 28 and 29 January and 1 February 1999, WT/DSB/M/54. WT/DS321/R 
Page 28 
 
 
  4.144  Canada tries to draw contextual support fo r its position from Article 3.2, emphasizing the 
security and predictability given by the DSB authori zation.  The "security and predictability" under 
Article 3.2, also applies to the WTO Member w ho properly implements its obligations.  Once this 
Member has removed the inconsistency of the meas ure it should have the reassurance that sanctions 
are no longer applied.  At a minimum, the implemen ting Member must have the reassurance that its 
measure is properly challenged under the DSU by th e retaliating Member, which does not agree with 
the compliance measure.  But even this, Canada  and the United States refuse to do despite the 
repeated requests by the Eur opean Communities to do so.  
4.145  The European Communities would also recall th e object and purpose of the trade sanctions, 
which is to induce compliance and to rebalance th e rights and obligations under the WTO agreements. 
However, both objectives require that a Member 's measure has been found first to be WTO-
inconsistent in accordance with the DSU rules.  And such a determina tion concerns logically not just 
any measure, but the measure that is currently in fo rce in the Member concerned.  Transposed in the 
present context, it means that Canada and the Un ited States cannot simply argue that the "old" 
measure has been found to be WTO- inconsistent in 1998.  This meas ure is not any longer in force, 
since the European Communities adopted and notified its compliance measure in 2003.  It is simply 
not rational and credible to argue that the obj ect and purpose of the suspension of concessions 
continues to exist, if its basic reason, i.e.  the old WTO-inconsistency, has disappeared. 
5. Concluding statement of the European Communities 
4.146  The EC believes that allowing public observation of the debate during this hearing has been 
very beneficial for the public’s understanding of  the dispute settlement process as well as this 
particular dispute.  The public observation has in no way hindered an efficient conduct of this hearing.  
On the contrary, the third parties have clearly be nefited from their observation of this hearing during 
the first two days for the purpose of their participation in this dispute.  
4.147  What we have heard from the defendants in the last few days is essentially that a retaliating 
Member has no obligation whatsoever under the DSU.   Instead, the retaliating Member may continue 
to apply sanctions until the authorization is "re voked" by the DSB.  The United States and Canada 
argue that by virtue of this authorization they  can simply lean back and see what the complying 
Member comes up with.  If eventually the complying Member adopts an implementation measure 
they do not even see a need to review it in due tim e.  Let me remind that in this case the United States 
and Canada claim that they have even after two y ears (and I should add after an additional three years 
of preparation) not made up their mind whether the EC’s measure is WTO consistent.  Indeed there 
seems to be no prospect that the United States and Canada will ever make up their minds.  Canada has 
stated that it would never make a determination about the EC’s new measures and the United States 
gave even less cause for reassurance stubbornly refusing ev en to agree that there is a disagreement.   
4.148  Whatever the defendants may mean by these statem ents, it is clear that the United States and 
Canada do not accept a responsibility to submit the EC ’s legislation to a multilateral review as it has 
been done in any other case by WTO Members wh ich ended in an adopted WTO decision.  And 
although they do not contest that the EC has acted in good faith, they do not even concede that the 
EC’s measure can benefit from a presumption of good faith compliance.  
4.149  This is a very easy going way for the United Stat es and Canada.  But it cannot be the correct 
one under the DSU. 
4.150  The EC would recall some essential points which had been discussed by the parties: 
4.151  First, the EC has advanced what would be the logi cal solution to this dispute, i.e. to follow its 
example in the US – FSC  case (launching Article 21.5 compliance procedure by original complaining  WT/DS321/R 
 Page 29 
 
 
  party, suspension of sanctions in the meantime).  Quite remarkably, the Un ited States fully agreed 
with this EC’ approach and considered it as "the appropriate solution" in the US – FSC  dispute.  Yet, 
the EC struggles to understand why in a reverse situ ation where the United States is retaliating, the 
United States does not follow this exam ple if it considers it as "appropriate". 
4.152  Second, there has been a lot of discussion about the presumption of good faith and the 
presumption of compliance, which is important fo r the EC claim under Article 22.8 and Article 23.1 
of the DSU.  Neither the United States nor Canada nor  any of the Third Parties have contested that the 
EC has adopted its compliance measure in good faith .  Yet, the United States and Canada refuse that 
the EC may rely on this principle in a "post-impl ementation" scenario.  The United States even wants 
to go as far as to say that the principle of good faith is not part of the DSU.  Obviously, this view is contrary to what the Appellate Body has constan tly ruled but also irreconcilable with general 
principles of public international law.  Moreover, when we asked Canada a bout the basis in the DSU 
of its assumption that an implementing Member faced with retaliation is not entitled to this 
presumption, it could not provide an y answer.  Indeed, this is so  because there is no basis for 
Canada’s theory.  
4.153  Third, during the proceeding we have heard a lot about the risks of an "endless loop of 
litigation" by a "mere declaration of compliance".  Ye t, as everybody agrees that the EC has adopted 
its compliance measure in good faith, it is clear that this "endless loop of litigation" does not arise in 
this dispute.  Indeed, such an endless loop scenar io presupposes a sort of scam measures notified by a 
WTO Member in bad faith.  This is not the case befo re us.  Indeed, even the EC would not consider 
that a "mere declaration of compliance" is sufficien t but what matters is that a Member complies with 
its obligations.  This is what the EC had actually d one in this case after a most thorough review of its 
measure involving a comprehensive review and assess ment of the available scientific evidence.  
4.154  There is a paradox about the approach of the defendants to the principle of good faith. They 
do not contest that the EC has acted in good faith but they argue that WTO Members in general cannot be expected to act in good faith.  They argue, Members with a duty to implement will adopt 
sham or scam measures to escape retaliation, it is argued that implementing Members must have the burden of proving their compliance.  The EC does not  believe that WTO Members act in bad faith.  
No Member wants to lose WTO disputes – and to do  so repeatedly and igno miniously.  There would 
be a high political cost.  Also, WTO Members are not  excessively litigious and do not gaily engage in 
endless loops of litigation.  This fear is unfounded.  But if this argument about bad faith is allowed, it 
can also be used the other way around – to argue th at the United States’ and Canada’s approach will 
lead to Members seeking and expl oiting retaliation rights for imprope r purposes.  Seeking redress of 
WTO violations must not be too difficult; and impl ementation and removal of retaliation must not be 
made subject to the often impossible task of provi ng a negative.  Retaliation rights should not become 
a new means of advancing unilateralist agendas. 
4.155  Fourth, when it comes to the DSB authorization, the United States and Canada argue that this 
may be revoked if the EC would launch a proceed ing under the DSU, be it Article 21.5, 22.8 or 
Article 25 etc. However, both defending parties cannot explain how this would even result in 
revocation of the DSB authorization. Well, Canada  argues that the DSB coul d probably eventually 
make a recommendation to itself to revoke the DSB authorization but there is absolutely no basis for this in the DSU.  And I am not talking about the pr ocedural implications which this could entail.  For 
instance – according to Canada – in an Article 21.5 proceeding brought by the EC against itself the 
burden of proof would be partly on the EC for the implementation of the original DSB 
recommendations and ruling.  On the other hand, Cana da could bring in its "defence" (in which they 
would complain about the WTO consistency of the measure) new claims for which it would bear the 
burden of proof.  And of course, Canada’s theo ry cannot even address the question on how these new 
claims could be reconciled with the more limited Panel request.  WT/DS321/R 
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  4.156  Finally, let me once stress again that the EC is  not seeking to avoid a proper examination of 
its compliance measures in the Hormones dispute.  We would be delighted if the United States and 
Canada would initiate an Article 21.5 dispute to morrow and would do all we can to facilitate and 
accelerate its conclusion.  However the United Stat es and Canada stubbornly refuse to take this 
logical – indeed appropriate – step.  It is they who have sought to avoid ha ving to confront the new 
EC measures and set out their objections to it in a manner in which the EC can properly respond.  
They have, it is true, started to set out – for the first time – their objections in their first written 
submissions.  The EC does not understand why they did not want to do this in a proper Article 21.5 
proceeding. 
4.157  We hope that we have assisted the Panel in its important task and look forward to helping the 
Panel in any further way that we can in the coming weeks. 
F. ORAL STATEMENT OF CANADA DURING THE FIRST SUBSTANTIVE MEETING  
1. Introduction 
4.158  The EC was found in EC – Hormones to be acting inconsistently w ith its WTO obligations.  It 
was given fifteen months to comply, but failed to do  so.  As a result, the DSB authorized Canada to 
suspend concessions to the EC, on the basis of which Canada adopted in 1999 the European Union 
Surtax Order .  The consistency of Canada's measure w as not challenged for many years, as it was 
understood to be adopted on the authorization of the DSB that remained in effect and as a part of a 
dispute that remained under the surveillance of th e DSB.  The EC is now, however, challenging the 
consistency of that measure. 
4.159  What has changed? Canada's measure does not  suspend concessions at a level higher than 
originally authorized; there has been no mutually  satisfactory solution; the DSB has not revoked its 
authorization; and there have been no findings of EC compliance.  Rather, the EC claims that what 
has changed is that it has adopted Directive 2003/ 74/EC, amending the EC measure originally found 
WTO-inconsistent. The EC notified to the DSB that  with these amendments it "considers itself" to 
have fully implemented the recommendations and rulings of the DSB in EC – Hormones  dispute and 
therefore Canada's measure is no longer justified.  The EC did not ask whether the DSB "considers" 
the EC to be in compliance, nor did it ask whether Canada and the United States "consider" the EC to 
be in compliance.  It simply asserted that it "consid ers itself" to be in compliance.  While the EC 
alleges Canadian "unilateralism", it is the EC that has engaged in unilateralism: it is the EC that has 
unilaterally determined that it now complies and that  the DSB authorization no longer applies.  On the 
basis of these unilateral determinations, the EC alle ges that Canada's measur e is WTO-inconsistent.  
4.160  While the EC seeks to prevent the Panel from considering the issues in the context of EC – 
Hormones , for it to prevail on any of its allegations, the Panel initially will have to make findings that 
relate in some way to the issue of the EC's "complia nce".  In fact, all parties agree that this dispute 
turns on the current status of the EC measure under WTO law.  For the EC, the issue is whether the 
EC is presumed to have complied; for others, the issue is whether the EC has actually complied. 
4.161  Since the EC does not benefit from a presumption of compliance, Canada cannot be found to 
have acted inconsistently with its WTO obligations without consid erably more evidence and argument 
from the EC on how it has actually complied.  The EC acknowledges itself in its alternative argument 
that if the Panel finds that the EC does not benefit from a presumption of compliance, the only way for it to prevail on its allegations would be for it to demonstrate its actual compliance.  However, the 
EC falls far short of meeting even the lowest threshold of evidence and argument required to 
discharge this burden.  Despite the fact that it is  not Canada's burden to do so, Canada will highlight 
some of the reasons why the EC has not complied with the recommendations and rulings in EC – 
Hormones .  WT/DS321/R 
 Page 31 
 
 
  2. Since the EC is not presumed to have comp lied, Canada has not acted inconsistently 
with its obligations under the DSU 
4.162  The EC's claim that it should be presumed to  have complied with the recommendations and 
rulings in EC – Hormones  is unsustainable.  Rather, the EC bears the burden of having the DSB 
authorization terminated by seeking multilateral confirmation of its actual compliance. 
(a) The EC's measure does not benefit from a presumption of compliance 
4.163  The EC's claims rely on the general principle th at States are presumed to act in conformity 
with their international obligations.  While not di sagreeing with this principle, Canada does disagree 
that it applies in these circumstances.  The presu mption of compliance applies to WTO Members prior 
to them being engaged in a WTO dispute.  It even  applies to WTO Members found to be in breach, as 
long as they comply within the prescribed period, an d prior to authorization to suspend concessions.  
If the EC measure had been adopted outside the cont ext of a WTO dispute, or if it had been adopted 
within the period granted to the EC to comply once it was found non-compliant, it would have 
benefited from a presumption of compliance.  But in  this case, the EC has abused its privilege of 
being granted a period of time to comply.  The resulting DSB authorization gave the original dispute an entirely different legal character, altering the "f undamental logic" that underpins the presumption 
of compliance.  Since the WTO compliance of Cana da's measure cannot co-exist with the presumed 
compliance of the EC's measure, the latter must yi eld to the former.  The explicit authorization 
granted under the terms of the DSU must prevail ov er a presumption of compliance.  Therefore, the 
EC cannot claim the benefits of such a presumption. 
(b) The EC bears the burden of demonstrating that its has complied 
4.164  According to the EC, the presumption that its measure complies simply "overtakes" the DSB 
authorization, automatically rendering Canada 's measure non-compliant. However, it cannot be 
correct that a unilateral assertion of compliance is sufficient to terminate a multilateral authorization. 
The EC's unilateralist approach to terminating the aut horization runs directly counter to the object and 
purpose of the dispute settlement system that dis putes be decided multilaterally and in a manner that 
ensures the security and predictab ility of the trading system.  Since the DSB authorization is based on 
findings that the EC was non-compliant, it is up to the DSB to revoke that authorization should it 
subsequently find that the EC has complied. The onu s is now on the EC to take appropriate steps 
within the multilateral system to confirm its comp liance if it wishes to have the DSB authorization 
terminated. No provision of the DSU prohibits  the EC from either initiating proceedings under 
Article 21.5 of the DSU or initiating proceedings de novo . 
(c) Canada has not acted inconsistently with Articles 22.8 and 3.7 of the DSU 
4.165  The EC alleges that Canada has failed to term inate its suspension of concessions despite the 
EC's notification that it has "removed" th e measure found to be inconsistent in EC – Hormones . 
Canada agrees that the issue is whether the EC has complied and Canada also agrees that its 
suspension of concessions may only be temporary, but this is where agreement ends.  The EC justifies 
its claim that its measure has been "removed" on the basis that it is presumed to comply – a 
presumption that Canada has demonstrated does not  apply in these circumstances – but the EC has 
neither sought nor received multilateral confirmation of this.  In the absence of a presumption of 
compliance or multilateral confirmation of compliance,  the EC has not satisfied the pre-conditions of 
Article 22.8 of the DSU, and Canada cannot therefor e be held to have contravened that provision. 
Without a finding that Canada has contravened Artic le 22.8 of the DSU, Canada also cannot be found 
to have acted inconsistently with Article 3.7 of the DSU. WT/DS321/R 
Page 32 
 
 
  (d) Canada has not acted inconsistently with Articles 23.1, 23.2(a) and 21.5 
4.166  The EC's claims that Canada is seeking the redress of a perceived WTO violation 
(Article 23.1 of the DSU), that Canada has made a unilateral determination regarding the consistency 
of the EC measure (Article 23.2(a) of the DSU) and that Canada's failure to initiate compliance 
proceedings constitutes prohibited unilateral conduct (Ar ticle 21.5 of the DSU) are also unsustainable.  
Contrary to the EC's mischaracterization of the le gal basis for Canada's actions, Canada is not seeking 
the redress of a perceived WTO violation; Canada has already sought and obtained redress, after 
which it was authorized by the DSB to  suspend concessions to the EC.  Since it is this authorization – 
which remains in effect in the absence of confirmati on of EC compliance – that continues to form the 
basis of Canada's suspension of concessions, Canada 's assessment of the inconsistency of the EC's 
recent amendments is unrelated to, and irrelevant to, Canada's measure.  Any interpretation of the 
DSU that would compel Canada to initiate proceedings  to challenge the EC's measure runs counter to 
the principle that WTO Members cannot be compelled to launch proceedings. 
3. The actual compliance of the EC's measure with the recommendations and rulings of 
the DSB 
4.167  In the absence of a presumption of compliance,  the EC must establish that it has actually 
complied with the recommendations and rulings in EC – Hormones .  While the EC chose not to have 
an Article 21.5 panel confirm its compliance, if the EC wishes to see the DSB authorization cease to 
apply, it must have this Panel c onfirm its actual compliance, altho ugh it appears unenthusiastic to do 
so and has submitted insufficient evidence on this poi nt. Despite the fact that the EC has failed to 
demonstrate that it has complied, Canada will demonstrate why it has not. 
(a) The EC has not presented a prima facie case that its measure complies 
4.168  While the EC implicitly acknowledges in its a lternative argument that it might bear the 
burden of demonstrating that it actually complies, the evidence it has put before the Panel falls far 
short of what is required to make a prima facie case.  A prima facie case must be based on "evidence and legal argument" in relation to each of the elements  of the claim.  While the EC claims that it has 
complied, it has put forward mere assertions of complia nce.  It does not attempt to substantiate these 
assertions in relation to the recommendations and rulings in EC – Hormones .  For example, it has not 
provided any evidence, nor advanced any arguments, that the documents it claims to be that risk 
assessment relating to oestradiol-17 β actually constitute a "risk assessment".  Nor does it explain how 
it has met the requirements justifying its ban on the five other hormones as a provisional measure. The 
Panel should also reject the EC's alternative claims that its measure actually complies. 
(b) The EC's measure does not comply 
4.169  Canada will nonetheless demonstrate that, were the EC to make a more substantial attempt to 
establish the actual compliance of its continue d hormones ban, it would be unable to do so. 
(i) The permanent ban on oestradiol-17 β 
4.170  The EC fails to satisfy the two conditions requi red to demonstrate that its permanent ban on 
oestradiol-17 β is based on a risk assessment: that the SC VPH opinions constitute a "risk assessment", 
and that the EC measure is "based on" that ri sk assessment.  The SCVPH opinions do not identify 
adverse effects arising from oestradiol-17
β when used specifically as a growth promotant, nor do they 
evaluate the potential that these effects will occur.  Much of what has been presented is speculation – 
based on incomplete and unconfirmed science – about potential adverse effects of oestradiol-17 β 
consumed via meat from treated animals.  WT/DS321/R 
 Page 33 
 
 
  4.171  The more conclusive the evidence is about potential adverse effects associated with 
oestradiol-17 β in specific circumstances, the less appli cable that evidence is  in identifying and 
evaluating any adverse effects associated with oestradiol-17 β consumed through meat from treated 
animals. The SCVPH concludes – without evidence – that concern about the adverse effects of oestradiol-17 β in specific circumstances is releva nt to the use of oestradiol-17 β as a growth 
promotant. Since the quantity of oestradiol-17 β absorbed by the human bod y from residues in meat is 
a fraction of that absorbed from other sources, the id entification of adverse effects that may occur as a 
result of the latter does not automatically suggest th at adverse effects may occur from the former. The 
SCVPH acknowledges that it has no evidence that the potential adver se effects it identifies arise from 
the consumption of meat from treated animals. 
4.172  The SCVPH places considerable emphasis on oestradiol-17 β as a possible genotoxin, 
presenting a profoundly problematic hypothesis about how reactive oestrogen metabolites can damage 
DNA and initiate tumours. This hypothesis has emerged from a limited set of studies done at 
exceedingly high doses either on laboratory animals or in vitro . The SCVPH has disregarded or 
downplayed – because it refutes its hypothesis – established scientific evidence that defence 
mechanisms exist to control the formation of  potentially genotoxic metabolites. The SCVPH's 
incomplete model of genotoxicity has attracted little support from the international scientific and 
regulatory communities.  
4.173  While reasonable and responsible governments may act on the basis of minority scientific 
opinions, these minority opinions must be based on cr edible evidence of actual adverse effects and not 
on hypotheses and speculation based on models that disregard established scientific principles. The 
SCVPH fails to address the issue of the dose required to create an adverse effect, but concludes anyway that no dose threshold level can be established. In other words, the SCVPH presents no 
evidence that an adverse effect th at may theoretically occur at high levels of oestrogen metabolites 
actually does occur at normal levels of oestradiol-17 β, nor does it present evidence that the residues in 
meat from treated animals are capable of reaching th is theoretical level.  Therefore, the three SCVPH 
opinions do not individually, or collectively, constitute a risk assessment. 
4.174  With respect to the second condition – that the EC measure must be based on a risk 
assessment – since the opinions on which the EC relies do not amount to a risk assessment for the 
purposes of the SPS Agreement , the measure cannot be said to be "based on" a risk assessment. 
(ii) The "provisional" ban on the other five hormones 
4.175  As for the EC's "provisional" ban on the other five hormones, the EC appears to be availing 
itself of the qualified exemption pr ovided for in Article 5.7 of the SPS Agreement .  The EC bears the 
burden of proving that its "provi sional" measure meets the four cumulative requirements.  The EC 
must first demonstrate that its provisional ban was adopted in a situation where the "relevant scientific 
evidence is insufficient" to allow it to perform a risk assessment.  Second, the EC must demonstrate 
that its provisional ban was adopted on the basis of "a vailable pertinent information".  Third, in order 
to maintain its provisional ban, the EC must seek  to obtain the additional information necessary for a 
more objective assessment of risk.  Fourth, it must  review its ban accordingly within a reasonable 
period of time. 
4.176  The EC has made no attempt to demonstrate th e "insufficiency" of the scientific evidence 
relating to the five provisionally banned hormones.  The body of scien tific data relating to these five 
hormones is such that the EC cannot plausibly argue that there is "insufficient" scientific evidence to 
conduct an adequate risk assessment.  Since the fi ve hormones have been the subject of multiple 
scientific assessments by reputable national regulat ory agencies and international expert committees 
such as the JECFA, the EC's contention that there is insufficient scientific evidence to do so is simply 
not credible. WT/DS321/R 
Page 34 
 
 
  4.177  The EC has also not established  that there is a rational connection between its provisional ban 
and the "available pertinent information" on these five hormones, including information from relevant 
international bodies such as JECFA and Codex.  In fact, the EC's hormones ban is inconsistent with 
JECFA's conclusions and with the standards adopt ed by Codex regarding residues of these hormones 
in meat.  
4.178  Finally, the EC has presented no evidence that , while maintaining its hormones ban, it is 
fulfilling the third and fourth substantiv e requirements of Article 5.7 of the SPS Agreement .  It has 
been nearly two years since the adoption of the EC's so-called provisional ban on these five hormones.  Yet there is no indication that the EC has reviewed its measure in the light of the scientific 
data available in the intervening period leading to these proceedings. 
4. Conclusion 
4.179  In order to resolve this dispute, the first finding of the Panel in this case will have to relate to 
the current status of the EC measure under WTO la w.  The EC claims that it should be presumed to 
have complied with the recommendations and rulings of the DSB in EC – Hormones , and as a result 
Canada has acted inconsistently with several of its  DSU obligations.  However, without the benefit of 
a presumption of compliance, the EC cannot succeed on the basis of the arguments it has made so far. 
Canada's DSB authorization remains in effect, and it is the EC that bears the burden of proving that it 
now complies.  If the EC continues to refuse to di scharge its burden under the DSU to demonstrate its 
own compliance, the outcome of this case is decide d.  On the other hand, if the EC accepts that 
burden, Canada has provided some of its own views on whether the EC has actually complied.  Seven 
years after the DSB issued its recommendations and rulings in EC – Hormones , the total ban re-issued 
by the EC remains unwarranted by the evidence adduced. 
5. Concluding statement of Canada 
4.180  As is typically the case at this stage of disput e settlement proceedings many points have been 
made by the participating parties on many subjects.  You may not find all of the points raised to be 
necessary for the purpose of reaching a proper resoluti on.  With this in mind Canada would like to 
reinforce some of the basic issues at st ake that have been raised before you. 
4.181  In 1998, the EC was found by the DSB in the EC – Hormones  dispute to be acting 
inconsistently with its  obligations under the SPS Agreement .  In 1999, in an attempt to induce the EC 
to comply with its recommendations and rulings, th e DSB authorized Canada to suspend concessions 
to the EC.  Neither of these facts is contested.  Pu rsuant to that authorization, Canada enacted the 
European Union Surtax Order , the measure now challenged by the EC.  This is also not contested. 
4.182  The EC adopted a Directive in 2003 that it considers to have implemented the 
recommendations and rulings of the DSB.  The EC now  claims that the moment that it notified the 
DSB that it had adopted this implementing measure , Canada was required e ither to remove its 
measure or to challenge the EC’s measure.  The EC  claims that this is the case regardless of whether 
the DSB has confirmed its compliance. 
4.183  How does it happen that Canada’s measure enacted as a consequence of a multilateral 
authorization cannot be applied subsequent to the EC considering itself that it has brought itself into 
compliance and notifying the DSB to this effect? 
4.184
 Apparently the answer is that the EC is presu med to have complied such that its implementing 
measure prevails over Canada’s duly-authorized m easure. Moreover, not all measures of all Member 
States benefit from the same presumption. According to  the EC, only those that satisfy some arbitrary 
criteria that have no textual basis in the terms of the DSU benefit from this presumption.  WT/DS321/R 
 Page 35 
 
 
  4.185  Despite the EC’s efforts to make this disput e a case about presumptions, the key to resolving 
the dispute lies first in determining how, and at th e initiation of which party, the actual compliance of 
the EC is to be confirmed multilaterally.  In fact, all of Canada’s actions at issue in this dispute can be 
explained – not in terms of Cana da having made any determination about the compliance of the EC’s 
amendments – but in terms of Canada requiring, in the absence of mutual agreement, multilateral 
confirmation that the EC has complied.  The EC asserts that it has.  Canada disagrees. 
4.186  But the fact of the matter is that due to the existence of Canada’s authorized suspension of 
concessions, neither the EC nor Canada on its ow n can make such a determination.  The only 
determination of EC compliance that matters at this point is one that must be made by the DSB.  And 
until that happens, Canada is under no obligation to remove its measure.  The issue remains, however, 
as to how to have the DSB arrive at such a determination. 
4.187  The EC would like to make this dispute about  good faith.  Canada does not question whether 
the EC is acting in good faith.  For Canada, th e issue is simply one of compliance, and more 
importantly, which party bears the burden of demons trating the compliance of the measure taken by 
the EC to implement the recommendations and rulings of the DSB. 
4.188  In our view, and as the EC itself readily admits, it is the party alleging the affirmative of a 
claim that bears the burden of proof.  In this case, si nce it is the EC that is alleging that one of the 
three elements of Article 22.8 has been met, it bears the burden of proving it. The EC’s claims 
notwithstanding, Article 22.8 is not "self-executing". To suggest that the EC needs simply to notify its 
"removal" in order for Canada to be required to re move its measure, is just another way for the EC to 
say that its unilateral declaration of compliance can terminate a multilateral authorization.  Further, in 
this case it is the EC that is a lleging that Canada’s presumptivel y valid DSB authorized retaliation 
measure ceases to apply.  The EC can only effect  this by demonstrating the validity of its own 
measure. 
4.189  With respect to DSU Article 23, this provisi on only applies where, subsequent to a WTO 
Member making a unilateral determination that anot her Member has violated a WTO obligation, the 
Member making the determination then seeks to redress that perceived violation by methods other than DSU dispute settlement.  The question of unilate ral determination in this case is a moot point.  
All WTO Members make their own assessments of the consistency of other Member’s measures on a 
regular basis.  What is relevant is whether a Member has acted on that assessment to seek redress 
outside of the dispute settlement process. 
4.190  While the EC asserts that its violation that pe rmitted the DSB to authorize Canada’s measure 
no longer exists, it insists Canada must forego th e exercise of that measure even where the EC 
declines to put the matter before a panel.  Also, if  we understand the EC correctly, even if Canada 
were to submit the matter to a panel, because of  the presumed compliance of the EC’s measure, 
Canada cannot apply its DSB authorized measure while that review takes place. 
4.191  Is there a disagreement between Canada and the EC?  The EC thinks its measure complies.  
As stated earlier, Canada disagrees.  However, it do esn’t follow that Canada is now obliged to initiate 
a panel under Article 21.5.  In the past week the Panel has heard agreement that the DSU provisions 
we are dealing with contain many interpretative di fficulties.  Clearly the rules are not a model of 
clarity.  
4.192  However, one thing is clear.  Article 21.5 does not create an obligation .  It creates a right
 that 
WTO Members can use in dispute settlement procee dings.  Somehow, the EC reconstructs it as an 
obligation in conjunction with Article 23. WT/DS321/R 
Page 36 
 
 
  4.193  Canada is not advocating a formalistic approach to the termination of the DSB authorization. 
What we are saying is that Canada is entitled to rely on this DSB authorization until such time as the 
EC demonstrates to a WTO panel that the basis on which the DSB authorization was granted no longer exists.  It is insufficient, as the EC has done in this case, to simply assert that the basis of the 
authorization no longer exists as a matter of fact.  The EC must prove that this is so by demonstrating to this Panel that it has complied with the recomme ndations and rulings of the DSB.  Until such time 
as the EC has met this burden, Canada’s suspensi on of concessions remains authorized by the DSB. 
G. S
ECOND WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES  
1. Introduction 
4.194  The European Communities' case is straightfo rward.  WTO Members that apply sanctions 
against another WTO Member cannot adopt a lean-b ack-and-wait-attitude over years and continue to 
suspend concessions in the presence of a subseque nt compliance measure.  Just as WTO Members 
who have been found to be in violation of the covered agreemen ts have a positive obligation to 
implement, so have retaliating Members a positiv e obligation under Article 22.8 not to apply 
sanctions any more and/or, if they disagree with the compliance measure, to initiate WTO proceedings under Article 21.5 of the DSU.  This has always been the prac tice in WTO proceedings. 
If a retaliating WTO Member fails to respect these rules and procedures under the DSU, it will be in 
violation of Articles 23.1 and 23.2(a) of the DSU.  
2. PART 1:  Violation of Articles 23.1, 23.2(a ), 21.5 and 22.8 of the DSU (systemic issues) 
(a) Canada is in violation of Artic le 23.1 and 23.2(a) read together with Article 21.5 of the DSU 
4.195  The existence of a DSB authorization does not exclude that a WTO Member is still seeking to 
redress a violation within the meaning of Ar ticle 23.1 and making a determination under 
Article 23.2(a).  The very fact of applying sanctions implies that a Member is seeking to redress a 
violation. And this in turn implies that this WTO Member has made a "determination" about the 
WTO-inconsistency of the measure.  The applicati on of these sanctions may be justified if a measure 
by a WTO-Member has been properly found to be WT O-inconsistent and, if on that basis, the DSB 
authorizes the suspension of c oncessions. However, the situation is different regarding the 
continuation  of sanctions in the presence of a complian ce measure which the DSB has not found to be 
WTO-inconsistent.  A DSB authorization which ha s been granted in view of an original WTO-
inconsistent measure can not justif y the continued application of sanc tions against a different measure 
which has never been found multilaterally to co nstitute a WTO-violation.  Rather, since the 
application of sanctions requires a causal rela tionship to a WTO-inconsistent measure, any present  
application of sanctions must be linked to a present  measure.  Conversely, the present  application of 
sanctions to a past and no longer existent measure is not jus tified as it would be unjustified to link the 
present  application of sanctions to a future , not yet existing measure.  
4.196  Canada's counter-argument would lead to the ab surd result that Canada could continue to 
apply sanctions irrespective of any events occurring after the DSB authorization and thus ignoring the 
object and purpose of sanctions, i.e. to induce comp liance and to rebalance rights and obligations in 
case of a WTO violation.  If Canada applies sanct ions merely because of the existence of a DSB 
authorization and irrespective of a subsequent  compliance measure, it is neither inducing nor 
rebalancing anything.  
4.197  The true motives for Canada's continued appli cation of sanctions are revealed by Canada's 
reply to EC Question No.13.  Canada makes a link of  its current measure to the original purpose of the 
DSB authorization.  Yet, as the original purpose of the DSB authorization was to induce compliance 
and to rebalance rights and obligations, Canada ob viously determines that the EC compliance measure  WT/DS321/R 
 Page 37 
 
 
  has not achieved either and that, therefore, the orig inal purpose still exists.  By doing so, Canada acts 
in an illegal way because the continued application su spension of concessions is thus based solely on 
a unilateral determination of non-co mpliance.  Canada's action also fits precisely into the definition of 
"seeking of redress" as developed by the relevant case law.  
4.198  In this context, Canada has also met the thres hold of a unilateral "determination" in violation 
of Article 23.2(a).  The term "determination" is defined, inter alia , as an "authoritative opinion"; "a 
conclusion reached"; "the action of coming to a decisi on"; "the result of this"; "a fixed intention".  
This term has been further elaborated by the Panel in US – Section 301 Trade Act .  Thus, even an 
implicit determination by the appr opriate behaviour, such as the con tinuation of sanctions, would be 
covered by a "broad reading" of this requirement, in  particular, if the continuation occurs deliberately 
and is accompanied by respective statements. 
4.199  Moreover, the interpretation of the word "deter mination" should be guided by the context of 
Article 23.2(a), i.e. Article 23.1, and the object a nd purpose of this provision.  This provision as a 
whole aims at preventing that a Member takes "t he law in its hands" and seeks the redress of a 
violation on the basis of a unilateral determinati on.  The importance of this general principle is 
confirmed by the title of this provision.  The crucial importance of Article 23 has also been 
acknowledged by the Panel in US – Section 301 Trade Act .  It is therefore necessary to look at a 
Member's behaviour as a whole when confronted with a respective situation.  If a WTO Member 
repeatedly and consistently states that a violation by another Member exists and if, in this context, this 
Member applies concrete measures against the other Member, it can be concluded that this Member is seeking a redress against a violation on the basis of  a unilateral determina tion.  Applying these 
principles to the present case, there can be no doubt that Canada has made a unilateral "determination" 
of non-compliance of the EC measure.  This is al ready demonstrated by Canada's comments in the 
SPS Committee in respect of the EC draft proposal as early as in 2000 as well as its comments in the 
DSB meeting of 1 December 2003.
18  Considering Canada's whole conduct there can equally be no 
doubt that Canada has made a "determination" since it deliberately continues to apply sanctions 
against the European Communities.  
4.200  By refusing to initiate a compliance proceeding in this situation, the European Communities 
considers that Canada is also in breach of Article  21.5.  Canada's counter-argument that such an 
obligation would "vitiate" the existence of the DSB au thorization is fallacious as Canada is essentially 
saying that it cannot be obliged to invalidate its DSB authorization by initiating and losing an Article 21.5 proceeding.  The European Communities do es not believe that this is the correct reading 
of the DSU.  Apart from policy reflections Canada  has not offered any legal arguments on why the 
continued application of sanctions is not violatin g Article 21.5 in conjunction with Articles 23.1 and 
23.2(a).  Canada fails to understa nd that in this case the obligatio n to initiate a compliance review 
under Article 21.5 is linked to its continued app lication of sanctions against the EC compliance 
measure.  Because of this continued applicati on of sanctions against the European Communities, 
Canada is under a positive obligation to bring a compliance proceeding against the EC measure.  
Thus, in this specific situation, Canada's discre tion regarding whether or not it is appropriate to 
initiate WTO proceedings is limited as the failure to  do so automatically encroaches on the EC rights, 
i.e. its right not to be exposed to sanctions fo r a measure which another WTO Member unilaterally 
determines as WTO-inconsistent.  
4.201  Canada's argument that an obligation to init iate a compliance proceeding in this specific 
situation would "seriously undermine" the WTO dis pute settlement system is for these reasons equally 
not credible. The purpose of the WTO dispute settlement  system is not the application of sanctions but 
to resolve disputes in a prompt manner. Canada's prot racted application of sanctions and its refusal to 
initiate a compliance proceeding against the EC meas ure runs diametrically against this very basic 
                                                     
 
18 WT/DSB/M/159. WT/DS321/R 
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  objective of the WTO. The WTO dispute settlement  system has to balance the interests of 
complaining and defending parties, it is not an excl usive tool for a retaliating Member. Consequently, 
a Member in violation of its WTO obligations is under an active obligation to comply. Conversely, the retaliating Member is under an active obligation to initiate a compliance review under Article 21.5 
and failure to do so will result in a violati on of Article 23.1, 23.2(a), 21.5 of the DSU. 
4.202  Finally, the European Communities would take issue with Canada's theory regarding a self-
initiated Article 21.5.  As repeatedly stated in its  Written and Oral Statement, it is not possible or 
meaningful to initiate a compliance review agains t its own implementing measure.  The DSU is based 
on a contradictory proceeding whereby a complaini ng party alleges a WTO-violation against another 
party.  Conversely, the DSU does not provide for a situation where a "complaining party" alleges the 
WTO-consistency of its own measure, in particul ar to prove the negative that its measure is not WTO-
inconsistent.  Contrary to what Canada asserts this is also clearly spelt out in Article 6.  The terms 
"complaining party" and "complaint" cannot be read in the "broad sense" as Canada suggests.  The 
New Shorter Oxford Dictionary defines the term "complaint" as a "formal accusation or charge, a 
subject or ground of dissatisfaction".  Obviously a case initiated under Article 21.5 would not fulfil 
any of these definitions as the European Communiti es would not bring a "charge" against its measure 
or express any dissatisfaction about its compliance m easure.  By way of context, Articles 3.8 and 1.1 
also demonstrate the proper distribution of the parties' roles under the DSU.  
(b) Canada's continued suspension of concessions a nd related obligations is in violation of 
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU 
4.203  The European Communities disagrees with Canada 's assertion that the continued application 
of the sanctions is unrelated to the EC compliance measure.  Since the original EC measure has been 
removed, Canada's argument would mean that Cana da is currently applying sanctions against a non-
existent measure.  Such a conclusion would not only  be illogical but also in plain contradiction with 
the very purpose of sanctions, namely to rebalan ce rights and obligations and to induce compliance in 
the light of a current  WTO violation.  Instead, as explained sev eral times, it is obvious that Canada 
continues to apply sanctions because it consider s the EC compliance measure as WTO-inconsistent. 
However, the continued application of an "old" DS B authorization cannot be justified against a "new" 
measure on which the DSB authorization is not based  and if this measure has never properly been 
found WTO-inconsistent. 
4.204  Contrary to what Canada believes the prohibitio n to continue the application of sanctions 
under Article 22.8 of the DSU does not depend on whet her the DSB authorization has formally been 
removed.  Article 22.8 of the DSU is unequivocal in  the sense that the susp ension of concessions and 
related obligations may only be "a pplied" until the inconsistency of the measure has been removed. 
Canada constantly fails to acknow ledge the difference between the "existence" of a DSB authorization 
and the "application" of sanctions.  Under Article 22.8 it is quite noteworthy that the scope of 
application of sanctions is limited to a "measure f ound to be inconsistent with a covered agreement". 
Yet, the only way to "find" a measure to be  WTO-inconsistent under the DSU is through the 
multilateral procedure.  Consequently, it is not possi ble to apply sanctions under Articles 22.8, 23.1 
solely on the basis of a "unilateral finding" of inco nsistency.  In the same vein, the continuation of 
sanctions cannot be based on a unilateral finding of inconsistency of the compliance measure.  In this 
context, the self-executing nature of Article 22.8 al so needs to be taken into account.  The termination 
of the application of sanctions under this provi sion does not depend on a specific finding of the DSB 
or a withdrawal of the DSB authorization. Rath er, once the conditions under Article 22.8 of the DSU 
are met – including in the presence of an unchallenged compliance measure – the application of 
suspension "shall" stop.  
4.205  The European Communities also takes issue with Canada's as sertion about the reversed 
burden of proof in this "post-suspension scenario".  Ap art from the fact that Canada's theory is rooted  WT/DS321/R 
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  in the misconception that otherwise the DSB authori zation would be terminated merely on the basis of 
a presumption of good faith compliance it has also  no basis whatsoever either under WTO law or 
under public international law. The WTO jurisprude nce is crystal clear that the party bearing the 
burden of proof is the one that asserts the affirmative of a claim or defence.  Furthermore, the burden 
of proof is one concrete example of the genera l good faith principle, i.e. the presumption of 
compliance.  This principle applies to an implemen ting measure as such but not to a specific timing 
when the measure had been adopted. The absurdity of  Canada's theory is best exemplified in the 
present case where the European Communities had to st udy in detail the difficult scientific questions. 
Because of its carefulness the European Communitie s was not in a position to respect the reasonable 
period of time (RPT). Yet, according to Canada, if  the European Communities had hastily adopted a 
compliance measure within the RPT this measure would benefit from a presumption of compliance 
whereas a measure which has been prepared  with much more carefulness does not.  
4.206  Even though there might be a question about th e relationship between this principle and the 
"application" of a DSB authorization, the DSU also  provides for a solution to  this question which is 
the compliance proceeding under Article 21.5.  Thus, if a retaliating Member contests the WTO 
consistency of an implementing measure it must initiate a compliance proceeding.  In this context, Canada's argument to the security and predictability of the trading system is also off the point.  In 
Canada's view the only secure and predictable way of  the trading system is obviously the application 
of sanctions.  However, the application of sanctions  under the DSU is not an objective in itself.  The 
application of sanctions is designed to achieve fu ll compliance with the WTO obligations by another 
Member.  Thus, if a violating Member has adopted  compliance measures in good faith, it is indeed a 
matter of security and predictability of the trading system that the application of sanctions ceases to 
apply, if these measures are never properly challenged.  
4.207  Finally, the European Communities disagrees with  Canada's theory regarding the way a DSB 
authorization may be terminated which is not support ed by the text of the DSU.  As explained in 
detail in the EC second written submission, Canada's  theory contains a num ber of inconsistencies 
such as that it is the DSB that r ecommends to itself the termination of  the authorization or perhaps the 
panel that recommends to the DSB to do so (contrary to Article 19) or in respect of an implicit 
revocation of the authorization through the adopt ion of reports. Yet, one wonders how such a 
recommendation could be made give n that under Canada's theory, the DSB authorization makes the 
continued sanctions by definition  legal.  Also, this raises the qu estion how the suggested implicit 
authority can be squared with Article 2.1 which exp licitly lists the tasks of the DSB.  An implicit 
revocation of a DSB authorization is not included in th is list.  In the same vein, Article 2.4 refers to 
the decision-making powers of the DSB "where th e rules and procedures of this Understanding 
provide".  Yet, Canada cannot explain where the DSU provides for such an implicit revocation of a 
DSB authorization.  Furthermore, under Canada's  theory new "claims" would suddenly become 
"defences" even in case of a self-initiated Article 21 .5 proceeding.  This means in other words that 
Canada assumes a right to redraft the Panel's terms of reference on the basis that a new claim (e.g. a 
violation of Article III) is a "defence" against an ol d claim (e.g. Article I).  However, Canada cannot 
explain how an alleged violation of Article I could be "defended" by a new violation under Article III. 
Moreover, Canada appears to arguing  the absurd theo ry that the subject-matter of an Article 21.5 is 
not only the compliance measure but also the applica tion of the sanctions which is however, in plain 
contradiction to the terms of Article 21.5. 
3. 
PART 2:  The WTO-consistency of the EC compliance measure  
4.208  The European Communities, in its Oral Statemen t at the first substantive hearing as well as in 
a number of replies to the Panel's questions, has e xplained the various steps undertaken to carry out 
the comprehensive risk assessment which led to the adoption of its implementation measure, i.e. the 
revised Hormones Directive 2003/74/EC.  As the Appellate Body found that the studies and other evidence presented by the European  Communities was relevant but not  sufficiently specific, the WT/DS321/R 
Page 40 
 
 
  objective of the compliance effort undertaken was to  re-assess all existing and most recent data from 
any relevant source for the six hormones and to comple ment these data in particular in three respects, 
namely: (a) on certain issues regarding specific he alth risks from residues in meat treated with 
hormones for growth promotion purposes, (b) on  risks arising from possible abusive use and 
difficulties of control, and (c) on an appropria te risk assessment for melengestrol acetate (MGA), 
which had not been carried out so far.  To this effect the European Communities launched 17 specific 
studies and tried to collect information from all relevant sources, including from third countries, 
international scientific bodies (such as JECFA) and i ndustry.  All these steps were undertaken in full 
transparency and after consulting the relevant sci entific committees and bodies that are responsible 
under Community law to conduct this kind of assessment. 
4.209  In November 1998, the European Communiti es mandated its Scientific Committee on 
Veterinary measures relating to Public Health (SCV PH), to address the potential risks to human health 
from hormone residues in bovine meat and meat products treated with the six hormones for growth 
promotion.  The SCVPH adopted its opinion unanim ously taking into account all pertinent scientific 
information available at the time, including JECFA' s revised assessment of the three natural hormones 
oestradiol-17 β, testosterone and progesterone that had been issued in February 1999. The 1999 
Opinion concluded that a risk to the consumer had b een identified with different levels of conclusive 
evidence for the six hormones evaluated.  Subsequent ly, the SCVPH was twice requested to review its 
opinion in light of new assessments carried out by  other bodies or institutions and new evidence. The 
SCVPH did so in 2000 and 2002.  The SCVPH concluded both times that the new evidence did not provide convincing data and arguments demanding revi sion of its previous conclusions.  On the basis 
of the above scientific risk assessments provided by  the SCVPH, the competent European regulatory 
authorities carried out an analysis of risk manageme nt options in light of the appropriate level of 
protection it had chosen. This lead to the a doption of the EC' compliance measure 2003/74/EC.  
4.210  As explained in detail in the second writte n submission, JECFA's assessment proved 
insufficient in various respects and where the SCVPH conducted a more thorough analysis.  These areas concern carcinogenicity  of the three natural hormones and the outdated residues data  as well as 
for data concerning the dose-response relationship.  In  respect of the latter, JECFA also neglected the 
endogenous production in the case of pre-pubertal children.   Furthermore, the 1999 JECFA report has 
been seriously undermined by recent developments concerning the bioavailability of residues of these 
hormones.  JECFA also failed to address the possibilities for misuse or abuse  when the administration 
of these hormones is freely authorized "over the c ounter", as is the situation in the United States. 
4.211  Turning to the legal arguments, the Europ ean Communities disagrees with Canada's 
arguments regarding the burden of proof.  The Eu ropean Communities, at the oral hearing and in 
reply to the Panel's questions, has demonstrated a violation of Articles I:1 and II of the GATT 1994 
by Canada and that the measure found to be inconsiste nt has been "removed" in the context of a direct 
claim under Article 22.8.  In particular, the Eur opean Communities has pointed out that it cannot be 
required to prove a negative, namely that there is no violation of WTO obligations.  In line with the 
established case law of the Appellate Body, it is for Ca nada, in this case, to set out a prima facie case 
of violation, and not for the European Communities to set out a case of non-violation.  
(i) The ban on oestradiol-17 β is in conformity with Article 5.1 
4.212  The European Communities conducted a proper risk assessment within the meaning of 
Article 5.1 and Annex A Point 4 of the SPS Agreement .  The European Communities has pointed out 
in its reply to Question 24 of the Panel, that ther e is a difference between a scientific risk assessment 
in the narrow sense clearly referred to here by Cana da and the risk assessment within the meaning of 
Article 5.1 and Annex A Point 4 of the SPS Agreement .  The latter, as has been stated by the 
Appellate Body, also comprises a risk management stage which is the responsibility of the regulator 
to carry out and not the scientific bodies.  Canada concentrates its arguments on the alleged flaws in  WT/DS321/R 
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  the scientific risk assessment of the SCVPH a nd the European Communities will reply to these 
arguments.  
4.213  Canada submits a series of factually and lega lly incorrect arguments in respect of the 
identification of the adverse effects.  In partic ular, as the European Communities' written and oral 
submissions have shown, Canada's arguments are b ased on outdated data of its own or of JECFA and 
misinterpret the findings of the latest scientific  evidence, including that generated by the 17 EC 
studies.  Indeed, all the references in Canada's su bmissions are confined essentially to the findings of 
JECFA of 1988 and 1999 for th e three natural hormones and of 2000 for melengestrol acetate. 
However, these findings by JECFA did not take in to account the more recent evidence on which the 
1999-2002 evaluations by the SCVPH are based.  To overcome this obvious diff iculty, Canada argues 
that the findings of the SCVPH are not specific to residues in meat.  This argument of Canada is 
flawed, because the 1999 and 2002 Opinions of the SCVPH have a specific chapter for each of the six 
hormones about the dose-response question and the pot ential risks from residues in meat from animals 
treated with these hormones for growth promotion.  Canada ignores the fact that even JECFA has 
declared oestradiol-17 β for the first time in 1999 to have "genotoxic potential", which means that 
there is normally no safe threshold for any amount of  residues in meat from this hormone.  So the 
issue of specificity for this hormone becomes irrelevant.  Canada's claims are also contradicted by the 
most recent evidence (the US for the first time  in 2002 recognised in its National list of carcinogen 
oestradiol to be a proven carcinogen), which indicat es that there is no safe threshold for this hormone. 
The SCVPH finding is also confirmed by more recent literature as well as more recent data of endogenous production by pre-pubertal children.  
4.214  Canada's statement that the SCVPH Opinions di d not clearly identify the presence of adverse 
effects is also incorrect as demonstrated by pag es 41 to 43 and 72 of the 1999 Opinion.  It is also 
incorrect, as demonstrated by the JECFA report, to allege that the SCVPH opinion based its 
conclusions on the genotoxic effects of oestradiol-17 β on a hypothesis that is not recognized 
elsewhere.  The UK Sub-Group Report also acknowledges the risk of genotoxic effects of oestradiol-17 β.  Finally, it is true that some foods that are part of a balanced human diet naturally 
contain oestradiol-17 β.  However endocrine hormones regulate a variety of physiological functions 
and their balance is a very delicate matter; in par ticular pre-pubertal children are the group of greatest 
concern in this respect.  It is therefore necess ary to reduce the amount of additional hormones the 
population is exposed to to a level that is as low as reasonably achievable by avoiding excess intake 
due to the use of hormones as growth promoters.  It is necessary that substances used in animals 
provide reasonable certainty of no harm in particular if their use does not provide any benefit for the 
animals treated that would justify the tolerance of such harm.  Therefore, if oestradiol-17 β increases, 
e.g. the incidence of breast cancer as more recent studies seem to indicate, any avoidable increase, 
however small, is not desirable. 
4.215  Contrary to what Canada asserts the risk assess ment did also evaluate the potential occurrence 
of the adverse effects it purports to identify.  This  issue is referred to in the SCVPH Opinions in 
several points as specified in the EC second written subm ission.  Furthermore, in arguing that the ban 
on oestradiol-17 β is not based on a risk assessment, Canada  essentially repeats the argument on the 
lack of specificity of the risk assessment wh ich is, as explained, not of any value.  
(ii) The provisional bans on five of the horm onal substances do not violate Article 5.7 
4.216  Contrary to what Canada argues the provisi onal bans on the five hormonal substances 
progesterone, testosterone, trenbolone , zeranol and MGA are in conformity with Article 5.7 of the 
SPS Agreement  because the current evidence is  insufficient.  The European  Communities recalls that: 
(1) what the European Communities had considered to be sufficien t evidence had been found to be 
insufficient by the Appellate Body and proved indeed  to be insufficient also in the light of risk 
assessment standards that were developed in the years after the EC – Hormones decision; and (2) the WT/DS321/R 
Page 42 
 
 
  body of evidence, in the meantime, has developed and, while still not providi ng enough knowledge to 
carry out a complete and definitive risk assessme nt, supports the conclusion that precautionary 
measures are required in order to achie ve its chosen level of protection. 
4.217  As further detailed in its Written and Oral  Submissions, the European Communities 
considers, on the basis of the 1999 – 2002 SCVPH opinions, that the current evidence is full of gaps in pertinent information and important contradic tions that render the conclusions reached by JECFA 
in 1988, 1999 and 2000 no longer valid.  Thus, it does not allow in qualitative or quantitative terms, 
the performance of an adequate assessment of ri sks as required under Article 5.1 and as defined in 
Annex A to the SPS Agreement .  Furthermore, since the latest ri sk assessment by the SCVPH in 2002, 
there appeared internationally a number of furthe r scientific developments all of which converge 
toward, and provide further support to, the conclusi ons reached by the relevant scientific committee of 
the European Communities, such as a study supported by the Ohio State University, the US National 
Cancer Institute and the US Department of Defe nce Breast Cancer Research program concerning 
zeranol (and oestradiol-17 β) or a large scale epidemiological study in Europe suggesting that high red 
meat intake is associated with (statistically signif icant) increased colorectal cancer risk, confirming 
results from previous smaller studies.  Additi onally, in 2002, the women's health Initiative 
Randomised Controlled Trial published findings indica ting that the risks outweigh the benefits from 
the use of oestrogen plus progestin in healthy pos tmenopausal women, thus reinforcing the previous 
findings made by the IARC in this respect.  All this  evidence and most recent scientific developments 
have now clearly tipped the balance against th e previously held assumption (by Canada and 
Codex/JECFA) that residues of these hormones in meat from animals treated for growth promotion 
pose no risk to human health.  
4.218  Consequently, the evidence which served as the basis in the 1988 and 1999-2000 JECFA 
evaluations of these hormones is not sufficient to pe rform a definitive risk assessment, in particular by 
the WTO Members applying a high level of health pr otection of no risk from exposure to unnecessary 
additional residues in meat of animals treated with hormones for growth promotion.  To deny the existence of this new scientific reality would deprive the European Communities and other WTO 
Members of their autonomous right to choose their a ppropriate level of protection, because it would in 
effect impose on them a requirement to demonstrat e positively the existence of clear harm, which they 
may not always be able to fulfil in case of cancer because of the long latency period and the numerous 
confounding factor that play a role.  This will re nder the application of Article 5.7 impossible in a 
situation where the body of the pertinent scientific  evidence is in the process of moving from a state 
of presumed "sufficiency" into a state of pertinent "i nsufficiency".  The text and preparatory history of 
the SPS Agreement  do not support such a (restrictive) construction of Article 5.7, which would 
moreover be against the principle of  effective treaty interpretation. 
4.219  Finally, Canada has not put forward any specifi c arguments as to why the available pertinent 
information on the five hormonal substances in question would not be insufficient, but instead sufficient.  It has therefore failed to meet the burden of setting out any prima facie  claim.   
4.220  In any case, in its second written submission the European Communities has set out in detail 
the state of insufficient evidence as determined by the SCVPH for each of the hormones which have 
been provisionally (progesterone, testosterone , trenbolone, zeranol, MGA) prohibited by the 
Directive 2003/74/EC. In particular, as regards ze ranol, Canada does not put forward any specific 
argument as to why the evidence assessed by th e SCVHP would not be insufficient. The only 
assessment on zeranol publicly available is that of JECFA which dates back to 1988.  The SCVPH 
took into account this assessment but disagreed with  a number of its basic findings on the bases of 
more recent scientific evidence, some of which w as generated by the 17 EC studies.  Moreover, the 
most recent study on zeranol and the risks associ ated with its administration to meat producing 
animals is done by independent US scientists mentioned above and it clearly invalidates the findings of the 1988 JECFA opinion.   WT/DS321/R 
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  4.221  Furthermore, as regards MGA, there is curren tly no international standard or recommendation 
on MGA, as Codex has not adopted one. JECFA asse ssed MGA for the first time in 2000 (and in 2004 
as regards the calculation of the MRL only), but this has not yet led to the adoption of a standard.  If 
one examines the evidence that serve d as the basis of the 2000 JECFA re port it can be seen that nearly 
all the studies referred to therein date from the 1960s and 1970s.  These very old studies constitute in 
fact the evidence which the defending parties have refused to provide to the European Communities, 
despite its repeated requests on the grounds that th ey are confidential.  In the absence of a Codex 
standard, the opinion of JECFA becomes irrelevant, fo r the additional reason that it failed to take into 
account the more recent data generated by th e 17 EC studies and the 2002 SCVPH assessment.  
Canada does not put forward any specific argumen t as to why the evidence assessed by the SCVPH 
would not be insufficient.  It does not even refer, in this context, to the fact that MGA, in the 
meantime (2000), has been assessed (for the first ti me) by the JECFA and which subsequently has 
been taken into account by the SCVPH in its 2002 Opinion.   
4.222  The European Communities adopted the provisional prohibitions on the basis of the available 
pertinent information. The only argument that Canada  raises in this regard is that the European 
Communities' measure is not based on JECFA's ass essment.  However, as the European Communities 
explained, JECFA's assessment was cons idered to be insu fficient, because, inter alia , it was found to 
be outdated. 
4.223  The European Communities has also not violat ed its obligation to seek to obtain the 
additional information necessary for a more objective asse ssment of risk or to review the measure in 
question. Canada does not put forward any convincing argument as to why the European Communities would have failed to fulfil its obligat ion to seek additional information.  Indeed, the 
European Communities has specifica lly laid down that obligation in Directive 2003/74/EC. As a 
matter of fact, it has already undertaken initiatives to seek additional information.  In particular, it has 
issued a new call for scientific data and resear ch from 2002 onwards, on substances with hormonal 
activity which may be used for growth  promotion purposes in bovine meat. 
4.224  In the view of the European Communities, and as explained in reply to the Panel's Question 
71, a requirement to review a measure "within a reasonable period of time" can only apply as of the 
coming into effect of the provisional measure in qu estion. The Directive has come into effect on 
14 October 2003.  Thus, it can ha rdly be argued that a reasonable period of time has actually already 
elapsed. 
4.225  The European Communities has moreover pointed out that Directive 2003/74/EC contains an 
obligation to "keep the measures a pplied under regular review with a view to timely presentation …  
of any necessary proposals."  Regular review certa inly implies reacting, as appropriate, to new 
evidence or information that may appear.  As a matte r of fact, the only new information that has come 
to the knowledge of the European Communities is th e recent draft assessment of the UK Group.  That 
draft report has already been forwarded to Europ ean Food Safety Authority for review.  Equally, 
should the recent call for new scientific informat ion (see above) yield any new evidence, such 
evidence would also be assessed by EFSA without any undue delay. 
4.226  In conclusion, Canada has not put forward any convincing arguments to support its claim that 
the European Communities has vi olated Article 5.7 of the SPS Agreement
 in adopting a provisional 
ban on the five hormonal substances progesterone, testosterone, zeranol, trenbolone and MGA.  WT/DS321/R 
Page 44 
 
 
  H. SECOND WRITTEN SUBMISSION OF CANADA  
1. Introduction 
4.227  Canada will demonstrate again that the EC's allegations under the DSU are without merit.  
The EC has recognized that the real object of these proceedings is to review the compliance of the EC 
measure with the recommendations and rulings of the DSB in EC – Hormones .  Canada will elaborate 
further on that issue in this rebuttal submission. 
2. The EC's claim under the DSU 
(a) Canada has not acted inconsistently with Article 23.1 of the DSU 
4.228  The EC claims that DSU Article 23.1 read "i n conjunction with" Articles 23.2(a) and 21.5 
imposes a new obligation on Canada that finds no te xtual basis, in that DSU Article 21.5 does not 
contain an obligation for any WTO Member to initia te compliance proceedings.  The EC also claims 
that Article 23.1 "in conjunction with" DSU Article s 22.8 and 3.7 removes Canada's right to act in 
accordance with the DSB authori zation to suspend concessions without multilateral intervention by 
the DSB (contrary to DSU Articles 3.2 and 19.2).  This interpretation of DSU Article 22.8 would 
render WTO inconsistent, without multilateral confirmation of the EC's compliance, a Canadian 
measure enacted pursuant to a multilateral authorization. 
4.229  Canada's continued application of an authori zed measure suspending concessions cannot be  a 
conduct inconsistent with Article 23 of the DSU si mply because the EC claims it has complied.  The 
EC's adoption and subsequent notif ication to the DSB of its purported implementing measure does not 
change the legal basis for Canada's measure.  Given that the EC is responsible for obtaining 
multilateral confirmation that it has complied, Cana da's conduct is not "seeking redress".  The term 
‘redress' implies a reaction by a Member against another Member, because of a perceived WTO violation, with a view to remedying the situation.   Canada's conduct is not aimed at remedying any 
perceived violations by the EC, but is based on the DSB authorization. 
(b) Canada has not acted inconsistently with Article 23.2(a) of the DSU 
4.230  Given that Canada is not "seeking redress", Canada cannot have made a "determination" 
within the meaning of Article 23.2(a) of the DSU.   That provision applies only where a Member is 
seeking redress of a WTO violation.  The panel in US – Section 301 Trade Act is the authority for this.  
(c) Canada has not acted inconsistently with Article 22.8 of the DSU 
4.231  Where concessions have been suspended on the basis of an authorization by the DSB (and 
absent a mutually satisfactory solution), the onus  is on the Member originally found to be non-
compliant to take steps to confirm multilaterally that  it has satisfied at least one of the conditions of 
Article 22.8. Without such multilateral confirmation,  the DSB authorization remains in effect and 
continues to authorize the suspension of concessions  by the original complaining Member.  The EC 
objects to this interpretation of its oblig ations on several unsustainable grounds. 
(i) The EC must confirm its co mpliance in EC – Hormones 
4.232  The result of the EC's failure to comply within  the reasonable period of time is that it bears 
the burden of demonstrating that it has now comp lied with the recommendations and rulings of the 
DSB in EC – Hormones if it wishes to have the suspension of concessions no longer applied.  Given 
that the 2003 Directive simply amends the 1996 Directiv e, a review of the compliance of this measure 
is not an abstract exercise about a review of the EC's compliance in this context.  The DSB  WT/DS321/R 
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  authorization does not provide "absolute justifica tion" for any behaviour.  Rather, until the EC 
receives multilateral confirmation that it has brought  itself into compliance, Canada is entitled to 
continue to rely upon the authorization.  The immediate threshold issue is therefore which party  bears 
the burden of confirming the compliance.  The requireme nt that the EC bear this burden if it wishes to 
have the suspension of concessions ended is simply  the logical consequence of the position in which 
the EC has placed itself in the EC – Hormones  dispute. 
(ii) Article 22.8 of the DSU is not "self-executing" 
4.233  DSU Article 22.8 cannot be "self-executing" in  the light of the overall DSU regime of 
surveillance in circumstances of non-compliance.  In  the light of the object and purpose of the DSU, 
and in the context of the other provisions re lating to non-compliance, Article 22.8 requires 
multilateral confirmation that the conditions precedent have been satisfied before the suspension of 
concessions can no longer be applied.  The aut horization to suspend concessions as a result of a 
failure to comply is granted solely by the DSB.  A subsequent, unconfirmed claim that Article 22.8 
has been met is insufficient on its own to disp lace the multilaterally-agreed surveillance regime, 
regardless of how much effort is put into the measure underlying the claim. 
4.234  The EC confuses several distinct issues relate d to "good faith" and "bad faith".  The 
suggestion by the EC that denying the presumption of compliance would be tantamount to a finding 
of bad faith should be rejected.  The issue of a presumption against bad faith is an entirely separate 
matter from that of compliance.  A finding that a Member does not comply with its WTO obligations amounts to neither an accusation nor a finding of bad faith.  According to the EC, the alleged self-executing nature of Article 22.8 is based on the degr ee to which its efforts to comply are serious and 
in good faith.  Presumably, those who do not satisfy the criteria put forward by the EC bear the burden of demonstrating compliance, whereas those who do satisfy these criteria do not.  However, the EC is 
silent on the mechanisms to determine whether a Me mber satisfies these criteria.  It is to avoid this 
kind of subjective application of "criteria" that mu ltilateral confirmation is required to give effect to 
Article 22.8.  
4.235  The adoption of a measure in one Member ca nnot be allowed automatically to render WTO 
inconsistent a measure of another Member, without so me intervening international act.  In the light of 
the overall regime of compliance, the dispute settlement system requires actual findings of 
compliance or non-compliance before Article 22.8 can be  given effect.  That the EC bears this burden 
is the consequence of the status of non- compliance in which it has placed itself.  
(iii) The DSB authorization need not be formally terminated 
4.236  The obligation to remove the suspension of co ncessions does not only arise with the formal 
revocation of the authorization by the DSB.  The more important substantive act (between the EC's 
claim of compliance and the acquisition by Canada of an obligation to remove the suspension of 
concessions) is "multilateral confirmation" that th e EC measure found to be inconsistent in EC – 
Hormones  is no longer inconsistent.  While no specific provision in the DSU requires the formal 
revocation of the authorization, this does not mean that there cannot be an act by the DSB that is 
equivalent to revoking the authorization, whether that is implicit or explicit.  The "multilateral 
confirmation" of compliance would generally come in the form of adoption by the DSB of panel 
findings of compliance. Thus "confirmation" of comp liance and the "revocation" of the authorization 
are essentially the same act of the DSB.  
(iv) The EC has several mechanisms to confirm compliance 
4.237  The EC could have obtained multilateral c onfirmation of its compliance through DSU 
Article 21.5 proceedings.  Nothing prevents the EC from initiating such proceedings.  Nor, where WT/DS321/R 
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  compliance is found, are there any limitations on the jurisdiction of such a panel preventing it from 
making recommendations to the effect that the DSB authorization should no longer apply.  
4.238  The EC may also choose to confirm its compliance in proceedings de novo , such as in these 
proceedings, in order to have the DSB authori zation terminated.  The main objective of these 
proceedings should be a review of the compliance of  the EC with the recommendations and rulings in 
EC – Hormones .  The EC bears the initial burden of proof to demonstrate compliance. 
3. The EC's compliance in EC – Hormones  
4.239  In EC – Hormones,  the EC measure was found inconsistent with the requirements of 
Articles 3.3 and 5.1 of the SPS Agreement .  The EC now asserts that it h as complied, on the basis that 
its permanent ban on oestradiol-17 β is supported by a risk assessment within the meaning of 
Article 5.1 and that its provisional ban on the othe r five hormone growth prom otants is justified under 
Article 5.7.  It has failed to demonstrate this. 
(a) The relevant international standard s and the EC's level of protection 
4.240  Pursuant to Article 3.3 of the SPS Agreement , the EC must demonstrate that there is 
"scientific justification" for its determination that international standards are "not capable of achieving 
[its] chosen high level of protection" of "zero a dditional risk".  Whereas Codex established MRLs for 
TBA and zeranol, and decided that none was necessary for oestradiol-17 β, testosterone and 
progesterone, the EC has determined that no thresh old exposure levels can be established for any of 
the six hormones when administered for growth-p romotion purposes.  Since the SCVPH opinions fail 
to identify any "additional risks" from ingestion of r esidues of the six hormones at levels that comply 
with international standards, they fail to demons trate that existing international standards are not 
capable of achieving the EC's appropriate level of protection.  The EC measure is therefore also 
inconsistent with Article 3.3 . 
(b) "Risk management" under the SPS Agreement   
4.241  The EC asserts that the risk assessment required by the SPS Agreement  is "wider in scope" 
than risk assessment techniques developed by intern ational organizations, that the latter is simply a 
scientific process, and that the former takes other factors into account at the "risk management" phase. 
The EC then submits that the three SCVPH opinions  constitute a risk assessment only in the narrow 
sense, and argues that the "wider" risk assessment in cludes the process of weighing policy alternatives 
and selecting appropriate control options.  This distinction between "ris k management" and "risk 
assessment" is problematic for several reasons.  
4.242  First, it finds no support in the SPS Agreement  or WTO jurisprudence.  The EC suggests that 
the Appellate Body findings in EC – Hormones  mean that any element of what could be called "risk 
management" is part of a "wider" risk assessment.  However, the findings cited only mean that certain 
factors cannot be excluded a priori .  Based on its misreading of the findings , the EC makes the same 
error as the panel in EC – Hormones .  Whereas the panel in that case erred in excluding certain factors 
from the risk assessment on the basis of its distinc tion, the EC now asks this Panel to include all 
factors in the risk assessment.  This is an erroneous interpretation. 
4.243  Second, the EC does not identify the "regulatory authority" responsible for "risk 
management", which policy alternatives it weighed a nd whether there is any documentation in support 
of this evaluation.  It simply asserts that its authorities decided that hormones create an "avoidable risk".  The EC has therefore not complied with  the Panel's request for documentation and supporting 
information, suggesting instead that the mandate of  the Panel is limited to reviewing the narrower,  WT/DS321/R 
 Page 47 
 
 
  scientific risk assessment.  However, all components of the wider risk assessment should be subject to 
review. 
4.244  Third, the EC inappropriately assimilates the a ppropriate level of protection, and the adoption 
of the SPS measure, directly into the risk assessmen t process.  It includes "risk management" in the 
"wider" risk assessment and then includes in "risk management" the right to set the appropriate level 
of protection and implement appropr iate control options.  However, risk management cannot be both 
part of the risk assessment and pa rt of the process of setting the appropriate level of protection and 
implementing control options.  The EC's interpre tation essentially renders meaningless the obligation 
that SPS measures be based on a risk assessment.  Th e factors that can be considered in a risk 
assessment are clear, such as those listed in  Article 5.2 and including non-scientific and non-
quantitative analysis as well as eviden ce related to misuse.  Those f actors should be assessed here and 
not some undefined notion of risk management that finds no support in the SPS Agreement . 
(c) The risk assessment and the EC's permanent ban on oestradiol-17 β 
4.245  The EC has failed to demonstrate sufficiently its claim that it has complied with EC – 
Hormones  by basing its permanent ban on oestradiol-17 β on a risk assessment. 
(i) The SCVPH opinions do not amount to a risk assessment 
4.246  The SCVPH opinions do not sufficiently complete the two-part analysis identified by the 
Appellate Body as the requirements of a risk assess ment.  Furthermore, they do not satisfy the 
requirement of Article 5.1 to take into account t echniques developed by the relevant international 
organizations, which provide context and guidan ce to the Appellate Body's two-part test.  
4.247  The EC qualifies this failure by arguing that ri sk assessments are "deterministic" and address 
poorly "non-linear" situations (presumably referring  to genotoxicity).  However, the fact that 
genotoxicity findings may change the approach ta ken in a risk assessment does not grant the EC 
licence to avoid completely its requirement, especia lly when those findings are speculative.  Nor can 
it justify the deficiencies of the risk assessment with respect to other "linear" adverse effects.  The EC 
argues that an exposure assessment is unnecessary wh en the data are unavailable, but its own 
scientific studies generated exposure data , finding that exposure to oestradiol-17 β from meat from 
treated animals amounted at most to 16.6 percent of the ADI.  In any event, other reputable scientific 
bodies have conducted complete ri sk assessments without encoun tering the limitations expressed by 
the EC. 
4.248  The EC then claims the "table of contents" of the 1999 SCVPH opinion demonstrates that it is 
a risk assessment.  Without any clear explanation by  the EC, the table of contents is an unhelpful 
guide to understanding whether the SCVPH conducted a hazard characterization or a risk characterization.  The EC points only to two excerpt s that are summaries of the SCVPH's genotoxicity 
hypothesis and its speculation about the consequen ces.  Neither excerpt amounts to a qualitative or 
quantitative evaluation of the nature of the adverse effects. 
4.249  The SCVPH fails to conduct a dose-response as sessment due to its conclusion that no 
threshold level can be established for genotoxic meta bolites or for substances which might have other 
adverse effects.  It provides no justification for its a priori  rejection of the widely-accepted view that 
adverse effects arising from hormonal activity ar e dose-dependent.  The EC defends the SCVPH on 
the basis that international risk assessment t echniques only recommend such an assessment, but its 
obligation is to base its measure on a risk assessment that complies with the SPS Agreement .  The EC 
refers to a reference in EC – Hormones to "qualitative assessment" to suggest that quantitative 
analysis is not required at any stage of its risk assessment.  However, the Appellate Body found that a 
risk assessment need not identify a minimum, quantif iable magnitude of risk; it did not suggest that a WT/DS321/R 
Page 48 
 
 
  risk assessment could be conducted without any empi rical evidence related to dose-response.  An 
evaluation of the potential occurrence of adverse e ffects would seem nearly impossible without some 
idea of the dose of a substance required to provoke an adverse effect.  A qualitative assessment is not 
simply a licence to substitute speculation a nd hypotheses for objective scientific analysis. 
4.250  The SCVPH also failed to conduct an exposure assess ment, yet the lack of data on residues in 
meat does not prevent it from drawing definitive conc lusions about the risks arising from exposure to 
hormone residues from treated meat.  The EC argues instead that its risk assessment was not required 
to conduct an exposure assessment in the light of the EC's decision to allow "zero additional risk". 
Since the EC has identified that hormones in genera l have adverse effects, and since consuming meat 
from treated animals presumably leads to higher in takes of hormone residues, consuming meat from 
treated animals must generate "additive risks", which according to the EC is all that is required.  The 
EC does not demonstrate that hormone residues from meat from treated animals on their own create 
risks, nor does it identify the risks to whic h these hormones are said to be "additive". 
(ii) The genotoxicity findings of the risk assessment 
4.251  On the basis of the SCVPH's conclusion that oestradiol-17 β is genotoxic, the EC rejects other 
international scientific bodies' findings, ignores curre nt international standards, discounts traditional 
risk assessment techniques, characterizes hazards  without assessing dose-response data, dismisses 
traditional scientific understanding about the bioavailability of oestradiol-17 β, refuses to establish a 
dose-threshold level, and declares irrelevant the fact  that growth promotants are used in low doses in 
animals.  However, the SCVPH conclusion on the genotoxicity of oestradiol-17 β is not supported by 
the evidence. 
4.252  First, the SCVPH acknowledges that its conclu sion that one single reactive metabolite of 
oestradiol-17 β can damage DNA and lead to tumour initiati on is simply a hypothesis.  Its conclusion 
disregards established evidence that  bodily mechanisms exist to control the formation of potentially 
genotoxic metabolites in vivo  and to eliminate DNA adducts.  Considering the SCVPH's 
acknowledgement that it has no "data on the genotoxic  effects of exogenous low-dose oestrogens", its 
genotoxicity conclusion amounts to merely the identification of theoretical risk. 
4.253  Second, other scientific and regulatory authorities have all indicated that the SCVPH's 
genotoxicity conclusion is more theory than rea lity.  While acknowledging the "genotoxic potential" 
of oestradiol-17 β, JECFA found this would not occur in vivo at physiological concentrations.  The 
CVMP and the Veterinary Products Committee bot h concluded that there is no evidence that 
oestradiol-17 β is genotoxic.  In 2005, The Veterinary Products Committee agreed that oestradiol-17 β 
may have genotoxic potential in theory, but found th at there was a "threshold for carcinogenicity". 
The Australian Department of Health and Ag eing found that even though oestradiol-17 β may have 
genotoxic potential there is " no evidence that these occur in vivo at levels that would outstrip normal 
DNA repair mechanisms."  
4.254  Third, the EC does not appear to believe that oestradiol-17 β is genotoxic.  Despite the EC's 
decision not to allow exposure to even one molecule of oestradiol-17 β from meat from treated 
animals, it is strikingly silent on potential ri sks arising from all other sources of oestradiol-17 β.  The 
EC defence of zootechnical and therapeutic uses of oestradiol-17 β is a response one would expect to 
dose-dependent adverse effects.  The one single mole cule from meat derived from treated animals that 
the EC considers so dangerous is suddenly not at all dangerous  when consumed from meat from 
animals treated for other purposes.  The risk of a dverse effects from the genotoxicity of oestradiol-17 β 
residues in meat from treated animals is more "t heoretical uncertainty" than real-world risk. 
Theoretical uncertainty is not the kind of risk to  be evaluated in a risk assessment, and the EC's 
genotoxicity conclusions cannot be used to warrant its measure.  WT/DS321/R 
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  (iii) The risk assessment is not "sufficiently specific" 
4.255  The SCVPH opinions do not assess the specific ri sks associated with hormone residues in 
meat derived from treated animals, claiming th at general evidence of hormone metabolites' 
genotoxicity renders specific evidence of residue genotoxicity unnecessary.  Not only is there no convincing evidence of genotoxicity, but the specificity requirements in EC – Hormones cannot be so 
summarily disregarded.  Even if the SCVPH's hypo thesis is accepted, the SCVPH must confirm that a 
single reactive metabolite will actually result fro m low doses received from meat from treated 
animals. Instead, the EC's studies fail to find evidence of such metabolites. 
4.256  The EC defends the SCVPH's failure to evaluate the dose of residues from meat from treated 
animals by stating that low dose is not relevant, and by asserting that the SCVPH did "take into account" the dose.  However, it provides only the SCVPH's estimates of how much residue of oestradiol-17 β will be consumed through animal tissues, without assessment of whether these residues 
create any specific risks.  The SCVPH's assessmen t of hormone exposure from treated animals is 
therefore mere speculation about what these specific risks might be. 
4.257  The EC further argues that it is necessary only "in principle" to assess the specific risk, that 
there are "important qualifications" to this obligat ion, that it cannot assess the specific risk due to the 
difficulty in estimating intake of residues from me at, and that it cannot estimate intake due to the 
variability of consumer exposure patterns and the lack  of information about good veterinary practices. 
Not daunted by the absence of this evidence, the EC concludes by sp eculating that the only rationale 
that can be inferred from the available scientific data  is that the higher the exposure to residues from 
these hormones, the greater the risk is likely to be. 
(iv) Adverse effects from misuse and misplaced hormone implants 
4.258  The EC disagrees with international standards, c iting concerns about the difficulty in ensuring 
they are administered according to good veterinary practice.  It has not provided a risk assessment 
evaluating the existence and level of risk arising from the potential for failure to comply with such 
practice.  Instead, it refers to studies which purport edly formed the basis of  the SCVPH's conclusions 
that implants are misused or misplaced "frequently" or "in daily routine", although such studies merely involve "experiments" addressing whether consumers would be exposed to higher doses of 
residues if hormone implants were misused.  They  address neither the actual occurrence of misuse, 
nor whether misuse would increase the potential occurre nce of adverse effects.  They also indicate 
that under misuse conditions, intake of hormone r esidues remains well below established ADIs.  The 
EC only speculates that abuse leads to an increase in the potential o ccurrence of adverse effects.  A 
risk assessment cannot be based on speculation about theoretical risks, but must address risks in the 
real world. 
(d) The provisional ban is inconsiste nt with Article 5.7 of the SPS Agreement   
(i) Article 5.7 is not a "special regime" 
4.259  The EC's claim that Article 5.7 is a "special  regime in relation to Article 5.1 of the 
SPS Agreement  " and that it is for the party alleging a violation of Article 5.7 to make a prima facie 
case of non-compliance is without merit.  The Appellate Body has found that the party that wishes to 
rely on the exception of Article 5.7 has the bur den of showing that it has met its conditions. 
4.260  Article 5.1 is a specific application of the b asic obligation contained in Article 2.2 of the 
SPS Agreement  not to maintain SPS measures without sufficient scientific evidence.  A WTO 
Member adopting an SPS measure that results in a higher level of protection than would be achieved 
through a measure based on the relevant internati onal standards must satisfy the requirements of WT/DS321/R 
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  Article 5.1. Where a measure is not based on a risk assessment, a Member may justify its measure 
under Article 5.7 of the SPS Agreement  on the basis that insufficient scientific evidence exists to 
perform an adequate risk assessment. 
4.261  The recommendations and rulings of the DSB requi re that the EC base its measure on a risk 
assessment in accordance with the requirements of Article 5.1 of the SPS Agreement .  The EC cannot 
circumvent this obligation by characterizing its meas ure with regard to five of the hormones at issue 
as "provisional" and then claiming that this "provision al" measure is subject, not to Article 5.1, but to 
the "special regime" of Article 5.7, which is "not  covered by the rulings and recommendations of the 
DSB".  Given that the EC has invoked Article 5.7 to  justify its non-compliance with Article 5.1, it 
must bear the burden of demonstrating that the requirements of Article 5.7 have been fulfilled. 
(ii) The relevant scientific evidence  
4.262  The four requirements of Article 5.7 are cumula tive in nature.  The first one functions as a 
threshold requirement because Members may only  adopt provisional measures "[i]n cases where 
relevant scientific evidence is insufficient". 
4.263  To date, none of the reasons given by the EC  explains in a convincing manner why the 
relevant scientific evidence is "insufficient" to allow the performance of an adequate assessment of 
risk.  The EC takes issue with the risk assessments conducted by JECFA on the safety of the five 
hormones when used according to good veterinary pr actices because it alleges that it could not review 
the "basic information and raw data" underlying JE CFA's conclusions.  However, the majority of 
these data is in the public domain. Although the EC co mplains that Canada did not provide it with the 
scientific studies and data underlying its decision to  authorize the use of these five hormones, Canada 
provided the EC with the full names and addresses of each of the firms with proprietary rights to the information the EC had requested.  To date, the EC has provided no confirmation that it has contacted 
these firms. 
4.264  The EC also takes issue with JECFA's conclusi ons as to the safety of the five hormones when 
used in accordance with good veterinary practice,  by asserting that JECFA's recommendations could 
not achieve the level of health protection considered  appropriate by the EC.  The EC seems to suggest 
that it has conditioned its ability to conduct a ri sk assessment on these five hormones on whether the 
available scientific data from JECFA and other sources meet its appropriate leve l of protection.  There 
is no basis for this approach in the text of the SPS Agreement  or WTO jurisprudence.  The EC 
confuses the notion of the insuffici ency of the relevant scientific  evidence with a WTO Member's 
right to establish its own appropriate level of protection. 
4.265  The ability to conduct a risk assessment cannot hinge on a Member's appropriate level of 
protection.  Such an approach undermines the basic logic of the SPS Agreement .  The EC's approach 
would allow Members arbitrarily to set their level of  protection so high that they could effectively 
exclude from the pool of relevant scientific evid ence any evidence that does not meet their chosen 
level of protection. 
4.266  The Appellate Body has confirmed that Article  5.7 is intended to address "situations where 
little, or no, reliable evidence [is] available on the subject matter at issue".  The EC has not 
demonstrated why it considers that the vast body of relevant scientific evidence on the safety of these 
five hormones from reputable sources such as JECFA and Codex have yielded unreliable scientific 
evidence.  The EC also suggests that  the simple passage of time is sufficient to invalidate previously-
held scientific opinions but it does not provide any reasons why the JECFA studies or the Codex Standards should now be cons idered to be unreliable.  WT/DS321/R 
 Page 51 
 
 
  4.267  The EC has misconstrued its obligations under the SPS Agreement  and has failed to establish 
that there is insufficient scien tific evidence to conduct a risk assessment on the five hormones 
concerned. 
(iii) Available pertinent information 
4.268  Under the second requirement of Article 5.7 of the SPS Agreement , Members may only 
provisionally adopt SPS measures "on the basis of availa ble pertinent information, including that from 
relevant international organizati ons as well as from sanitary or phytosanitary measures applied by 
other Members". 
4.269  The EC has acknowledged that the risk asse ssments conducted by JECFA concerning the 
safety of these five hormones constitute "available pe rtinent information" that must be taken into 
account by the EC.  The EC recognizes that there must be an "objective relationship" between the SPS measure at issue and the available pertinent informati on.  However, the EC fails adequately to explain 
why it is imposing a "provisional" ban in the face of the safety assessments by JECFA and 
international standards adopted by Codex that  attest to the safety of these substances. 
4.270  The EC asserts erroneously that a Member may disregard the results of the risk assessments 
performed by the relevant international organiza tions because the Member concerned requires more 
information in order to meet a higher level of protection.  This assertion stems from the EC's 
propensity to use its chosen level of protection to  avoid its obligations under Article 5.7 of the 
SPS Agreement .  This Article applies in cases where no ri sk assessment can be performed due to the 
lack of relevant scientific evidence.  Therefore, the EC cannot claim that this provision entitles it to 
disregard scientific evidence from relevant intern ational organizations on the basis that the EC 
requires "more information" in order to  meet a higher level of protection. 
4.271  Thus, the EC has failed to demonstrate that ther e is a rational relationship between its ban on 
the five hormones in question and the available pe rtinent information from JECFA, Codex and other 
sources. 
(iv) Additional information and review  
4.272  Pursuant to the third and fourth requirements of Article 5.7, a Member may not maintain a 
provisional measure unless it: (1) seeks to obtain th e additional information necessary for a more 
objective assessment of risk and (2) reviews its measure based on this new information within a 
reasonable period of time.  Thus, Article 5.7 impo ses a burden on Members to make active efforts to 
gather the additional information necessary for th e performance of a full risk assessment and then 
review the appropriateness of their measure within a reasonable period of time. 
4.273  While the length of the reasonable period of  time to review a provisional SPS measures may 
vary from case to case depending on the difficu lty in obtaining additional information and the 
characteristics of the SPS measure at issue, Cana da disagrees with the EC's suggestion that a 
Member's domestic legislative procedures may have an impact on the determination of the reasonable 
period of time. 
4.274  It is a well-established rule of customary inte rnational law that internal law may not be 
invoked as justification for the failure to perform a treaty obligation.  Accordingly, the length of the 
EC's domestic legislative process should not be a factor considered in the establishment of the 
reasonable period of time to review a provisiona l SPS measure.  In cases where a Member imposes a 
total import ban, the reasonable period of time to review the measure should be such as to minimize 
the extent of the trade impact of this measure. WT/DS321/R 
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  4.275  The EC has provided no explanation as to if and how it is seeking any additional information 
concerning the safety of these hormone s and how it has reviewed its measure accordingly in the two 
years since the adoption of its new directive. 
4. Conclusion 
4.276  For the reasons stated in Canada's rebuttal subm ission and those contained in Canada's earlier 
submissions, Canada respectfully requests that the Panel reject the EC's claims. 
I. ORAL STATEMENT OF THE EUROPEAN COMMUNI TIES ON EXPERTS OPINIONS DURING THE 
SECOND SUBSTANTIVE MEETING  
4.277  There are certain "procedural" aspects to th is expert meeting which the European 
Communities would like to comment on before turning to  the substantive results of this meeting.  As 
you are well aware, the European Communities, during the selection process last year, had objected to 
the selection of Drs. Boobis and Boisseau as experts to  this Panel.  This mainly, because both have 
been involved in drafting and adopting the very  same risk assessment s which the European 
Communities has not accepted as valid basis for its me asures regarding hormone treated beef, that is 
JECFA's risk assessments.  The European Commun ities' concern was that Drs. Boobis and Boisseau 
would lack the objectivity required to give the Panel the advice needed to make an objective 
assessment of the facts in this dispute.  Last week 's meeting has confirmed that this concern was more 
than justified.  It is unavoidable what Drs. Boobis and Boisseau have done, namely to defend the 
conclusions of the risk assessment they were invol ved in against any alternative conclusions which 
the EC's risk assessment has come to.  We do not  blame them for doing so. However, we do believe 
that their obvious partiality was not only unacceptable for the purpose of the role of experts in this 
dispute, it also made it necessary, at times, to enter into technical scientific discussions that we would 
probably all have rather avoided.  
4.278  The European Communities does not wish to discr edit in general the work which is done by 
JECFA and Codex, nor does it believe that these latter would wish to put into question in any way the 
EC's sovereign choices on the desired level of hea lth protection.  This is not a case "EC against 
JECFA".  This is a case between Members of the WTO and it currently turns on the question whether 
a WTO Member has legitimately relied on its right under the SPS Agreement to base its measures on 
its own assessment of scientific evidence and ava ilable pertinent information, assessment which may 
deviate from that performed (but not necessarily adop ted) by an international standard setting body.  
Objective expert advice of the kind that came from Drs. Guttenplan, Cogliano, Sippell and De 
Brabander, can explain what the scientific positions on eith er side are.  It is not helpful, therefore, to 
have had (not only one but even tw o) scientific experts at this m eeting who considered themselves to 
be representatives of JECFA.  
4.279  It is not helpful either to have had JECFA representatives at this meeting who considered 
themselves to be scientific experts.  Both Dr. Tritsch er's and Dr. Wennberg 's role would have been to 
provide, in their capacity as secretaries to JECFA, factual information on how JECFA works, the way 
Dr. Miyagishima did for Codex.  Instead, both have  repeatedly overstepped their role and ventured 
into statements on the substance of the scientific i ssues.  Although we are, for example, quite grateful 
for Dr. Tritscher's indiscretion on the origin of JECFA's reference to "potential genotoxicity" (she 
stated that it was because JECFA felt there was scie ntific uncertainty), we do not think that it was 
appropriate for her to provide information on the su bstance of the science or to assume the role of 
defending the substance of JECFA's work.  And we certainly feel that Dr. Wennberg would have done 
better not to intervene on the issue of residue da ta used in the 1999 evaluation (on which she was 
obviously not informed) or to keep  her opinion, for example on Radio Immuno Assays, to herself.    WT/DS321/R 
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  4.280  Let me end my comments on the procedural aspect s of this expert meeting here by inviting 
the Panel to take them into account when it assesses all the different advice it has been given at this 
meeting. 
4.281  I will now turn to the substantive results of this  meeting and place them in the legal context.  
For the sake of this discussion, the European Communities accepts for a mo ment the assumption that 
your task in this dispute is indeed to assess whethe r measures taken to comply with DSB rulings and 
recommendations are consistent or not with Articles 5.1 and 5.7 of the SPS Agreement .  However, we 
will come back to this at a later stage. 
4.282  The United States and Canada claim that the Eu ropean Communities has violated Article 5.1 
of the SPS Agreement  in re-adopting its ban on oestradiol-17 β for growth promotion purposes. (I'll 
open a parenthesis here: this is not quite the way th ey put it as they believe the burden of proof is on 
the EC to demonstrate compliance.  However, the EC  strongly rejects this point, and I will also come 
back to that later. Fact is that they have raised  a number of arguments as to why the EC allegedly 
violated Articles 5.1 and also 5.7 and therefore is not in compliance).  
4.283  They argue essentially on two levels.  First, that there is no risk assessment, supposedly 
because the EC Opinions of 1999, 2000 and 2002 fa iled to perform the second and third of the four 
steps usually done in a risk assessment on subs tances of this kind by the members of Codex 
Alimentarius Commission.  Second, that the evidence put forward by the EC allegedly does not 
support the ban.  
4.284  Last week's expert meeting has yielded a wealth  of information which is crucial to dealing 
with these two levels of argument.  Rather than repeating all the legal arguments as set out in our 
submissions, I will concentrate on where the scientif ic advice you got helps to clarify the issues. 
4.285  On the first level of argument, we learned from the rather unisono statements of the experts.  
We have learned that while everyo ne (including the European Comm unities) accepts that in a risk 
assessment you may proceed in the four steps of hazard identification, hazard characterization, 
exposure assessment and risk characterization, you onl y do that to the extent possible and necessary. 
In other words, how you proceed exactly is a functi on of the data you have av ailable and of how your 
risk assessment is framed, namely by the mandate you have received from the risk manager.  Thus, 
we learned from Drs. Boobis and Cogliano that data  are never complete, but are or are not sufficient 
for the purpose of completing a risk assessment.  We learned that this is a matter of judgment 
involving considerations on what sort of possible ga p/uncertainty/insufficiency we are dealing with 
and whether that can be dealt with through interp retation or bridging tools such as safety factors and 
assumptions, or not.  Most importantly, however, we learned that this judgment is informed – indeed, is framed – by the risk manager .  It is the risk manager, as Dr. Miyagishima pointed out, who decides 
whether or not to carry out an evaluation and who factors into that decisi on the question of whether 
there are sufficient data.  I draw your attention in th is context to paragraph 19 of the Codex draft Risk 
Analysis Principles for the CCRVDF, which are about to  be adopted.  Paragraph 19 specifies that it is 
for the CCRVDF to provide "a qualitative prelimin ary risk profile as well as specific guidance [to 
JECFA] on the CCRVDF risk assessment request."  
4.286  
Finally, it is the risk manager, as several e xperts repeatedly confirmed, who decides on the 
acceptable level of risk, in other words on the level of  protection.  This informs for example concepts 
such as that of "appreciable risk", as Dr. Guttenplan e xplained in reply to your question.  Let us not go 
into the whole concept of risk communication, but it is important for you to understand that risk assessors and risk managers – as two different instances of a risk analysis process – do not make 
decisions in isolation from each other.  This has al ready been confirmed by the Appellate Body in the 
1998 Hormones  report. WT/DS321/R 
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  4.287  This brings us back to the famous four st eps of the risk assessment. If there is a risk 
management decision that the intended acceptable level of  risk is "additional risk to the extent such a 
risk is judged ‘insignificant' or ‘non appreciable,'" here is what you do as a risk assessor: once you have identified that there is the possibility of an adverse effect, you go on and calculate whether and at 
what threshold the risk becomes "non appreciable" using safety factors and whatever other tools you have available to bridge possible gaps of  knowledge.  This is what JECFA has done.  
4.288  If, on the other hand, there is a risk manageme nt decision that the intended acceptable level of 
risk is "no additional risk," the situation is diffe rent: as a risk assessor, once you have identified the 
possibility of an adverse effect and the possibility of  its occurrence in real life, there is no point in 
going on and calculating a threshold, as no additiona l risk, however minimal, would be accepted.  As 
a risk assessor you have done enough for the purposes of the risk assessment that  the risk manager has 
asked from you.  Essentially (I am saying essentia lly because the European  Communities, as even 
Dr. Boobis had to confirm, has actually quantified exposure to the extent possible) this is what the EC 
risk assessors have done. Your e xperts have confirmed this, not least Dr. Boobis, who first advised 
you that the European Communities had not carried out a proper risk assessment and then qualified 
his reply by stating that it was based on the assumpti on that a threshold would apply.  Where this is 
not the case, so he explained last week and in hi s written replies to Questions 11, 19 and 37, the 
remaining steps after hazard identification look quite different.  In particular, a dose response 
assessment is unnecessary (see in particular reply to Question 37).  However, as to what exactly the 
remaining steps are supposed to look like in a non- threshold scenario, neither Dr. Boobis nor the other 
experts gave you clear advice on that question.  Y ou heard statements that the European Communities 
failed to present new residue data or failed to refer to the problem of endocrine effects in its risk 
assessment or failed to present evidence on in vivo genotoxicity, all of which the European 
Communities proved to be wrong by pointing the Pa nel to the exact page where this issue was 
discussed or a study was referred to in the EC Op inions.  Frankly, Chairman, one might choose to 
disagree with the conclusions the EC has come to, but to claim that the EC has not carried out a 
proper risk assessment is a bit of a joke, obvious to anyone who has actually taken pains to read the 
EC risk assessments (and, if I may add, to comp are them to other relevant risk assessments).  
4.289  So let me turn to the second level of argumen t, which turns on whether the evidence presented 
by the European Communities supports  – or, as the Appellate Body would put it – sufficiently warrants a prohibition on oestradiol-17 β.  Chairman, I could go back to the details of all the adverse 
effects that the EC risk assessment h as identified and that were at least in part discussed at last week's 
meeting.  I could now launch into discussing everyt hing that was said about old and new residue data, 
old and new detection methods, good veterinary  practice and abuse, hormonal development of 
children and the value of epidemiological studies.  But I think there is probably no better way of 
putting in a nutshell the controversy at the heart of this debate than the way Dr. Cogliano has done it. 
He said essentially "at the heart of the scientific disagreement here is the interpretation of data. 
JECFA's assessment felt that a threshold could be assumed even if there was some evidence on 
genotoxicity.  Therefore they assumed there was a thres hold.  It seems to me that the EC is unwilling 
to assume a threshold, because of genotoxicity and b ecause of low dose response and the fact that the 
shape of the curve cannot be defined with certainty .  Those are the scientific arguments on both sides 
– depending on how you phrase the question, you will get a response of yes or no."   On the question, of whether this disagreement is arbitrary or unreasona ble, Dr. Cogliano answered by stating that "this 
is a longstanding area of disagreement for scientists since many years, the reason for the controversy 
being the assumptions that scientists bring to the risk assessment.  It is an area of legitimate 
disagreement." 
4.290  Even Dr. Boobis, who may have wanted to make you believe that JECFA's – that is: his – 
interpretation of the data is the only reasonable inte rpretation, had to concede that both genotoxicity 
and low dose response are issues that are a long way from being resolved.  What better way to 
demonstrate this than the vivid debate betw een Dr. Guttenplan and Dr. Boobis on proof of in vivo   WT/DS321/R 
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  genotoxicity?  What better way to say it than Dr. Bo obis' reply to the EC expert's intervention on low 
dose response, when he stated "this is a major issue of scientific controversy.  Dr. Vom Saal can point 
to so many papers which support his argument, but currently this is not resolved in the scientific 
community." 
4.291  I could add to this now an account of the many things that were said last week about pre-
pubertal children, where the advice you received from the Panel's experts ranges all the way from 
warning you not to feed your children broccoli (Dr. De  Brabander) to stating that there is no problem 
whatsoever for hormonal substances despite eviden ce demonstrating that JECFA's calculations on 
endogenous production of hormones are actually wrong (Dr. Boobis).   
4.292  But the point can already be made: what you shou ld take away from last week's meeting is the 
following: First, the European Communities bases itself on evidence wh ich well respected scientists, 
including some of your own experts (Drs. Guttenpl an and Cogliano) understand to demonstrate direct 
genotoxicity of oestradiol-17 β.  Direct genotoxicity, not only for the EC risk manager but actually for 
most risk managers in this world (see Dr. Boobis' reply to Question 11) is a reason not to accept any 
added risk and therefore to decline setting a thr eshold.  Second, the European Communities bases 
itself on evidence which is read by respected scien tists – and, apart from Drs. Cogliano and Sippell 
this may well include most endocrinologists in the world – to mean that one actually knows precious 
little about what hormonal substances do at low doses, and in particular, what they do to especially 
sensitive populations such as pre-pubertal children.  For the EC risk manager, and this may well be a 
position not shared by the risk mana gers in the US and Canada, this is a reason to decline setting any 
threshold.   
4.293  The European Communities considers that it is not for this Panel to enter into the deep 
scientific theories and try to resolve the scientific controversies, to which you have become witnesses 
last week. The scientists have not managed to resolve it and you will not be able to do it with the legal 
provisions and tools you are supposed to apply here.  Indeed, you are not asked to now come down on either side of the debate, apply your own – as Dr. Boobis would put it – "weight of evidence" 
approach, provide your own interpretation of how the data should be read.  It is sufficient for you to 
ascertain that there is a genuine divergence of sci entific opinions here, which may indeed – as the 
Appellate Body has put it – "indicat e a state of scientific uncertainty"
19 and that the European 
Communities has relied on – and I quote the Appe llate Body again – "divergent opinion[s] coming 
from qualified and respected sources"20 as your own experts have confirmed.  The US and Canada 
may think that this source may not (yet) represent "mainstream" scientific opinion (although one may 
well argue that there is at least equal balance betw een the different opinions) but this, as the Appellate 
Body teaches us, "does not necessarily indicate th e absence of a reasonable relationship between the 
SPS measure and the risk assessment, especially wh ere the risk involved is life-threatening in 
character and is perceived to constitute a clear a nd imminent threat to public health and safety."21 
There is no other indication that the European Communities may not have acted in good faith (may those who cherish protectionist theories go back to reading what the Appellate Body had to say about 
that).
22  Therefore, Chairman and Members of the Panel,  your conclusion must be that the EC's risk 
assessment sufficiently warrants – that is to say reasonably supports – its  ban on Oestradiol-17 β.    
4.294  This concludes my comments on the United States' and Canada's claim that there is a 
violation of Article 5.1 of the SPS Agreement as regards the EC's implementation measure on 
Oestradiol-17 β.  I should add that this also deals with the rather vague claim made by the United 
States and Canada that there would also be a violation of Article 3.3 of the SPS Agreement.   "Vague" 
                                                      
19 Appellate Body Report on EC – Hormones , at para. 194. 
20 Ibid. 
21 Ibid. 
22 Appellate Body Report on EC – Hormones at para. 245. WT/DS321/R 
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  because it is not clear what they would be relying on with regard to oestradiol-17 β.  The standard 
adopted by Codex on this substance dates back to 1988 and is outdated, not only in the EC's view but 
also in the view of Codex' own scientific comm ittee JECFA, which has re-evaluated the substance 
since.  However, JECFA's updated assessment of 19 99 has never been adopted as a standard.  In any 
event, as is clear from the above, the European Co mmunities who has a scientific justification not to 
base itself on the Codex standard, and also (not "or")23 has a higher level of protection than that 
implied in the Codex standard, acted c onsistently with Article 5.1. of the SPS Agreement.   Therefore, 
there is no violation of Article 3.3. 
4.295  Let me turn to the European Communities pr ovisional ban on the other five substances, 
progesterone, testosterone, zeranol, trenbolone acetate and melengestrol acetate (MGA).  With regard to that measure the United States and Canada claim that there is a violation of Article 5.7 of the SPS 
Agreement.  I will not go back to all legal arguments that have been exchanged between the parties on 
the four conditions that Article 5.7 of the SPS Agreement requires, but will instead concentrate on 
what the expert meeting has yielded in this regard, which mainly relates to the issue of sufficiency.  
4.296  Obviously, you as the Panel wonder what to make of the fact that an international body such 
as Codex and its scientific committee JECFA, with regard at least to four of these substances, has considered that there is sufficient  evidence to come to a conclusion on them, while the EC claims that 
this is not the case. 
4.297  This brings us back to the debate touc hed upon earlier about completeness of data, 
sufficiency, gaps and scientific uncertainty.  For all of those among us lawyers who love to think in 
clear cut-categories, this is a bit of a disappointme nt.  The world of science clearly does not think in 
terms of definitive and provisional measures, of suffi ciency and insufficiency of evidence.  Data are 
never complete, as we learned; whether you can come to definitive conclusions on a risk assessment is 
a function of what data you have and how your risk  assessment has been frame d by the risk manager. 
Dr. Boobis, who emphasised several times how care ful he was about choosing his words, certainly 
was careful when replying to the question of whethe r it was possible to complete a risk assessment on 
the five substances.  He agreed  with the European Communities th at this was a question of risk 
management and then stated: "I can  only speak for JECFA, not for th e EC, we considered the data to 
be sufficient."  Indeed, he speaks for a different set  of data and against the background of a different 
decision on acceptable level of risk/intended level of protection!  The EC's scientific committee 
worked on the basis of the most up to date resear ch on these substances and against the background of 
the risk manager's decision not to accept any add itional risk from residues in hormone treated-meat. 
Under these circumstances, the EC scientific committ ee, in the face of evidence indicating that there 
may be risks with regard to genotoxicity and in li ght of the scientific uncer tainty regarding the low-
dose response problem, was careful to conclude only provisionally on the existence of a risk, and to 
recommend further research.  Who would have prefe rred a bold conclusion based on all sorts of gap-
bridging assumptions, that these substances present a ri sk, and on the basis of that a definitive ban 
adopted by the EC regulator?  
4.298  This concludes my remarks on the Article 5.7 cl aim, which has been shown to be unfounded.  
Let me add a brief remark, once again on the Article 3.3 claim made by the United States and Canada.  
The United States and Canada are relying on standa rds for zeranol and trenbolone acetate adopted in 
1988, which are as outdated as the standards for prog esterone and testosterone also dating back to 
1988.  Again, as is clear from the above, the Eur opean Communities who has a scientific justification 
not to base itself on the Codex standard, and also a hi gher level of protection than that implied in the 
Codex standard, acted consistently with Article 5.7 of the SPS Agreement . Therefore, there is no 
violation of Article 3.3. 
                                                     
 
23 As the Appellate Body has put it so delicately, "Ar ticle 3.3. is evidently not a model of clarity in 
drafting and communication", see Appellate Body Report on EC – Hormones , para. 175.  WT/DS321/R 
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  4.299  These remarks of the European Communities attempted to help you place the results of last 
week's experts' meeting in the context of your  analysis on the relevant provisions of the 
SPS Agreement .  Before turning to my reservation on that ex ercise, which I stated in the beginning, let 
me make one final remark.  It seems  fashionable, in the debate on the SPS Agreement , to raise the 
spectre of regulators who close off their markets by  putting never ending demands for more evidence 
on scientists on the basis of a declared need to pr ove safety.  There is a danger for abuse of the 
SPS Agreement  in this respect, no doubt.  But there is a nother spectre out there, which is equally 
haunting: that the SPS Agreement  would be abused by those who value market profit over safety.  
That those who do not bother to look into possible hea lth concerns, referring, at best, to industry data 
that no member of the public has ever seen, woul d benefit from some sort of presumption of being 
right under the SPS Agreement .  
4.300  With this, I have ended my opening remarks on the outcome of the expert hearing.  Now, with 
regard to my earlier reservation: Chairman, we want  to raise the question with you, why it is we are 
going through this exercise of looking into a violation of the SPS Agreement .  As suggested in your e-
mail we will come back to this issue in the sec ond part of our opening statement when we discuss 
legal issues.   
J. ORAL STATEMENT OF CANADA ON EXPERTS OP INIONS DURING THE SECOND SUBSTANTIVE 
MEETING  
1. Introduction 
4.301  Canada considers that the conclu sions to be drawn from the expe rt meeting are that the ban on 
oestradiol-17 β is not based on a risk assessment and the evidence is sufficient to conduct a risk 
assessment for the other five hormones.  Canada und erstands that, in discussi ng the experts' advice, 
the parties may not introduce new ev idence into the record and furthe r that any statements made by 
the disputing parties' own experts should be vi ewed and assessed as an argument of the party 
concerned, rather than as evidence contai ned in free-standing scientific testimony.  
4.302  The experts' advice is particularly pertinent wh ere it addresses the scientific questions that are 
within the legal framework of this dispute, na mely, whether the EC's ban on meat from animals 
treated with oestradiol-17 β is based on a risk assessment appropriate to the circumstances, and 
whether there is sufficient scien tific evidence to conduct a risk  assessment for the other five 
hormones.  The advice from the Experts on these clai ms was that the EC's risk assessment was not 
appropriate to the circumstances and that there is sufficient evidence to conduct a risk assessment for 
the other five hormones. 
4.303  In light of the sensitivities surrounding public health and safety aspects of this case, the 
Experts' role was more significant than the legal ques tions imply.  It is not the role of the Panel or 
even the Experts to pass judgment on the safety of the hormones, but this case also does not consist 
entirely of technical legal questions.  These hormones have been studied extensively, and the studies 
demonstrate that they do not pose any real-world ri sk to human health and safety.  Also, science 
evolves, methodologies and techniques improve, con ceptions change, appreciation of hazards and 
risks in our environment alters, but no credible evidence has brought into question the safety of these 
hormones.  Further, in the face of scientific uncerta inty, inquiry does not end and public health is not 
managed on the basis of anecdotal observations, sp eculation and fear. Finally, risk assessors have 
developed rigorous, reliable and recognized ways to handle uncertainties responsibly. 
4.304  The importance, therefore, of the contribution of  the Experts is that they have collectively 
underlined and stressed these simple facts and have firmly deflected the EC's assault on the integrity 
of scientific methodologies and techniques that under lie all scientific inquiry  and of organizations 
such as JECFA and Codex.  The EC's claims to th e contrary notwithstanding, even in the absence of WT/DS321/R 
Page 58 
 
 
  data that cannot be acquired, "with an understanding  of biology, you can responsibly conduct a risk 
assessment." 
2. The EC's risk assessments 
4.305  The Experts' advice on the two legal issues was unambiguous. The EC risk assessment is not 
a complete risk assessment; it focused on hazard iden tification, some hazard characterization and no 
independent exposure assessment.  And the evidence is sufficient for the performance of a risk 
assessment for the other five hormones. These an swers should be sufficient to complete the 
assessment of the legal issues.  Any remaining controversies have to do with matters more 
foundational and ancillary to these ba sic legal questions.  These relate to the nature of the risk 
assessment exercise in general and specific issues of  the genotoxicity and potential adverse effects on 
sensitive populations. 
3. The nature of assessing risk 
4.306  The Experts raised several issues that are re levant to evaluation of the EC's assessment, 
including the nature of risk assessment techniques and the appropriateness of these techniques in these 
circumstances. 
(a) Hazard versus risk 
4.307  Understanding the difference between "hazard" a nd "risk" leads to a better understanding of 
approaches to risk assessment and the steps within the kind of risk assessment appropriate in these 
circumstances.  This understanding also illuminates th e central deficiency of the EC's approach to 
these growth-promoting hormones. 
4.308  Calling a substance a hazard reveals something a bout its intrinsic properties, its capacity to 
cause adverse effects.  For example, some substa nces have the intrinsic capacity to cause cancer 
because of the way they interact with human cells.  The role of IARC, the US Report on Carcinogens 
(RoC) and the first step of the four-step risk assess ment technique is to identify and classify such 
substances.  However, calling a substance a hazar d says nothing about whether adverse effects will 
occur in any given scenario involving that subs tance. IARC and the RoC stop after identifying the 
hazard and provide no information on  the likelihood that any particul ar exposure to the substance will 
lead to cancer.  It is the role of other agencies to complete the analysis of risk. 
4.309  Risk is not only about whether a substance is cap able of causing adverse effects, but is also 
about identifying the likelihood that a given exposur e to a substance will ca use adverse effects. 
Whereas the identification of a hazard is a qualitativ e assessment about the intrinsic capacities of a 
substance, the evaluation of risk often involves a quantitative evaluation.  It is, therefore, not 
sufficient for the EC simply to id entify these substances as posing a h azard.  The EC's risk assessment 
must say something about the ri sks from the specific uses of the hormones as growth promoters. 
(b) Risk versus thresholds / dose-response assessments 
4.310  There are many substances for which not all expos ure scenarios lead to the quantification of 
risk, because there are exposures, known as a threshold,  below which there is no risk of adverse 
effects.  In these cases, identifyi ng a substance as carcinogenic precludes neither further evaluation of 
it nor the identification of safe exposure levels.  Th e issue is not the quantum of risk, but whether a 
given exposure may have adverse effects, which is  the role of dose-response assessments.  A dose-
response assessment allows one to "characterize a hazard" by revealing the dose required for adverse effects to occur.  WT/DS321/R 
 Page 59 
 
 
  4.311  For substances known to be carcinogenic through a direct genotoxic mode of action it is 
assumed that there is no threshold below which no  adverse effects will occur, making a dose-response 
assessment unnecessary.  Ev en in these rare cases, however , risk assessors may conduct a dose-
response assessment because the effects of most mutations are not deleterious.  A risk assessor is not justified in skipping a dose-response assessment fo r substances known to have a threshold.  The 
Experts believed that in this case a dose-r esponse assessment should have been conducted. 
(c) Integrity of the international risk assessment system 
4.312  The scientists, regulators and administrators w ho work in the international standard setting 
system for veterinary drugs act with professionalism and integrity.  The four-step risk assessment process – hazard identification, hazard characterizati on, exposure assessment and risk characterization 
– is time-tested and universally adopted at the in ternational and national le vels.  To question these 
methodologies with respect to the evaluation of one substance calls into question the work of risk 
assessors everywhere. 
4.313  Advanced techniques, such as conservative assump tions, ensure that standards based on them 
address global regulatory needs.  The basic principle of every risk assessment is to be protective of the most sensitive sub-populations. This is accomplishe d through the use of the most sensitive adverse 
effects in identifying the threshold for adverse effect s, the use of safety factors, and overestimation of 
the intake of residues in determining exposure. 
4.314  Since science evolves and our understanding of science evolves, the risk assessment process 
remains flexible.  The fact that new questions can be raised at any time does not stand in the way of 
decision-making, but decisions remain subject to review.  Members of Codex and JECFA are invited 
to submit new data and call for a review of existing standards if they believe that they are no longer 
sufficient.  Since the Members sh are responsibility for ensuring that standards are continually updated 
to reflect emerging data, the failure of one Memb er to provide new data and seek review of an 
existing standard can not be ascribed to the failure of the standard-setting system itself. The EC has 
chosen not to avail itself of the review process for these international standards. 
(d) Scientific uncertainty, appreciable risk and zero risk  
4.315  Because science cannot guarantee with 100% certa inty that a substance will never cause 
adverse effects, risk assessments are not expressed in  terms of absolute certainty. This is not to 
acknowledge that there are risks, but to acknowledge that we can never definitively say that there are 
no risks, or that the risk is zero. This uncertainty is reflected in the term "no appreciable risk", which 
is not the subjective value judgment of the risk assessor, but simply that unknowable and 
unquantifiable residual risk inherent in living. Several Experts expressed this uncertainty in 
quantitative terms, not to quantify real risks from ve terinary drugs, but to illustrate just how small 
these risks, if any, really are. 
4.316  Risk managers who require guarantees of  "zero risk" are imposing unreasonable and 
unachievable demands. The methodologies do not ex ist to provide those kinds of assurances, 
particularly for substances that are endogenously  produced in the human body and available from 
other dietary sources.  Although uncertainty will be  present in any scientific inquiry, risk assessors 
take that uncertainty into account and, when possibl e, eliminate it.  The result is risk guarantees that 
leave room for theoretical risk, but not more. WT/DS321/R 
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  4. Specific scientific issues 
4.317  The two most significant scientific conclusions made by the SCVPH were that oestradiol-17 β 
is carcinogenic through a genotoxic mode of actio n and that there are potential adverse hormonal 
effects for sensitive populations. 
(a) Evidence of carcinogenicity through genotoxic mode of action of oestradiol-17 β 
4.318  The SCVPH declined to conduct a dose-response assessment in any of its three opinions as a 
result of its conclusion that oestradiol-17 β was genotoxic in vivo .  That conclusion is not justified by 
the available data.  It is necessary to understand th e mechanism – or mode of action – through which a 
compound can cause cancer in order to assess the ri sks. Since compounds capable of causing cancer 
through a hormonal mode of action exhibit a threshold below which can cer will not occur, the risk of 
cancer is dependent on exposure at doses hi gher than the threshold.  It is not  in dispute that 
oestradiol-17 β is carcinogenic through a hormonal mode of acti on, for which there is a threshold.  It is  
disputed that oestradiol-17 β is also carcinogenic through a genotoxic mode of action. 
4.319  While there is evidence from in vitro studies that oestradiol-17 β has "genotoxic potential", to 
conclude that it is carcinogenic through a genotoxic mode of action requires confirmed in vivo  
evidence of genotoxicity.  This has not been confir med due to the existence of defence mechanisms 
such as metabolite inactivation, excretion and an ti-oxidant systems, DNA repair mechanisms and 
natural (homeostatic) controls.  These mechanisms are redundant and effective because cell damage 
occurs quite regularly and naturally in the human body.  The "genotoxic potential" of oestradiol-17 β 
can be observed in vitro because these mechanisms are unavailable,  suppressed or overwhelmed.  It is 
not observed in vivo  due to the existence and correct func tioning of these mechanisms. Studies relied 
upon by the EC to demonstrate genotoxicity in vivo  simply confirm that, if thresholds for adverse 
effects are overwhelmed, there can be dramatic results. 
4.320  The Experts confirmed that oestradiol-17 β is not genotoxic in vivo , let alone carcinogenic 
through a genotoxic mode of action, and the EC provided no evidence whatsoever that oestradiol-17 β 
can cause mutations leading to cancer.  It is also not just an issue of judging one scientist's opinion 
over another, but that the EC's studies are simp ly not credible enough to support any other 
interpretation on the weight of all the evidence.  The carcinogenicity of oestradiol-17 β is therefore 
considered to be subject to a threshold. Since the SCVPH made an erroneous interpretation of the 
evidence related to thresholds for oestradiol-17 β, it was wrong not to conduct a dose-response 
assessment. 
(b) Potential adverse hormonal effects for sensitive populations 
4.321  The Experts also advised on the potential for adverse hormonal effects, particularly in 
prepubertal children.  They pointed to homeosta tic control mechanisms that adjust endogenous 
production of hormones in response to exogenous ex posure and advised that exogenous hormones are 
indistinguishable from endogenous hormones.  While  these controls may not be 100% effective, the 
assessment of risk must take them into account.  Th e Experts also advised that the bioavailability of a 
substance is important and that it can be substantia lly less than what is orally ingested. While there 
was speculation that hormones may be more bioava ilable in children than in adults, there is no 
evidence for this.  
4.322  Some Experts considered that there is no dir ect evidence of adverse effects on prepubertal 
children from exposure to hormones from treated m eat. Others did not contest this conclusion but 
claimed it had not been properly investigated.  The "indirect evidence" cited,  such as epidemiological 
studies related to puberty, simply does not impli cate hormone growth promoter residues due to the 
problems of "confounding" factors.  The EC had no  explanation as to why, if minute increases in  WT/DS321/R 
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  hormones have such significant effects, prepube rtal children do not suffer adverse effects from 
consuming eggs, meat and milk. The explanati on provided by others is that metabolic and 
homeostatic control systems are functioning as they were designed and no adverse effects occur. 
4.323  There are also questions about claims that exposure to low doses of oestradiol-17 β in utero  
carries a risk of breast cancer in adult life.  In light of the high amount of oestradiol-17 β produced 
daily by pregnant women and the low amount consum ed from treated meat, the dose of oestradiol-17 β 
to which the fetus is exposed is hardly low, and any incremental exposure from growth promoter 
residues is about as negligible as one can get. 
4.324  The SCVPH also did not evaluate  the potential for endocrine disruption in prepubertal 
children, but limited itself to an  exposure assessment.  It relied on data derived from an analytical 
method that has not been validated, one that has r esulted in inconsistent estimates. It made dubious 
assumptions about bioavailability in children.  In the end, it failed to evaluate potential adverse effects 
by not performing a dose-response assessment. Inst ead, it presumed adverse effects from exposure to 
hormones and speculated about the ratio of daily pr oduction in prepubertal children to exposure from 
treated meat.  However, one cannot adequate ly assess risks without assessing exposure from normal 
food consumption.  At least one Expert indicated that based on consensus levels of hormones in 
children JECFA's ADI would still be pr otective of sensitive populations.  
5. Issues related to good veterinary practice 
4.325  There was little discussion at the Experts mee ting of issues relating to compliance with good 
veterinary practice, but a few points can be highlight ed. First, the Experts clarified that mechanisms 
exist for testing meat and meat products to dete rmine compliance with established MRLs.  Second, 
since analytical methods for detecting residues n eed only be sufficient to identify whether residues 
exceed established MRLs, the availability of new a nd more sophisticated analytical methods for 
detecting residues is largely irrelevant when ther e is an established MRL with a validated detection 
method.  Third, there are no new residue data, no reason to believe the residue data relied upon by 
JECFA are insufficient, and no reason for existing residue data to be recalculated simply because new methods have been developed. Finally, Dr. de Br abander's written statement that no control measure 
short of a complete ban can adequately protect  against misuse and abuse is of questionable 
applicability to Canada in light of his admission that he has no knowledge of control measures in 
Canada. 
6. Conclusion 
4.326  The results of the meeting with the Experts are clear and consistent on the key issues.  The 
Experts unanimously advised that the EC did not  perform a risk assessment consistent with 
appropriate methodologies and that scientific evid ence was sufficient to a llow the performance of a 
risk assessment for the other five hormones. 
K. O
RAL STATEMENT OF THE EUROPEAN COMMUNITI ES ON LEGAL ISSUES DURING THE SECOND 
SUBSTANTIVE MEETING  
1. Introduction 
4.327  The European Communities made a reservation in  its statement yesterday when it questioned 
the point of going through this exercise of looking at the possible violation of provisions under the 
SPS Agreement .  I am afraid that we have to postpone our discussion of that issue once again, to the 
end of this meeting, as it seems more  important at this stage to respond to the Panel's request to clarify 
a few issues about the SPS Agreement  and its application to the facts of this case.  This is without WT/DS321/R 
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  prejudice to our position on the provisions of the SPS Agreement  which, if any, might be invoked 
against our measures . 
2. Article 5.1 of the SPS Agreement   
4.328  Let us start with the main violation found by the Appellate Body in the original EC –
Hormones case, Article 5.1 of the SPS Agreement .  The first point to make is that the situation today 
is very different from that which con fronted the Appellate Body in 1998.  
4.329  The Appellate Body had found that the old risk assessment performed by the European 
Communities was not specific enough to address r esidues in meat treated with hormonal growth 
promoters.  
4.330  The optimal way to remedy that would be  to establish a quantitative dose response 
relationship.  However, the scientists last week have  agreed (even though we did not need them to tell 
us) that this is not possible to perform because the necessary studies would entail, as the 2002 US 
Carcinogenesis Report says, conductin g studies of long term human exposure and cancer incidence in 
very restricted environments which will be able to  eliminate with confidence confounding factors in 
the initiation and promotion of cancer over a long latent period.  
4.331  Visualize the study: a perfect place would seem a prison where you have a sufficient number 
of very long term prisoners living in identical  conditions, half of whom would eat non-hormone 
treated beef and the other would eat hormone treat ed beef.  Even under these circumstances, which 
can not possibly be more restricted, the results of the study would be rebuttable due to differences in 
the past exposure history of those in custody.  You may visualize another situation where you have a sufficient number of newly born children with wh om you perform a similar experiment for about 30 
years.  Do I need to go on?   
4.332  In the absence of such studies we had to follo w an alternative approach which is also 
acceptable under the SPS Agreement .  Let's review what we ha ve done and some important 
knowledge that we have acquired:  
4.333  First, we now have sufficient scien tific evidence that oestradiol-17 β is genotoxic.  This is not 
a theoretical risk, it is not negligible and definite ly not "zero", it is a real risk however minimal. 
4.334  Second, we have sufficient evidence that e ndogenous production of natural hormones by pre-
pubertal children is by many times less than what was originally thought to be the case. 
4.335  Third, most of the scientists have agreed that  the dose-response curve cannot be defined with 
certainty for low exposure to these substances. 
4.336  Fourth, there is sufficient evidence, which is consistent with the observation that already 
exposure from background endogenous production can lead to cancer; 
4.337  Fifth, we know today that the old data used by the defending parties and JECFA and the 
method by which they have been collected, are questionable or no longer valid ( e.g. depletion data 
produced with method of analysis not apt to detect metabolites); 
4.338  Sixth, there is a sufficient body of evidence i ndicating increased rates of cancer in the US and 
Canada which is consistent with the argument th at residues of meat treated with these hormones can 
contribute to these higher rates.  WT/DS321/R 
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  4.339  Seventh, we know that under r ealistic conditions of use, good veterinary practice cannot be 
respected in the administration of hormones in th e US and Canada and this invalidates the ADIs and 
MRLs (as Dr. Boisseau confirmed last week). 
4.340  These things we did not know back then in the 1990s, but do know them now.  Last week we 
have heard that there is a difference of scientific views and of interpretation of data about some of 
these issues, but that this difference is not arbitrar y and indeed reflects genuine scientific uncertainty.  
In light of this, it is not indispensable that the third step of the risk assessment, the exposure 
assessment, is performed in a quantitative manner.  
4.341  With these data the European Communiti es has conducted a qualitative dose-response 
assessment and has come to the conclusion that r esidues of hormone-treated meat will constitute an 
added risk to human health.  As the Appellate Body has explained in 1998, risk is not measured in the 
laboratories but in the real world where people live and work and die. 
4.342  In conclusion on this point, we believe that the European Communities performed a risk 
assessment as appropriate to the circumstances and th e very nature of these substances, and therefore 
the ban on oestradiol-17 β is based thereon – that is: sufficien tly warranted by that risk assessment. 
4.343  Before turning to some comments on other SPS provisions, I would like to stress the 
important point that we have made.  A proper risk  assessment can come to th e legitimate conclusion 
that there are gaps in knowledge.  This is expr essly recognized in point 11 of the General Working 
Principles for Risk Analysis of Codex Alimentari us Commission.  JECFA's risk assessment bridges 
all knowledge gaps and scientific uncertainty by  assumptions in favor of allowing the use of 
hormones in growth promoters. 
4.344  It seems that the US and Canada do not accept th at a proper risk assessment can conclude that 
there are gaps and scientific uncertainty.  For example, the US relies on a contention, at para 56 of its 
statement of yesterday, that a risk assessment must fully address the four "mandatory" steps (and it 
claims that the European Communities has not done so). 
4.345  There is no basis for this.  Article 5.1 of the SPS Agreement  states that a risk assessment must 
be "appropriate to the circumstances" and take into account techniques developed by international 
organizations.  As the European Communities has so often explained, and the experts have confirmed, 
the four steps of the Codex guidelines only need to be taken where possible and necessary.  A 
qualitative assessment of the exposure of the kind pe rformed by the EC must be acceptable.  Our 
exposure assessment is not worse than that perform ed by the defending parties and JECFA, because 
both are based on assumptions and extrapolations from data on animal experiments to human beings.   
4.346  It seems that the US and Canada would like to  make it almost impossible for the European 
Communities to conduct a risk assessment they would ever accept.  If they were  to succeed with this 
tactic, however, the result would not be more au thorizations but more provisional measures under 
Article 5.7 SPS. 
3. Article 3.3 of the SPS Agreement   
4.347  There has also been mention of Article 3.3 of the SPS Agreement .  The argument is not clear 
but the European Communities would like to make a couple of important points.  First, WTO 
Members have a sovereign right to set a higher leve l of protection than reflected in international 
standards.  Article 3.3 only requires Members to ha ve a scientific justification for their measures 
reflecting this higher level of protection, not  for the higher level of protection itself.  WT/DS321/R 
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  4.348  Another point that needs to be made is that Article 3 of the SPS Agreement  applies to 
standards and measures, and does not require Members to accept risk assessments by organizations 
such as JECFA. Accordingl y, the fact that JECFA may have made a different risk assessment, which 
is outdated by today's standards and reflects a lowe r level of protection is not a basis for holding the 
EC risk assessment to be inadequate.  In any ev ent, the European Commun ities has shown that its 
measure has the necessary scientific justification and ai ms to achieve a higher level of protection.  For 
this reason we fail to see the relevance of Article 3 SPS as a basis for the claims of US and Canada in 
this case. 
4. Article 5.7 of the SPS Agreement   
4.349  Similarly, the fact that JECFA could carry ou t risk assessments on the five other hormones, is 
not a reason for holding that the European Communities cannot adopt provisional measures based on Article 5.7 of the SPS Agreement .  For JECFA, the information is appa rently sufficient to conduct risk 
assessments; for the European Communities it is not.  Even Dr Boobis agreed (and the US 
misrepresents his position at para 35 of its statement yesterday morning). 
4.350  The US is also wrong to say (in para 6 of its  statement) that the European Communities has 
failed to review the provisional bans  within a reasonable time.  The European Communities is in fact 
now conducting such a review once again. 
5. Article 5.5 of the SPS Agreement   
4.351  There have also been suggestions that the EC ban on oestradiol-17 β (and the provisional 
prohibition of the other five hormones) are unreasonable or arbitrary in view of the large amounts of hormones that human beings are already exposed to fro m many different sources.  Here again, we are 
not sure what the argument is.  We cannot see how compatibility with Article 5.5 SPS is relevant to 
this case since no violation of this provision has been  invoked by the Defendants.  But even if it were, 
we would remind you of the interpretation of the Appellate Body of this provision.  You cannot 
compare natural presence of these substances in a great many products with added risk from hormone-treated meat.
24 
6. Conclusion on the SPS Agreement   
4.352  Chairman, Members of the Panel, our re view of the possible relevance of the SPS Agreement  
has been somewhat cursory.  Our problem is that  we do not know what we are accused of.  The US 
and Canada have not set out their claims in a Panel Request and their arguments criticizing our 
measures are varied and wide-ranging.  We would be  happy to discuss these issues in more detail if 
only we would be told exactly what it is we ar e doing wrong, because it is scientifically unsound and 
arbitrary. 
7. Concluding  statement of the European Communities  
(a) Introduction 
4.353  The European Communities would first of all thank you again for the professionalism and 
objectivity with which you have conducted these proceedi ngs.  Let me just recall that it was more than 
a year ago that we met for the first time to di scuss the main claims of the European Communities 
against the US's s and Canada's illegal unilateral de termination of the allege d inconsistency of the 
EC's implementing measure and, based thereupon, th eir illegal continuation of the sanctions against 
the European Communities.   
                                                      
24 See para.221 of the Appellate Body Report on EC – Hormones .  WT/DS321/R 
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  4.354  The European Communities has explained in deta il why in order to resolve these disputes it is 
not necessary for you to address the scientific issues re lated to the use of hormones as animal growth 
promoters.  Chairman, Members of the Panel, you have nevertheless decided to look at these scientific 
issues.  And we are the first to acknowledge that the scientific debate has not facilitated your life.  As 
we have learned, the questions related to the use of these hormones are subject to a longstanding 
legitimate scientific debate amongs t scientists with respected and reasonable arguments on both side.  
4.355  However, one bottom line with which probabl y everybody will agree is that these hormones 
do not improve your health.  These hormones are animal growth promoters but not health promoters. Instead we discuss scientif ic issues such as genotoxocity, muta genicity, carcinogenesis, DNA repair 
mechanism, the risks of early puberty to our child ren, obesity, cancer as well as abuse and misuse of 
these hormones.  Whatever one may think about th is, it does certainly not increase our appetite for 
meat. 
4.356  Another bottom line, which can be safely draw n, is that these hormones present a hazard and 
potentially a risk.  Now, I agree that this is where the controversy starts.  But whatever one may think 
about it as lawyers or consumers, neither of the scientists nor of the Defendants can reasonably argue that there is no potential risk related to the u se of these hormones as growth promoters in cattle. 
Instead, we have heard a lot of talk about "threshol ds", "appreciable risk" or "acceptable risk".  But 
whether a risk is appreciable or not, whether a ri sk is acceptable or not, it still remains a risk. And 
contrary to what the defending parties have argued yest erday this is not a theore tical risk.  No, the risk 
is real, however minimal it may be. 
4.357  Why should we accept such a risk?  Why should we  expose our public to an additional risk to 
human health?  Indeed, Chairman, Members of the Pa nel, we have heard repeatedly that we should 
not care about the addition of the natural hormones sin ce they are also present in  natural food, such as 
broccoli, milk, eggs or butter or produced endogen ously.  But the question persists why we should add 
on top of this an additional burden on the consumer wit hout any health benefit in return.  It is true that 
we all take risks in life whether we drive with a car, or when we take the plane or if we drink a glass of milk.  However, we take these risks because we al so see the benefit.  Driving a car is comfortable, 
taking the plane is fast and milk contains a lot of vitamins.  Yet, the story is different with hormones 
used as growth promoters in cattle.  Here the risk is on the consumer.  He has to face an additional 
health risk by being exposed to higher hormone levels .  But he has no additional health benefit.  Thus, 
from the perspective of a public health regulator, the risk/benefit calculation does not speak in favour 
of the use of these hormones either.  
4.358  If at all, one may argue that the issue of not allowing hormones as growth promoters in cattle 
while we allow our children to drink milk is a matte r of consistency.  Howeve r, that would also be a 
very superficial view of the issues at stake.  As  we have explained yesterday and as the Appellate 
Body has already decided, one cannot compare thes e two things.  On the one hand, we talk about 
natural food products that are part of our daily life over centuries and where there is a concrete 
risk/benefit for the consumer.  On the other hand, th e use of hormones in beef is an unavoidable risk 
which does not bring any advantages to public health. 
4.359  How can this be better exemplified than by lo oking at our children.  Children are the most 
sensitive part of the population and we must protec t them wherever we can.  There is a lot of 
uncertainty about how the mechanism of hormones in  these children work but one can be sure that 
doubling the oestradiol doses – as would be the case by  allowing hormones in beef – will have an 
effect.  One of your experts, Dr. Sippell, has confirmed this pointing to the examples of early puberty 
or obesity.  We should take his judgment very serious ly when he drew the conclusion of the scientific 
hearing that he is "very concerned".  Whatever t oxicologists or veterinarian may have to say we 
should take this testimony of a p aediatrician very, very seriously. WT/DS321/R 
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  4.360  This brings me to one last point in this introduction which is about misuse and abuse of 
hormones as growth promoters.  It is already striking that we always refer to "Good Veterinary 
Practices" even though no veterinarian or other traine d health professionals is involved in the use of 
these hormones in the United States and Canada.  As they are sold freely over the counter to farmers 
you will admit that controlling the correct use of these substances is difficult under these circumstances.  It should strike us all that one implant contains the amount of hormones contained to 
up to 10,000 carcasses of animals.  The Europ ean Communities has assessed what happens if these 
implants are misused and, indeed, there exists c oncrete evidence on this in the United States and 
Canada.  
(b) The scientific debate 
4.361  Let me now turn briefly to the outcome of th e scientific debate regarding the use of these 
hormones as growth promoters in cattle.  The Eur opean Communities is still puzzled by the United 
States' and Canada's attempts to present this de bate as if there were only one single monolithic 
opinion in the scientific world on the safety of th ese hormones.  This serves the US's and Canada's 
purpose but it is not objective. 
4.362  It is true that we are all sometimes tempte d to provide easy answers to difficult questions. 
And, certainly, this natural reflex is made even easier  in the face of scientists who are able to "quickly 
dismiss"  scientific evidence that they have not taken into account in the first place.  
4.363  What is important for your decision, however, is to look at the differences and to see whether 
these differences are scientifically legitimate.  The European Communities has never claimed that its 
scientific findings are the only valid ones, unlik e what the United States and Canada have done. 
However, what the European Communi ties has repeatedly insisted upon is that its scientific views and 
its risk assessment are appropriate to the circum stances and that they come from respected and 
legitimate sources.  One may not like the EC' conclusions but one cannot ignore or discredit them 
either. 
4.364  It also appears sometimes ironic to present the EC' risk assessment in opposition to the 
JECFA's assessment.  There is no doubt that th e JECFA assessments have been based on outdated 
data since despite its assessment in 1999 this does not mean that the data also come from the 90's. 
Rather the JECFA representative  admitted that they only review data as they receive them and in this 
particular case they had only received data from the FDA some of which date back to the 1960s. 
Despite the general acknowledgement  that science is constantly moving forward and reveals new 
evidence this is an astonishing pro cedure itself which, again, we leave to your discretion on how you 
take this into account.  A second undisputable issu e is that JECFA's (and indeed the United States and 
Canada's) approach to risk is different to the one by the European Communities.  JECFA has set 
thresholds in order to minimize the risk, the Eu ropean Communities has prohibited the use of these 
hormones in order to exclude avoidable risks.   
4.365  These are two completely different risk manage ment decisions.  Both are legitimate and we 
are, therefore, not criticizing JECFA for what it has done.  However, we also cannot be blamed for deviating from JECFA's approach.  It is ultimately the responsibility of the regulator or risk manager 
to decide what level of risk he wants to accept, and as I have indicated earlier, this is a very complex 
decision to which no easy answer can be given.  
4.366  Let me then turn to our puzzl ement by the United States and Canada's characterization of the 
scientific debate.  We mentioned already yesterday that they very selectively refer to the scientific 
evidence in order to make their case.  Chairman, Members of the Panel, we trust that you have a better 
recollection of what was actually said.   WT/DS321/R 
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  4.367  Let me just give a few examples. The United Stat es has stated that "the experts agree that the 
EC has not presented any scientific evidence that estradiol is genotoxic in vitro  or in vivo  at 
physiological levels".  However, may I remind yo u about the lively debate between Dr. Boobis and 
Dr. Guttenplan on this particular issue where Dr . Boobis "quickly dismissed" a study that was co-
authored by one of his expert colleagues.  Isn't it simply disingenuous to present this debate as if "all 
experts agree" that there is no evidence?  And I'm not even talking about the experts that have not 
expressed an opinion on this issue. 
4.368  Another example is the US's statement that "the  experts have confirmed that the evidence for 
each of the five hormones is sufficient to complete a risk assessment".  This is again incorrect.  First, 
some of the experts have not even expressed a vi ew on this.  And even Dr. Boobis, who the United 
States often likes to rely on has merely stated that JECFA had enough information for completing a 
risk assessment whereas he could not say this for the European Communities.  Again, as we have just 
explained, we all know the difference in these pe rceptions which is based on the fundamentally 
different approach by JECFA and the European Co mmunities on how to deal with risks and whether 
or not it is appropriate to set a threshold in light of the possible direct and indirect genotoxcity of these 
substances. 
4.369  A third and last example is Canada's today's statement that "nothing in what the Experts have 
written, nothing in what we have heard from the E xperts (…) or the Experts have said demonstrates 
that there is any risk to human health, adult or chil d, old or young, man or woman, boy or girl, arising 
out of the correct use of these growth-promoting agen ts in cattle".  It suffices to contrast this 
simplistic summary by Canada with Dr. Sippell's conclu sion of last week that he is "very concerned" 
about the health of children if they were exposed to  these hormones in beef.  Again, we trust the Panel 
Members that they take into account what has actually  been said by the scientists in their variety and 
not what the United States or Canada make out of it. 
4.370  In this context, let me also refer to the closi ng statements by some of the experts during last 
week's hearing and which summarizes adequately th e level of differences in the scientific world.  
Dr. Guttenplan stated that as regards young girls and boys we have to worry about the developmental 
effects of estradiol on them and that hormones sens itive cancer might be increased by raising the level 
of oestradiol.  Dr. Sippell stated that we do not know enough about children and that the data are 
insufficient to be confident that the additional exposure from hormones treated beef poses no risk.  
Dr. Cogliano himself referred to the messiness of science and to the split within the scientific 
community.  He also stated that these issues are not  likely to be resolved any time soon.  Finally, 
Dr. De Brabander even referred to other aspects re lated to the use of hormones as growth promoters 
such as animal welfare or environmental concern. 
4.371  The European Communities considers that there is a bottom line that one cannot ignore. The 
scientific issues on which the European Communities and the United States and Canada disagree are not arbitrary but they are the result of a legitimat e and genuine disagreement amongst scientists.  This 
was the main result of the Panel' experts hearing.  We  do not believe that this Panel is in a position, or 
required, to resolve these long-standing scientific i ssues.  Instead. we would urge you to acknowledge 
the legitimate scientific controversy and to draw th e respective conclusions from it in resolving these 
two disputes. 
(c) The context of the scientific debate 
4.372  With these remarks, let me come back to where we ended last year after our discussion on the 
systemic issues under the DSU.  
4.373  The European Communities would recall that these two disputes are still not about the 
SPS Agreement  despite the extensive scientific debate th at has taken place on the public health risk WT/DS321/R 
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  related to hormones in animal treated beef.  Chai rman, Members of the Panel, the panel requests by 
the European Communities which pr ovide the legal basis for these two disputes do not refer to any 
single provision under the SPS Agreement .  Rather, as we discussed extensively last year, the 
European Communities has based its  case against the illegal continua tion of sanctions by the United 
States and Canada on systemic violations of the DSU,  in particular Article 23, paragraphs1 and 2(a), 
Article 21.5 and Article 22.8.  
4.374  As repeatedly stated, in order to resolve th ese disputes it is not necessary for you to make a 
substantive finding on the scientific issues.  We have  already set out that in our view the proper forum 
and the right procedural way to deal with these w ould be a compliance Panel under Article 21.5 of the 
DSU initiated by the United States or Canada.   
4.375  This said, it is true that the European Comm unities has also made an alternative claim which 
requires you to address the substantive scientific as pects in order to determine that the original 
inconsistent measure has been removed and that  the European Communities has addressed all the 
rulings and recommendations of the DSB.  
4.376  However, this alternative claim has been only made "if, and only if"  the Panel were to 
disagree with the European Communities on its sy stemic arguments under the DSU.  Up until now, 
the Panel has not decided that this is the case.  Ther efore, the main claims and arguments as set out by 
the European Communities in its submissions ar e still valid and you are still called upon to take a 
decision.  
4.377  Our discussion of the scientific issues may nevertheless be useful in respect of the main 
systemic claims made by the European Communities.  I would just like to recall that one of the claims 
is that the US's and Canada's continued suspension of obligations is in violation of Article 23.1 and 
Article 22.8 of the DSU.  This is so because by continuing to apply sanctio ns against the European 
Communities, the United States and Canada are unilaterally seeking to redress an alleged WTO 
inconsistency through the EC compliance measure.  Furthermore, as you recall, in view of the 
requirements of Article 22.8 of the DSU, the Europe an Communities has explained in great detail that 
its implementing measure must be presumed to be WTO-consistent since there is no multilateral 
finding to the contrary.  This presumption is derive d from the general principle of good faith whereby 
WTO Members are presumed to act in conformity with their obligations.   
4.378  In this particular context, the European Comm unities considers that the scientific debate fully 
supports its proposition of a presumed compliance of its implementing measure.  Indeed, since the 
scientific evidence demonstrates that the EC complia nce measure is in actual compliance, it follows a 
fortiori  that the lower standard of presumed compliance is also fulfilled.   
4.379  Let me explain this aspect in more detail. 
4.380  From the beginning of these two proceedings, th e United States and Canada have tried to 
discredit the European Communities' compliance m easure and its scientific foundations.  Arguably, 
by this criticism the defendants have tried to undermine the European Communities' reliance on the 
principle of good faith (or in this case the presump tion of compliance) under Article 22.8 of the DSU. 
And one has to admit that this litigation tactic by  the United States and Canada was not completely 
unsuccessful because you felt the need to address the scientific issues related to the use of these six 
hormones as growth promoters in cattle notwithstanding the applicability of the general principle of good faith.  
4.381  However, following the extensive discussion of th e scientific issues, it is clear that this 
approach by the United States and Canada is not any longer sustainable.  As we have seen last week, 
there can be no doubt that there exists a real and actua l risk to public health related to the use of the  WT/DS321/R 
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  six hormones as growth promoters.  The European  Communities was therefore fully entitled to ban 
the use of these hormones in beef.  And in legal terms, the European Communities was therefore also 
right in invoking the principle of presumed compliance within the context of its systemic claim under Article 23.1, 22.8 of the DSU. 
4.382  The logic of this argument may also be further elucidated when the invocation of good faith is 
linked to the issue of burden of proof.  The United States and Canada have attempted to make a prima 
facie case against the EC compliance measure.  Ye t, following the scientific  debate the European 
Communities has refuted this prima facie case. The burden of proof is therefore still on the United 
States and Canada for questioning the European Co mmunities' conclusion that the use of these six 
hormones for animal growth promotion is a risk to public health.  The United States and Canada have 
failed to meet this burden of proof  and they could not support their conclusions that the EC's ban on 
hormones treated beef was scientifically unsound.  
4.383  We would like to recall that the European Communities also made violation claims under 
Articles 23 and 21.5 of the DSU that do not depend on the WTO-consistency of the EC's compliance 
measure.  Rather these claims are directly linked to  the US's and Canada's unilateral determination of 
the alleged inconsistency of the EC' compliance measure.  
4.384  Finally, we have heard again this morning th at the United States maintains that it could not 
have possibly made a "determination" that the EC's ne w ban is in fact WTO-cons istent by the time the 
EC initiated these proceedings because the European  Communities failed to provide all the necessary 
materials relevant to its measure. 
4.385  This is a rather disingenuous characterization of  the real facts and I will, at this stage not 
recall all our arguments that we have submitted to you.  Let me just first point out that the United 
States erroneously keeps referring to a determinati on of WTO-consistency whic h it claims it could not 
make. The DSU neither requires nor forbids such  "consistency determination".  What the DSU 
prohibits, however, is the unila teral determination of a WTO violation by another Member. 
4.386  Let me also recall, that while the United Stat es in its view struggled to come up with a 
"determination" as early as from November 2003 they dismissed the EC compliance measure and 
explicitly stated in its Trade Policy Review of 2005 that "they failed to see how the revised measure 
could be considered to implement the recommendations  and rulings of the DSB" .  And in addition to 
that, since then the United States simply continued to apply its sanctions against the European 
Communities.  There is no other way than to qua lify this behaviour as an illegal determination of non-
compliance.  And, finally, it is also simply not tr ue that the United States had been confronted with 
the evidence for the first time in 2003.  All the unde rlying studies have been peer-reviewed and been 
published in journals and the European Communiti es undertook even an effort to discuss with the 
United States in Washington the sci entific evidence. All this is on the record.  The European 
Communities, therefore, cannot express again its pu zzlement by the way the United States represents 
the facts in this dispute. 
(d) Conclusion 
4.387  For all these reasons, the European Comm unities would ask the Panel to find: 
(a) First, that the United States' and Canada 's continued suspension of concessions 
against the European Communities was inconsis tent with the provisions referred to 
under Part I of the EC's first written submission. WT/DS321/R 
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  (b) In the alternative, the United States' and Canada's continued suspension of 
concessions against the European Communities is inconsistent with the provisions set 
out under Part II of the EC's first written submission. 
L. ORAL STATEMENT OF CANADA ON LEGAL I SSUES DURING THE SECOND SUBSTANTIVE 
MEETING  
1. Introduction 
4.388  Almost ten years ago, the DSB ruled that the EC ban on Canadian beef treated with growth-
promoting hormones was inconsistent with the SPS Agreement  because it was not based on a risk 
assessment.  After the EC refused to bring itself into compliance, the DSB authorized Canada to 
impose retaliatory measures.  The EC reaffirmed its  ban in 2003, claiming that it was now based on a 
risk assessment in respect of one of the hormones an d that there was insuffici ent scientific evidence to 
conduct a risk assessment for the other five.  The EC launched this dispute, claiming: first, that the 
DSB authorization was no longer valid and that Cana da had an obligation to suspend its authorized 
retaliatory measures; and, second, that if Canada does not, it has an obligation to bring a compliance 
case against the EC.  The EC's DSU claims are wrong on the question of process and its alleged "compliance" with the SPS Agreement  is unsupported by evidence and flatly rejected by the experts.  
4.389  The EC's argument that Article 21.5 of the DSU  provides that a complaining party has a legal 
obligation to launch compliance proceedings every ti me there is a "disagreement" as to compliance 
should be rejected for its systemic absurdity.  The EC argues that, on the sole basis of an assertion of 
compliance by the EC, Canada should forego its righ ts under the WTO and launch dispute settlement 
proceedings.  If the EC were to be found again in  violation it could make another unilateral assertion 
of compliance and, if its procedural arguments prev ail, force the parties into another dispute.  Few 
things can be better calibrated to undermine confid ence in WTO dispute settlement than the endless 
litigation loop that would result from this. 
4.390  The EC's allegation of a breach of Article 22.8 on the basis that its unilateral assertion 
overrides the multilateral authorization of the DSB is also plainly wrong.  Canada, having acted 
consistently with a DSB authorization, may not be f ound to be in violation of Article 22.8 on the sole 
basis that the EC has asserted that it has complied.   To end the retaliatory measures in light of the 
disagreement as to its compliance, the EC must esta blish its compliance multilaterally.  It is the EC's 
burden, since it seeks to overturn an existing DSB au thorization.  This case is therefore not about 
procedural lacunae in the DSU, but abou t the compliance of the EC measure.  
4.391  The rest of Canada's submission addresses the legal requirements of the SPS Agreement . 
Canada makes the following preliminary observations . First, Canada's reference to exposure to 
hormones from other sources does not relate to the regu latory aspects of the "con sistency" required by 
Article 5.5, but to the "appropriate circumstances"  in relation to which the EC's risk assessment is 
conducted, pursuant to Article 5.1.  The EC's position on the risks from these hormones is either 
irresponsible or disingenuous: if the hormones ar e as hazardous as it has claimed, the EC must 
conduct an assessment to determine in what doses there are health risks, regardless of how natural the 
products are; where it refuses to do so and insists that natural sources can be consumed every day but 
residues from treated meat cause adve rse effects, scepticism about the EC's reasoning is warranted.  
Second, the EC seems to be saying that even if it loses, its ban will remain in place, justified not by 
Article 5.1 but by Article 5.7, because it will clai m there are insufficient data to conduct a risk 
assessment.  This makes it all the more important  for the Panel to make findings about what 
constitutes "sufficient evidence", which is different from scientific uncertainty, minority opinion or 
speculations based on clinical observations.   WT/DS321/R 
 Page 71 
 
 
  2. The EC has not demonstrated that the rele vant international standards are insufficient 
to meet its appropriate level of protection 
4.392  The EC's measure is not justified under Article  3.3 because existing international standards 
are capable of achieving the EC's higher level of prot ection.  While the EC alleges that these standards 
are insufficient and wrong, it has provided only unconfirmed evidence, considered within an artificially constructed level of pr otection of "zero additional risk". 
4.393  Existing international standards have been developed using methodologies so widely accepted 
that to call them into question for these hormones calls them into question for other compounds as 
well. The EC misrepresents the level of protection in herent in these standards.  For example, in light 
of other sources of exposure to the three natural ho rmones, standards for these hormones are such that 
it is not necessary to determine maximum allowable levels of hormone residue in meat, reflecting the conclusion that the ADI could never be exceeded simply by consuming treated meat.  The EC 
considers the concept of "no appreciable risk" to be  subjective and qualitative.  However, that concept 
reflects scientific reluctance to guarantee zero risk in the case of very small, unquantifiable risk.  
Since the risk inherent in this concept is the risk from exposure to hormones at the level of the ADI, which includes exposure from all other sources,  the risk from exposure to oestradiol-17 β from treated 
meat is only 4% of the risk inherent in that concep t.  The level of protection achieved by international 
standards is therefore as close to zero as  possible and reflects theoretical risk. 
4.394  The EC claims that its ban is necessary becau se international standards cannot achieve its 
level of protection, which it has set at "zero additional risk" to get around the fact that risk management methodologies cannot provide for "zero risk ".  The EC therefore believes that it need do 
no more than establish that exposure to treated m eat increases overall exposure to hormones, and then 
assume this automatically increases risk.  This is based on incorrect assumptions that adverse effects 
will occur at anything close to normal levels of e xposure to hormones and that levels of exposure to 
treated meat alter the level of hormones in the body sufficiently to alter the level of risk.  However, 
since the EC provides no evidence that exposure to hormones from treated animals alters the risk that 
might already exist from exposure to other sources of hormones, it has not demonstrated that there are additional risks.  
3. The EC has not demonstrated that its permanent ban on oestradiol-17 β i s based on a 
risk assessment appropriate to the circumstances 
4.395  The EC claims that its reaffirmed ban on oestradiol-17 β is now based on a risk assessment, 
but that assessment is not appropriate to the ci rcumstances, does not identify and evaluate the 
potential for adverse effects from exposure from tr eated meat, does not demonstrate that exposure 
from this source causes cancer and does not demons trate that sensitive populations are at risk from 
exposure from this source. 
(a) The EC has not demonstrated that existing international risk assessment techniques are 
inappropriate to the circumstances 
4.396  While the EC does not dispute that the four-s tep risk assessment process is appropriate to 
these circumstances, it does make two incorrect claims  about the application of these steps in these 
circumstances.  First, its claim that the SPS Agreement  envisages a risk assessment that is "wider in 
scope" than the four-step pro cess does not find support in the SPS Agreement .  Article 5 addresses risk 
assessment techniques and not the separate and define d process of risk management.  The EC reliance 
on sections of the Appellate Body ruling in EC – Hormones 
is also unjustified.  There is a parallel 
between the four-step process and legal requirements to "identify adverse effects and evaluate the 
potential for their occurrence from exposure to hormones from meat from treated animals". WT/DS321/R 
Page 72 
 
 
  4.397  Second, the real reason the EC seeks to confu se the parameters of an appropriate risk 
assessment relates to its claim that  the scientific risk assessment was justified in short-circuiting the 
process because of instructions from the risk manage rs related to "zero additional risk".  A risk 
manager is not justified in instructing a risk assessor to skip certain steps of the assessment to serve 
risk management objectives.  The risk assessment pro cess is a scientific exercise that should arrive at 
the same scientific results regard less of the risk management framewo rk within which it is conducted. 
The issue is therefore whether the EC's purported  risk assessment unjustifiably departed from the 
four-step process. 
(b) The EC has not demonstrated that the risk  assessment on which its measure is based is 
appropriate to the circumstances 
4.398  The EC measure is based on the three SCVPH opinions.  While the EC has also submitted 
additional material, it has not attempted to dem onstrate how this material constitutes a risk 
assessment.  It is therefore the SCVPH opinions that  must satisfy the four-step process.  The Experts 
confirmed that it suffers from two critical flaws.  First, the Experts confir med that a dose-response 
assessment is a necessary component of a risk assessmen t, without which it is impossible to know the 
dose at which adverse effects will occur. In thei r own reviews, JECFA and others conducted dose-
response assessments.  Operating under the instru ctions to avoid "additional risk", the SCVPH 
declined to conduct such an assessment, concluding  that the adverse effects from oestradiol-17 β did 
not exhibit a threshold for adverse effects, and as su ch all exposure would lead to "additional risk". 
This conclusion is not justified by the scientific evidence. 
4.399  Second, the failure to conduct a dose-response assess ment led to the failure to complete a risk 
characterization, which corresponds to the requirement  to evaluate the potential for the occurrence of 
adverse effects.  The Experts disagreed w ith the EC that the SCVPH conducted a risk 
characterization.  Assessment of risk from a substance in general was simply conflated with 
assessment of risk from a single source of that  substance. After identifying oestradiol-17 β as a hazard, 
the SCVPH concluded that exposure to it from treated  meat poses additional risk.  The finding that the 
original EC ban was not based on a "sufficiently sp ecific" risk assessment applies equally this time, 
and the artificial construct of "zero additional risk " does not save it.  The failure to complete these 
steps stemmed from mistaken interpretations of the scientific evidence, which the next section 
reviews. 
(c) There is no evidence that oestradiol-17 β is genotoxic in vivo  
4.400  The SCVPH concluded that there is no thr eshold for adverse effects from oestradiol-17 β on 
the basis of erroneous and scientifically unjustified in terpretations of genotoxicity test results.  While 
there is no dispute that oestradiol-17 β is carcinogenic through a dose-dependent hormonal mode of 
action, and that there is evidence of "genotoxic potential", the SCVPH was wrong to conclude that 
oestradiol-17 β is carcinogenic through a genotoxic mode of action.  It ignored the fact that in vitro test 
conditions neutralize effective and redundant defence and repa ir mechanisms, meaning that in vitro 
genotoxicity must be confirmed by positive in vivo results.  The "weight of evidence" is against 
oestradiol-17 β being carcinogenic through a genotoxic m ode of action.  Other national and 
international regulatory bodies, as well as the Expe rts, have indicated this and the SCVPH has no 
credible evidence that all these experts are wrong. 
4.401  While the EC raises the spectre of "scientific  uncertainty" and "minority scientific opinion", 
the conclusion that oestradiol-17 β is genotoxic in vivo  is not supported by any reasonable 
interpretation of the available scientific evidence.  For a contrary interpretation of the data to 
constitute a credible minority opinion, or for it to re flect "scientific uncertainty", there would need to 
be at least some evidence that could not be expl ained by the existing understanding of the issues.  WT/DS321/R 
 Page 73 
 
 
  According to the Experts, this is not the case.   Any evidence there is that oestradiol-17 β may be 
genotoxic can be explained according to common understandings of biological mechanisms. 
(d) There is no evidence of adverse effects on the endocrine system 
4.402  While the EC cites various revised estimates of blood concentrations of oestradiol-17 β in 
prepubertal children, the issue is whether these estim ates tell us anything about the implications of 
incremental increases in exposure from one particul ar source for the risk profile of prepubertal 
children.  The JECFA analysis focuses on determini ng the level at which no adverse hormonal effects 
would occur in the most sensitive sub-groups of the population.  The SCVPH did not evaluate the 
occurrence of potential adverse hormonal effects.   It compared intake of oestradiol-17 β from treated 
meat with this "new" daily produc tion rate, concluded that the excess  intake would exceed the daily 
production in prepubertal boys and then implie d an increase in risk to prepubertal boys. 
4.403  Apart from questions about the validity of the data and the justifiability of the assumptions, 
this approach suffers from basic methodological flaw s.  Since natural hormones are part of a normal 
diet, a risk assessment must take into consider ation background dietary exposure.  There is no 
evidence that there is no safe threshold for daily consumption of oestradiol-17 β in part because of 
homeostatic control mechanisms.  The SCVPH failed to consider the question of a threshold for safe 
daily intake because it did not conduct a dose-respon se assessment.  The fact that background levels 
are lower than previously thought says nothing a bout the potential occurren ce of adverse effects. 
Thus, as a result of a failure to conduct a dose-res ponse assessment, the SCVPH has failed to evaluate 
the potential occurrence of adverse horm onal effects from exposure to hormones. 
4. The EC has not, and cannot, demonstrate that  there is insufficient evidence to conduct a 
risk assessment on the five other hormones 
4.404  There are three legal issues concerning the interp retation and application of Article 5.7 in this 
dispute.  First, the mere existence of scientific uncertainty does not imply th at the scientific evidence 
is insufficient to allow the performance of a risk  assessment.  Techniques have been developed to 
address scientific uncertainty in the risk assess ment process and these techniques can be seen in 
practical application here.  
4.405  Second, the Appellate Body has clarified that "insufficiency" implies a relationship between 
scientific evidence and the ability to perform an "ade quate" risk assessment.  The EC suggestion that a 
WTO Member can determine what constitutes "s ufficiency" of scientific evidence through the 
selection of its level of protection was already rejected by the panel in EC – Biotech . The advice 
sought by this Panel confirmed that the relevant scientific evidence is sufficient for the performance 
of a risk assessment.  The "new" evidence provided by the EC does not call into question the JECFA 
risk assessments and the conclusion that these horm ones are safe when good veterinary practice is 
followed. 
4.406  Finally, Codex has a procedure whereby any Member can request a re-evaluation of a 
substance that has been previously reviewed by JECF A or for which a Codex standard exists.  The EC 
has deliberately avoided using this procedure, desp ite its insistence that new information casts doubt 
on the validity of the Codex standards and JECFA risk assessments.  One would expect the EC to 
invoke this procedure not only to protect its own citizens but also to protect the citizens of other 
countries that rely on Codex standards.  Since the EC cannot demonstrate that the relevant scientific 
evidence is insufficient to perform  a risk assessment on the other five hormones, it has not fulfilled 
the first condition of Article 5.7. WT/DS321/R 
Page 74 
 
 
  5. The EC has not demonstrated that the failu re to follow good veterinary practice results 
in increased risk of adverse effects 
4.407  The EC's purported assessment of the failure to  respect good veterinary practice involves 
exaggerated and unrealistic overdosin g scenarios and suffers from other flaws.  First, despite the EC's 
assumption to the contrary, there is no evidence to suggest that there is an economic incentive to 
misuse growth-promoting hormones where their use is  approved and controlled.  The EC's experience 
with the abuse of banned hormones is  not relevant to Canada where th eir use is permitted.  There are 
in fact significant economic disincentives to overdose an animal as implants have been calibrated to 
provide an optimal dose.  Second, even if some misuse occurs, the eviden ce presented by the EC does 
not support the conclusion that the misuse scenarios will lead to residue levels that create potential for 
adverse effects to occur.  
4.408  Third, the EC has not evaluated whether unrealistic  misuse scenarios occur in real life.  It has 
ignored data from Canada's National Chemical Residue Monitoring Program, and has provided no 
evidence that Canadian meat contains hormones at levels exceeding the JECFA ADI.  It depicts 
successful detection of non-compliance as a failure of controls, and misrepresents non-compliance as 
the norm.  By ignoring the way in which hormones are actually used and the results of Canada's official residue monitoring program, the EC has failed to take into account "relevant processes and 
production methods" and "relevant inspection, sampling and testing methods" in the conduct of its so-
called risk assessment on misuse and abuse, as required by Article 5.2 of the SPS Agreement .  The 
EC's risk assessment does not meet the requirements for a risk assessment under the SPS Agreement . 
6. Conclusion 
4.409  The key legal questions at issue in this dis pute have clear answers.  For these reasons and 
those contained in Canada's earlier submissions, and the arguments and evidence submitted by the 
United States, Canada respectfully requests that the Panel reject the EC's claim that it has complied 
with the recommendations and rulings in EC – Hormones . 
7. Concluding statement of Canada 
4.410  It is natural, given the subject matter, that the parties on occasion may have shed more heat 
than light on the discussions.  I hope that none of that has reflected poorly on us or on you.   
4.411  The questions at issue are indeed  emotive.  I note for example that there was an entire section 
in the EC statement this afternoon about the protecti on of children.  Certainly, there is nothing more 
important than protecting the health of our children.  This is a concern to us as parents, brothers and 
sisters, public officials and, indeed, private citizens.   
4.412  But it is essential to make a distinction between  real concerns and the speculative references 
that have also been at play.  There is no need to go into them in detail at this stage, but there have 
been a lot of them.  That will surely present a di fficult challenge as you proceed with this matter in 
your decision making.  
4.413  Canada takes it as given that the parties, as democratic, law-abiding countries and entities, 
and also as public officials, all have as a princi pal objective the protection of public health and 
children’s health.  The question is not whether we protect the children – that’s a given.  We do so 
rigorously and without reservation.  The question is how to approach doing so, and in doing so 
whether we are abiding by the law.  
4.414  We have set out the law in detail, both on pr ocedural issues and on substantive SPS issues, 
and will not repeat those points now.  But the one point I wished to stress in closing is this: on  WT/DS321/R 
 Page 75 
 
 
  whichever side of the law you land, your decision will not harm the children.  It would be a disservice 
to us all to cast the dispute in any other terms.   
V. ARGUMENTS OF THE THIRD PARTIES 
A. AUSTRALIA  
1. Introduction 
5.1 According to Australia, this dispute is about  one fundamental question; whether the DSU 
provides that a Member's announcement of its co mpliance with DSB recommendations and rulings 
triggers an obligation on a retaliating Member to  either (i) cease retaliation or (ii) initiate a new 
process for a multilateral determination of compliance.25 
2. Opening Panel meetings for observation by the public 
5.2 Australia contends that when parties agr ee not to follow the Working Procedures in 
Appendix 3, or parts thereof, it would be difficult fo r the Panel to justify a decision that goes against 
the wishes of the parties.  In Australia's view, to do so would undermine a basic principle of dispute 
settlement whereby parties consult with each other and with the Panel and seek mutual agreement on 
the conduct of disputes, according to Article 12.1 of the DSU.26 
5.3 Australia submits that the decision to open the meetings with the parties to the public would 
not pose a problem, in principle, to Australia.  Australia was however concerned about the modalities 
of organising the meetings, equity of access and logistic issues.  Australia was of the view that the 
opening of the Panel's meetings to the public shoul d be subject to the provisions that allow for 
protection of confidential information.27 
3. Whether the DSB authorization remains in effect 
5.4 Australia argues that a Member's annou ncement of its compliance with DSB 
recommendations and rulings triggers an obligation on a retaliating Member to  either cease retaliation 
or initiate a new process for a multilateral determinati on of compliance.  Australia claims that as seen 
in Articles 22.1 and 22.8 of the DSU, the right to suspend concessi ons authorized by the DSB is 
temporary and conditional upon the respondent continuing to be in non compliance or upon a solution not being reached.  According to Australia, by c ontinuing retaliation in the face of a respondent's 
notification of compliance, a complainant is effectively challenging the measure(s) taken to comply.  
According to Australia therefore, in such a case it is for the complainant to invoke a compliance panel 
pursuant to Article 21.5 of the DSU.
28 
5.5 Australia contends that the suspension of concessi ons or other obligations is the "last resort" 
for Members invoking the dispute settlement proce dures, as stated in Article 3.7 of the DSU.29 
4. Article 21.5 of the DSU 
5.6 Australia acknowledges that Article 21.5 of th e DSU does not explicitly place the obligation 
to invoke a compliance panel on a complaining part y.  The text simply provides that in cases of 
disagreement over compliance such dispute shall be decided through recourse to the dispute 
                                                      
25 Third party submission of Australia, para. 4. 
26 Replies by Australia to Panel questions concerning open hearings, question 1. 
27 Replies by Australia to Panel questions concerning open hearings, question 2. 
28 Third party submission of Australia, para. 5. 
29 Replies by Australia to Panel questions, question 5. WT/DS321/R 
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  settlement procedure.  Australia however argues that requiring a respondent to invoke a compliance 
panel against its own measure(s) constitutes an impl icit unilateral determinati on of inconsistency by 
the complainant and undermines the presumption that  Members act in good faith in taking action to 
comply with DSB recommendations and rulings.30 
5.7 Australia further submits that this position is consistent with Appella te Body findings on the 
presumption of good faith in Chile – Alcoholic Beverages ,31 where the Appellate Body stated that  
Members of the WTO should not be assumed, in any way, to have continued previous protection or 
discrimination through the adoption of a new measure , as this would come close to a presumption of 
bad faith.32  Australia also noted observations on g ood faith made by the Appellate Body in US – Hot-
Rolled Steel33and US – Line Pipe .34 
5.8 Australia thus points out that the fact that a complainant may have been granted temporary 
authorization to retaliate against a Member f ound to be in non-compliance does not change the 
fundamental application of the presumption of good faith.  Australia stresses that disregarding the 
presumption in the specific circumstances of a Member announcing that it has taken action which it considers brings it into compliance would go against the design and underlying logic of the DSU.
35  
5.9 Australia posits that the DSU is explicit on th e following points, which provide context for 
the interpretation of Article 21.5:36 
• Members must not take unilateral action to  seek redress for alleged violations of 
obligations or other nullification or im pairment of benefits (Article 23). 
• Instead, Members must have recourse to the DSU and abide with its rules and 
procedures (Article 23). 
• DSU procedures, including those provided for in Article 21, must be used to resolve 
disagreements over compliance (Article 23.1). 
• The suspension of concessions or other oblig ations is a "last resort" by Members and 
is temporary. That is, it is only authorized  until compliance is achieved (Articles 3.7 
and 22). 
5.10 Australia contends that by refusing to in voke a "compliance panel", a complainant who 
disagrees with the respondent's announcement of its  compliance allows the dispute to continue 
unresolved.37  Australia argues that the longer the time period in which the United States did not take 
action under Article 21.5, the greater the firmness or immutability the United States made of its 
determination. Australia emphasizes that this is  because a determination within the meaning of 
Article 23.2(a) of the DSU may be inferred on ce a certain amount of time has passed after 
communication by a responding party that it has complied and in which a complaining party continues to retaliate.  According to Australia therefore, th e longer the period of time that a complaining party 
                                                     
 
30 Third party submission of Australia, para. 6. 
31 Chile – Taxes on Alcoholic Beverages , (WT/DS87/AB/R and WT/DS110/AB/R), paragraph 74, 
(emphasis in original, footnote omitted). 
32 Third party submission of Australia, para. 7. 
33 US – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan  (WT/DS184/AB/R), 
para. 101. 
34 US – Definitive Safeguard Measures on Import of Circular Welded Carbon Quality Line Pipe from 
Korea  (WT/DS202/AB/R), para. 110. 
35 Third party submission of Australia, para. 8. 
36 Third party submission of Australia, para. 9. 
37 Third party submission of Australia, para. 10.  WT/DS321/R 
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  continues its retaliation in the face of this communica tion, the greater degree of certainty there is for 
the inference that the retaliating party has determined  that a violation has occurred, that benefits have 
been nullified or impaired or that the attainment of  any objective of the covered agreements has been 
impeded.38  
5.11 Australia argues that there is no procedure that  a Member claiming compliance can invoke in 
order to obtain a multilateral determination of act ual compliance.  According to Australia, the 
possibility of a new dispute whereby the origin al respondent complains against the continued 
retaliating measures on the basis of actual  compliance assumes that there is no obligation upon the 
retaliating Member to either initiate an Article 21.5 panel or cease retaliation after communication of 
compliance by a respondent, which is an incorrect interpretation of the DSU.39 
B. BRAZIL  
1. Introduction 
5.12 Brazil claims that it files the present submission in light of its interests in  the interpretation to 
be developed by the parties and the Panel in these proceedings.  Brazil states that it will address what 
it considers to be the fundamental objective of th e European Communities in the current dispute, 
namely to obtain multilateral recognition that it has fully implemented the recommendations of the 
DSB without having to bear the burden of proving how it would have effectively implemented those 
rulings.40 
2. Opening Panel meetings for observation by the public 
5.13 Brazil questioned the specific grounds and the DSU provisions on which the Panel based its 
decision to accept the parties' request to open th e panel meetings for observation by the public.  
According to Brazil, transparency is one of the key issues in the DSU review process and constitutes 
an important element in the debate carried out by  Members in the DSB meetings.  As such, Brazil 
notes that the debate on transparency will largely be nefit from any further clarification by the Panel as 
to the legal reasons which motivated its deci sion to open the meetings to the public.41  
5.14 Brazil argues that a decision on whether or not to open panels' proceedings to the public relies 
solely on the WTO membership, in particular th e DSU review process which is the appropriate locus  
to deal with issues regarding the Dispute Settlement Mechanism.  According to Brazil, if panels were 
to decide on this issue, they would go beyond their mandate, playing a role that is exclusive to the 
WTO membership.42 
5.15 Brazil further submits that the right to be presen t at or to watch a panel meeting should be 
granted first to WTO Members subject to the rules fo r third party participation set forth in Article 10 
of the DSU.  Brazil also contends that opening  the meetings to the public would represent a 
reinterpretation of Article 14 of the DSU, signaling that there are cases to wh ich confidentiality is not 
applied, such as Panel  a nd Appellate Body meetings.43 
                                                      
38 Third party submission of Australia, para. 10. 
39 Replies by Australia to Panel questions, question 4. 
40 Third party submission of Brazil, paras. 1 and 2. 
41 Oral statement of Brazil, para. 2. 
42 Replies by Brazil to Panel questions concerning open hearings, question 1. 
43 Replies by Brazil to Panel questions concerning open hearings, question 1. WT/DS321/R 
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  3. Whether the DSB authorization remains in effect 
5.16 In Brazil's point of view, the European Commun ities must prove that the new measure is in 
full compliance with the DSB recommendations.  Brazil stresses that the European Communities' 
claim is based only on a unilatera l sole assertion of compliance.  However, a mere assertion is 
insufficient to prove compliance.  Brazil submits  that the European Co mmunities may modify its 
legislation over and over and notify changes to th e WTO without actually bringing the measures into 
conformity with WTO rules.44 
5.17 Brazil considersthat if the European Commun ities argument were accepted, it would give the 
implementing Member the power to unilaterally dispel a previous multilateral determination 
authorizing suspension of concessions.  Brazil contends  that such Member would therefore be allowed 
to act as arbitrator, making use of a procedural artifice that could go on ad infinitum .  Brazil notes that 
it would be absurd to have that practice accepted as the common practice in the implementation of 
WTO disputes.  It would mean that  a mere asse rtion that a Member has changed a measure found to 
be inconsistent automatically revokes a DSB aut horization to suspend concessions, while exempting 
the Member from proving why and how the new measure complies with the DSB recommendations and rulings.
45  
5.18 Brazil submits that only in case of multilateral de termination confirming that the European  
Communities has fully complied could there be gr ounds for consideration of whether the United 
States and Canada are in breach of  Articles 23, 21.5, 3.7 and 22.8 of the DSU and Articles I:1 and II of the GATT'94, as claimed.
46  
5.19 Brazil argues that just as the initial imposition of  suspension of concessions must be preceded 
by a DSB determination of non-compliance, the au thorization for a Member to discontinue the 
suspension of those concessions can only be made by a DSB determination of compliance, be it for 
the initial suspension of concessions, or at a later st age for the lifting of the authorized suspension of 
concessions.47 
5.20 Brazil posits that the right to suspend concessi ons is temporary and conditional because it can 
only be applied based on a multilateral authorization (A rticle 23.2 (c) of the DS U) and until the party 
in violation complies with the recommendations of th e DSB or a mutually satisfied solution is agreed 
between the parties in the dispute (Article 22.1 and 22.8 of the DSU).48 
4. Article 21.5 of the DSU 
5.21 Brazil contends that the present situation is different from the one resulting from the 
relationship between Articles 21.5 and 22.6 of the DS U and it does not consider examples refered to 
by the European Communities regarding the US – Subsidies on Upland Cotton  dispute,49 and 
Softwood Lumber50disputes, to be applicable to the present proceedings.   Brazil  argues that the 
proceedings under Article 21.5 in those disputes had been already established at the time the 
implementing party requested the arbitration to dete rmine the level of the suspension of concessions.  
                                                      
44 Third party submission of Brazil, paras. 5 and 6 
45 Third party submission of Brazil, para. 8. 
46 Third party submission of Brazil, para. 9. 
47 Third party submission of Brazil, para. 20. 
48 Replies by Brazil to questions from the European Communities, question 3. 
49 US – Upland Cotton , WT/DS267/22. 
50 US – Softwood Lumber VI , WT/DS277/11.  WT/DS321/R 
 Page 79 
 
 
  Brazil stresses that in the current dispute, Article  21.5 proceedings and Article 22.6 arbitration are not 
"simultaneously ongoing", since no request for a compliance panel has been presented.51 
5.22 Brazil submits that in the post retaliation phase,  one should bear in mind that there is a 
multilateral authorization in effect.  According to Brazil, a presumption of good faith in carrying out 
the implementing measure cannot by itself override a DSB authorization.  That authorization should be revoked by a  multilateral determination of compliance not by a unilateral declaration of 
implementation or a presumption of compliance.
52 
5. Burden of proof 
5.23 Brazil posits that the party who makes a partic ular claim bears the burden of proof. Brazil 
further contends that by merely asserting that it h as removed the inconsistency found by the DSB, the 
European Communities is not supporting its claim.53  
5.24 Brazil also argues that the European Communiti es professes that no Member shall be 'judged' 
except through multilateral judicial proceedings.54   However, Brazil notes that this notwithstanding, 
the European Communities serves it self with a "blank authorization" to determine unilaterally its 
compliance with WTO obligations and the inconsis tency of the continued suspension of concessions 
granted by the DSB to the United States.  Brazil st ates that had the European Communities wanted to 
follow multilateral rules, it should have requested  an Article 21.5 compliance panel, as it did in EC – 
Bananas III (Article 21.5 – EC) .55   
5.25 Brazil argues that Article 21.5 of the DSU does not specify which Member is to initiate 
Article 21.5 proceeding.  Therefore, in Brazil's poi nt of view, when disagreement exists as to the 
consistency of the measures taken to comply with  the DSB recommendations, any party to a dispute 
may have recourse to the Article 21.5 proceedings.  Brazil asserts that nothing in the DSU precludes 
an implementing Member from resorting to an Artic le 21.5 panel review. Brazil further argues that 
Article 6 of the DSU provides a rule for the develo pment of special terms of reference, which could 
be applied in those cases where the implementi ng Member requests a panel to analyse its own 
measure.56 
C. CHINA  
1. Introduction 
5.26 China submits that the disputes raised in th is case are derived from loopholes embedded in the 
DSU.  China states that this brings to attenti on the importance of amending those loopholes in the new 
round of negotiation.  According to China, in absence of any revision of the DSU, it is a challenge for 
this Panel to find suitable dispute settleme nt solution according to the current DSU.57 
2. Opening Panel meetings for observation by the public 
5.27 China did not provide a reply on the potential le gal constraint that would exclude the Panel 
from opening the Panel meeting for observation by th e public.  China however preferred the Panel to 
                                                      
51 Third party submission of Brazil, paras. 22-24. 
52 Replies by Brazil to Panel questions, question 3. 
53 Third party submission of Brazil, paras. 10 and 11. 
54 See EC's first written submission, para. 1 
55 Third party submission of Brazil, paras. 13 and 14. 
56 Replies by Brazil to Panel questions, question 2 and 5. 
57 Third party submission of China, paras. 1 and 2. WT/DS321/R 
Page 80 
 
 
  meet the third parties in closed session.  It argues that based on Article 18.2 of  the DSU, panels do not 
have the right to unilaterally disclose the th ird party submissions and oral presentations.58 
3. The current status of the DSB authorized suspension of concessions 
5.28 China submits that under Article 22.8, a DSB au thorized suspension of concessions shall not 
be applied, if one of three of the following conditions has been met:59 
(a) The measure found to be inconsistent with  a covered agreement has been removed; 
(b) The Member that must implement the recommendations or rulings provides a solution 
to the nullification or impairment of benefits; 
(c) A mutually satisfactory solution is reached. 
5.29 China contends that if a mutually satisfactory so lution is reached by the parties on (a) or (b) 
above, it will fall into condition (c) and then a DSB authorized suspension of concessions shall not be 
applied.  China posits that if there is no mutua lly satisfactory solution reached by the parties on 
whether condition (a) and/or (b) above has been met, the parties have to invoke the dispute settlement 
procedures to let the Panel make such determinati on. China posits that in case the responding party 
declares any of the above conditions has been satisfi ed, there are only two options for the complaining 
party: (a) to admit the compliance of  new measures; or (b) to deny it.60  
5.30 In China's view, in case the original complaining party denies the compliance of new 
measures, that is, if no agreement is reached be tween the parties as to whether the conditions under 
Article 22.8 of the DSU have been met, under Article  23 of the DSU, the parties shall have recourse 
to the DSB's determination to avoid unilateral determination.61 
5.31 China thus considers that there are only two wa ys to terminate a DSB authorized suspension 
of concessions:  (i) to reach a mutually satisfactory solution; (ii) to get a final determination from the 
DSB.  According to China, this  is the case, even when the orig inal complaining party needs a 
reasonable period of time to evaluate the WT O consistency of the implementation measure.62 
5.32 China argues that the European  Communities' allegation that it has removed the measure at 
issue in itself could not give the European Comm unities ground to terminate the authorization of 
suspension of concessions.  China asserts that Artic le 23 of the DSU lays down the fundamental 
principle that the dispute settlement system of  the WTO is the exclusive means to redress any 
violation of any provision of the WTO Agreement.  It argues that since there is no mutually 
satisfactory solution between the European Commun ities and Canada, the DSB authorized suspension 
of concessions shall be applied until the DSB mak es a new determination on the authorization of 
suspension of concessions.  China notes that th e suspension of concessions pursuant to a DSB 
authorization is temporary and conditional, with th e condition being that the original responding party 
fully implements the rulings and recommendations of the DSB.  China emphasizes that no party can 
make a unilateral determination on whether condition (i) and/or (ii) has been met.63 
5.33 China emphasizes that if this Panel allows th e original responding party to terminate a DSB 
authorized suspension of concessions by introducing an  implementing measure, there is a risk that it 
                                                      
58 Replies by China to Panel questions concerning open hearings, questions 1 and 2. 
59 Third party submission of China, para. 6. 
60 Third party submission of China, paras. 7 and 8. 
61 Replies by China to Panel questions, question 7. 
62 Third party submission of China, para. 9. 
63 Third party submission of China, para. 10 and oral statement of China, paras. 3-4.  WT/DS321/R 
 Page 81 
 
 
  could be abused by an original responding party who, instead of bringing its measures into full 
conformity with the recommendations and rulings of  the DSB, may implement legislation which does 
not cure all the defects in its earlier inconsistent le gislation.  China argues that if this Panel finds a 
DSB authorized suspension of con cessions to remain in effect after the original responding party 
introduced an implementing measure, it can he lp enforcing WTO rules by inducing actual 
compliance.64 
5.34 China is of the view that the suspension of concessions has at least two functions: (i) to 
rebalance the interests among parties; (ii) to fo rce the responding party to bring its measure into 
compliance with the covered agreement.  China posits that if this Panel allows the original responding 
party to introduce an implementing measure to  override the DSB-authorized suspension of 
concessions, it invalidates the second function of suspension of concessions.65 
4. Article 21.5 of the DSU and burden of proof 
5.35 China states that Article 21.5 of the DSU does not preclude the original responding party 
from having recourse to the dispute settlement procedur es in the event that there is disagreement as to 
the existence or consistency w ith a covered agreement of measures taken to comply with the 
recommendations and rulings. China advances the following reasons for this argument.66 
5.36 First, according to China, it would be natural and logical only for the original complaining 
party to initiate an Article 21.5 proceeding. China quotes Chile – Alcoholic Beverages67 and Canada – 
Aircraft (Article 21.5 – Brazil)68and argues that the original responding party when adopting measures 
to implement recommendations and rulings of the DSB shall be presumed to have fulfilled its WTO 
obligations, and therefore, shall not bear the burden to demonstrate compliance.  China notes that this 
is further justified because th e European Communities' implementation measure requires conducting 
extensive scientific studies and performing a compre hensive risk assessment in a transparent and 
objective manner.  According to China therefore, after the European Communities notifies the DSB of 
its measure to implement the recommendation and ru lings of the DSB, it has fulfilled the procedure 
obligation under the DSU, and should not be required to bear the burden of proof.69 
5.37 Secondly, China refers to the practice of treaty interpretation as elucidated in Article 31.3 of 
the Vienna Convention on the Law of Treaties and Japan – Alcoholic Beverages II70, and points out 
that the statistics of panel proceedings on compliance under Article 21.5 of the DSU show that in most cases, it is the original complaining party that initiates the dispute settlement procedure under 
Article 21.5 of the DSU.  China stresses that the only precedent for an original responding party to 
initiate the dispute settlement procedure under Article 21.5 of the DSU is in the EC – Bananas
71 
dispute where the European Commun ities as an original responding party sought the establishment of 
a compliance panel under Article 21.5 of the DSU wi th the hope of preventing the United States from 
having recourse to Article 22.6 of the DSU directly.  China asserts that this subsequent practice in the 
                                                      
64 Third party submission of China, paras. 11 and 12. 
65 Replies by China to Panel questions, question 3. 
66 Third party submission of China, para. 15. 
67 Third party submission of China, para. 17. 
68 Third party submission of China, para. 18. 
69 Third party submission of China, paras. 19 and 20. 
70 See Appellate Body Report on Japan – Alcoholic Beverages II (WT/DS8/AB/R, WT/DS10/AB/R, 
WT/DS11/AB/R) p. 13 
71 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse 
to Article 21.5 by the European Communities , Report by the Panel (WT/DS27/RW/EEC), 12 April 1999 – 
report never adopted. WT/DS321/R 
Page 82 
 
 
  application of Article 21.5 of the DSU establishe s the agreement of the parties regarding their 
interpretation that the original complaining pa rty should initiate the Article 21.5 proceeding.72 
5.38 Thirdly, China argues, the balance of hardship  to initiate an Article 21.5 proceeding does not 
favour the original complaining party.  China belie ves that the original complaining party will suffer 
no cognizable harm if it initiates an Article 21.5 proceeding, because the DSB authorized suspension 
of concessions is still in effect.  China asserts that  it is not proper to let the European Communities 
initiate an Article 21.5 proceeding simply because the original complaining party is reluctant or has 
no incentive to do so.73 
5.39 China stresses that it should be presumed that wh en the original responding party introduces 
an implementation measure, it has fulfilled its WT O obligation, and it should be the duty of the 
original complaining party to demonstrate that th e implementation measure is still inconsistent with 
the covered agreement.  China believes if this Panel rules that the European Communities, as an 
original responding party, should initiate an Artic le 21.5 proceeding, it will unduly shift the heavy 
burden on the shoulders of the European Communiti es to establish the compliance, which is against 
the nature and logic of the Article 21.5 proceeding.74 
5.40 China contends that it is usually the case that  the responding party has more information on 
its implementation measure, therefore it is better positioned to demonstrate the WTO consistency of 
the measure.  However, according to China, the nature and logic of the Article 21.5 proceedings 
stands against this approach. China stresses that subs equent practice in the application of Article 21.5 
confirms this conclusion.  China is therefore of th e opinion that the original complaining party should 
bear the burden to institute the Article 21.5 proceeding.75 
5.41 China continues that the unique part of this case is that the original complaining party has a 
DSB authorized suspension of concessions.  Accord ing to China, in addition to the function of 
inducing compliance, this authorized suspension of  concessions can rebalance the trading relationship 
between the complaining and the original responding party in order to restore the economic equilibrium embodied in the original WTO deal.  China submits that if after the original panel 
proceeding, an original complaining party finds that the original responding party does not implement the recommendations and rulings of the DSB, it has incentive to initiate an Article 21.5 proceeding, 
because it still suffers from a WTO inconsistent measur e.  However, in this case, China submits that 
due to the rebalance by the authorized suspension of concessions, the original complaining party may 
not have the same incentive, therefore it may be necessary to set up a time limit for it to initiate an 
Article 21.5 proceeding.
76 
5.42 China argues that the proceedings under Artic le 21.5 of the DSU shall be initiated in a 
reasonable period of time.  China points out that it is in line with the good faith requirement 
established by Article 26 of the Vienna Convention on the Law of Treaties and it is also consistent 
with the requirement of "prompt settlement of situa tions" in Article 3.3 and the "temporary nature" of 
the retaliation system of the DSU.77 
5.43 China stresses that it wants to bring to th e Panel's attention that both Article 22.8 and 
Article 21.5 of the DSU do not preclude this Panel from setting a time limit to initiate the dispute 
settlement proceedings.  If this Panel holds that it sh ould be the original complaining party to invoke 
                                                      
72 Third party submission of China, paras. 21-24. 
73 Third party submission of China, para. 25. 
74 Third party submission of China, para. 26. 
75 Third party submission of China, paras. 27 and 28. 
76 Third party submission of China, para. 29. 
77 Third party submission of China, para. 31.  WT/DS321/R 
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  Article 21.5 of the DSU, to facilitate the implemen tation of this recommendation and ruling, it may be 
necessary to set up a time limit for the original complaining party to in itiate an Article 21.5 
proceeding.78 
5. Article 23.2 of the DSU 
5.44 China argues that to establish a violation of Article 23.2 (a), the Panel shall first assess 
whether the act of "determination" is made "in such cases", where a Member seeks the redress of a 
WTO violation.79 
5.45 China analyses the different interpretations of the term "seek the redress of violation" in  US – 
Section 301 Trade Act,80 in US – Certain EC Products "81 and in European Communities – Measures 
Affecting Trade in Commercial Vessels,82 and states that the term "seek  the redress of a violation" 
should be read broadly to cover any act as long as it seeks to obtain unilateral results that can be 
achieved through means other than recourse to the DSU.   China states that in this case, the original 
complaining party's continued suspension of con cessions could be considered as a measure seeking 
the redress of a WTO violation, if it had a chan ce to challenge the European Communities' WTO 
violation but held back, allowing the DSB au thorized suspension of concessions to apply 
continuously.83 
5.46 China argues that after the European Communitie s provided notice of the Directive to the 
DSB in October 2003, the original complaining pa rty cast doubt on the WT O consistency of this 
European Communities' implementation measure.  Since then the complaining party has had a 
reasonable period of time to review the European  Communities measure and to initiate Article 21.5 
proceedings.  China argues that it is the lack of action under Article 21.5 of the DSU by the original 
complaining party, rather than the DSB authori zed suspension of concessions itself, that may be 
considered as seeking the redress of a violation.84 
5.47 With respect to the meaning of the term "d etermination", China refers to the panel in US – 
Section 301 Trade Act85 and argues that the term "determination"  in Article 23.2(a) of the DSU needs 
to be read broadly and it does not require that a measure clearly sets out in its text that a WTO 
violation has occurred.  China argues that such a determination may be inferred from actions.  
According to China, the longer the time period in which the original complaining party took no action 
under Article 21.5 of the DSU, the greater the firmness or immutability it made such a 
determination.86 
5.48 China argues that where there is  no official determination, the Panel has to find a way to 
evaluate the firmness and immutability of the alle ged determination.  China notes that before the 
decision becomes final, there could be a gradual change process in which a time lapse can be a 
parameter.  According to China, in the post-retaliati on phase, the clock starts ticking when the original 
responding party introduces a new measure.  Chin a argues that the amount of time needed to 
constitute a final determination by the original  complaining party under Article 23 of the DSU 
depends on several factors, including  but not limited to (1) the complexity of the compliance measure; 
                                                      
78 Third party submission of China, para. 32. 
79 Third party submission of China, para. 35. 
80 See Panel Report on US – Section 301 Trade Act , para. 7.50, footnote 657. 
81 See Panel Report on US – Certain EC Products, paras. 6.22 and 6.23. 
82 See Panel Report on EC – Commercial Vessels, WT/DS301/R, para. 7.196 
83 Third party submission of China, paras. 36-39. 
84 Third party submission of China, para. 40. 
85 See Panel Report on US – Section 301 Trade Act , para. 7.50, footnote 657. 
86 Third party submission of China, paras. 41 and 42. WT/DS321/R 
Page 84 
 
 
  (2) sufficiency of information related to the comp liance measure; and (3) the ability of the original 
complaining party to evaluate such new measure.87   
D. INDIA  
1. Introduction 
5.49 India submits that it takes no position on the r espective assertions of the parties in this 
dispute.  India notes however that the treaty text is  not clear on the respective rights and obligations of 
the party taking a compliance measure and the party a pplying sanctions.  India contends that this is 
evidenced by the fact that this is one of the major issues on which the WTO Membership is currently 
engaged in negotiation with a view to improve or cl arify the legal text.  India states that it has views 
on how the lacunae in the DSU on this issue can be improved or clarified, but that is a matter for the Membership to decide through future negotiations.
88 
2. Opening Panel meetings for observation by the public 
5.50 India submits that the issue of external tr ansparency is being di scussed in the ongoing 
negotiations in the Special Session of the Dispute Settlement Body. India states that the negotiations 
have not yet been completed, and there is no c onsensus on whether and wh ich form of external 
transparency is acceptable to the WTO Members.  Until that happens, India believes that the Panel 
proceedings have to be in closed session,89 and its deliberations have  to remain confidential90 as 
provided in the DSU.91 
5.51 India posits that it is not a function of a panel to respond to any requests from the parties that 
do not assist in resolution of the matter before it, an d which are not in  the terms of reference of the 
panel.92 
5.52 India contends that the possibility of a pa nel to decide to deviate from the Working 
Procedures in Appendix 3 has been provided with a view to have panel procedures with sufficient 
flexibilities so as to ensure high-quality panel reports93.  In India's view, deviation from the Working 
Procedures, therefore, should meet this qualitative objective.  India quotes Article 12.1 of the DSU 
and the Panel in India – Patents (US)94 and argues that although p anels are given some discretion in 
establishing their own working procedures, they do no t have the discretion to modify the substantive 
provisions of the DSU.  India argues that the conf identiality requirements for panel proceedings are a 
substantive provision of the DSU, and the Panel cannot  use its discretion to modify them in order to 
cater to a request by the parties on a matter that does not serve to improve the quality of the Panel's 
Report.95 
5.53 India argues that Article VII of the Rules of Conduct96 requires each "covered person" to 
maintain the confidentiality of di spute settlement deliberations and proceedings at all times.  India 
                                                      
87 Replies by China to Panel questions, question 1. 
88 Oral statement by India, para. 3. 
89 Paragraph 2 of the Working Procedures in Appendix 3 of the DSU 
90 Paragraph 3 of the Working Procedures in Appendix 3 of the DSU 
91 Replies by India to Panel questions concerning open hearings, question 1. 
92 Oral statement of India, para. 5. 
93 Article 12.2, DSU 
94 India – Patent Protection for Pharmaceutical and Agricultural Chemical Products – Complaint by 
the United States , Panel Report, WT/DS50/R. 
95 Oral statement of India, para. 6. 
96 Rules of conduct for the understanding on rules and procedures governing the settlement of disputes 
adopted by the DSB on 3 December 1996 (WT/DSB/RC/1).  WT/DS321/R 
 Page 85 
 
 
  questions how the Panel is going to ensure th at these requirements are met after opening the 
proceedings to the public for observation.97  
5.54 India submits that the decision of the Panel to  open its proceedings to the public necessarily 
involves some issues on which consultation and d ecisions with WTO members, and not just the 
parties and third parties, would have been necessary.   For example, India questions how the Panel, at 
its own level, addressed issues relating to the implicat ions on the functioning of the WTO Secretariat, 
budgetary implications and implications relating to the use of the official languages of the WTO, for 
which rules and practices have been established by other bodies of the WTO.  India also questions 
how the Panel could take a view on the additiona l costs arising out of the opening up of the 
proceedings to public without the Budget  Committee having considered the matter.98 
5.55 According to India, the WTO is a Member driven organization and it is solely for the WTO 
Members to decide whether or not to change th e WTO rules and open up panel proceedings to the 
public; a Panel cannot take upon itself that function, even at the request of parties to the dispute.99  
5.56 India posits that the meeting of the Panel's ses sion with the third parties should be in closed 
session as required under paragraph 2 of the Work ing Procedures contained in Appendix 3 of the 
DSU.100 
E. MEXICO  
1. Introduction 
5.57 Mexico submits that the systemic implications of  this dispute are of great importance in terms 
of the functioning of the DSU and in particular of defining a way of proceeding when there is an 
authorization to suspend benefits and then furt her disagreement as to whether or not the DSB's 
recommendations and rulings have been implemented.  In Mexico's view, the most important issue in 
this case is whether the adoption of implementati on measures "require" immediate termination of 
retaliatory measures and if not, who should require termination and how.  According to Mexico, the 
role of the Panel in this case is to give precise answ ers to these questions and to ensure that they fulfil 
not only the letter of the DSU, but also the objectiv es of security, predictability and prompt settlement 
of the dispute.101 
2. Opening Panel meetings for observation by the public 
5.58 Mexico disagreed with the opening of the panel meetings to the public on the grounds that 
panel meetings constitute panel "de liberations" and as such should be confidential, as per Article 14.1 
DSU.  Mexico also argues that tr ansparency is a sensitive issue that  is currently under discussion in 
the negotiations to amend the DSU thus to force one  or another negotiating position by taking such a 
decision is inappropriate.  Mexico argues that the DS U rules require that the meetings be confidential 
and therefore, bilateral agreement among parties is not  suffice to bend the rules. In its view, therefore, 
the decision of the two parties should only prevail to the extent that it does not affect the right of  
other DSB Members including third parties.  Mexico c ontends that if the Panel is to depart from the 
Working Procedures of Appendix 3, the Panel must do so with caution as such deviation is meant to 
grant flexibility so as to ensure high qualit y panel reports, as seen in Article 12.2 DSU.102 
                                                      
97 Oral statement of India, para. 7. 
98 Oral statement of India, para. 8. 
99 Oral statement of India, para. 9. 
100 Replies by India to Panel questions concerning open hearings, question 2. 
101 Replies by Mexico to Panel questions concerning open hearings, question 1, paras. 2, 3 and 9. 
102 Oral statement of Mexico, para. 2;  Replies by Mexico to Panel questions, paras. 3 and 9. WT/DS321/R 
Page 86 
 
 
  5.59 Mexico emphasizes that public hearings are a cr oss-cutting issue that should be addressed in 
all the discussions conducted in the WTO, and shou ld not be imposed by a panel at the request of 
three Members.  Mexico regrets that the decision w ill set a precedent that may affect the outcome of 
the negotiations and which will in all likelihood end up complicating the preparation of working 
procedures of future panels.103 
5.60 Mexico notes that if the Panel is to open the meetings to the public observation, as a policy 
perspective, it poses systemic questions as to the n ecessity to open negotiation meetings and ordinary 
sessions of the WTO bodies to the public.104  Mexico suggests that third party sessions follow the 
established WTO practice of being closed session.105 
3. Whether the DSB authorization remains in effect 
5.61 According to Mexico, the Panel should reject the argument that a simple unilateral 
notification is enough to reduce multila teral effort to nothing.  Mexico contends that the Panel should 
bear in mind the lengthy procedure and high po litical costs to Members of obtaining a multilateral 
authorization to suspend concessions.106 
5.62 Mexico stresses that it can not allow a dispute se ttlement system to deprive all effect of the 
authority to suspend benefits when a Member has failed to implement the DSB's recommendations 
and rulings within the reasonable peri od.  In its view, in such a case, if the parties fail to agree, the 
matter must be resolved by a multilateral decision.107 
5.63 Mexico argues in its reply to the questions posed by the European Communities that a DSB 
decision may be affected only by another DSB deci sion taking away the effect of the first decision.108  
4. Article 21.5 of the DSU 
5.64 Mexico claims that Article 21.5 DSU affords th e most suitable procedure for resolving this 
dispute and it could be initiated by any party.  Me xico however submits that the dispute could be dealt 
with either by an ordinary panel, or through arbitr ation under Article 25 DSU or indeed by any of the 
proceedings provided for in Article 5 DSU.  Mexi co however points out that it takes a constructive 
approach and good will by the parties to make Artic le 21.5 DSU function and be able to resolve any 
disagreements.109   
F. NEW ZEALAND  
1. Introduction 
5.65 New Zealand submits that this case raises  important issues about the integrity and 
effectiveness of the WTO dispute settlement system , as it is principally about issues of compliance 
and the proper interpretation and application of the rules of the DSU as they relate to the post-
retaliation phase.  In New Zealand's view, the cas e taken by the European Communities is for all 
intents and purposes a compliance case and is thus akin to an Article 21.5 case.  According to New 
Zealand, the same determinations are required to r esolve the case at hand, as would be required had it 
                                                      
103 Oral statement of Mexico, para. 3. 
104 Replies by Mexico to Panel questions concerning open hearings, question 1, para. 7. 
105 Replies by Mexico to Panel questions concerning open hearings, question 2. 
106 Oral statement of Mexico, para. 5. 
107 Oral statement of Mexico, para. 4. 
108 Replies by Mexico to questions from the European Communities, question 4. 
109 Oral statement of Mexico, para. 6.  WT/DS321/R 
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  been commenced under Article 21.5. In New Zeal and's view, the Panel's terms of reference110 are 
sufficiently broad to encompass this question a nd in doing so, the Panel should focus on actual 
compliance and not presumed compliance.111 
2. Opening Panel meetings for observation by the public 
5.66 According to New Zealand, there are no legal constraints that would prevent the Panel from 
opening the Panel hearings to the public. New Z ealand quotes Article 12.1 wh ich allows panels to 
follow Working Procedures unless the panel decid es otherwise after consulting the parties.  
New Zealand argues that while Appendix 3 provi des for closed session hearings, the Working 
Procedure can be amended on the cons ent of the panel and the parties.  New Zealand further stipulates 
that the reference in Article 14.1 of the DSU to pa nel deliberations being confidential refers to the 
internal deliberations of the panel, not the hearings with the parties.  New Zealand submits that this is 
in line with the practice of other internationa l tribunals which have open hearings but whose 
deliberations are nonetheless confidential.  According to New Zealand, Article 18.2 of the DSU 
allows parties to waive confidentiality.  New Zeala nd did not object to its third party hearings being 
public.112  
3. Whether the DSB authorization remains in effect 
5.67 New Zealand submits that there is no obligati on on the United States to take an Article 21.5 
case, and that in the absence of a determination of  compliance from the DSB, the DSB's authorization 
of suspension of concessions remains valid.113 
5.68 New Zealand argues that underlying the Eur opean Communities' arguments is the assumption 
that it should benefit in these circumstances from a presumption of compliance on the basis of the 
principle of good faith.114  New Zealand however does not agree that the said principle applies in the 
current circumstances, to require the United St ates to cease the suspension of concessions and 
commence Article 21.5 proceedings simply because the European Communities has notified that it 
now considers itself to be in compliance.  Accord ing to New Zealand, a presumption of good faith 
cannot override an explicit multilateral authorizati on from the DSB to impose a retaliatory suspension 
of concessions.115 
5.69 In New Zealand's view, the cases cited by the European Communities in support of the 
application of a presumption of compliance involve  measures that were implemented within the 
reasonable period of time and where there was no au thorization to suspend concessions, which is not 
the situation at present.  New Zealand opines that  even if it can be said that a presumption of 
compliance operates in the pre-retaliation period wh ile the reasonable period of time is still pending, 
in the current circumstances any presumed complia nce on the part of the European Communities has 
                                                      
110 WT/DS320/6 of 14 January 2005 and WT/DS/320/7.  The Request for the Establishment of a Panel 
by the European Communities states, inter alia , that: 
The United States has acted inconsistently with Article 22.8 of the DSU by failing to apply the 
suspension of concessions or other obligations only until such time as the measure found to be inconsistent with 
a covered agreement has been removed , or the implementing Member has provided a solution to the 
nullification or impairment of benefits previously  caused to the United States. (emphasis added). 
111 Third party submission of New Zealand, paras. 1.06 and 2.19. 
112 Replies by New Zealand to Panel questions concerning open hearings, questions 1 and 2. 
113 Third party submission of New Zealand, para. 2.09. 
114 The European Communities sets out its arguments on the 'presumption of compliance' in 
paras. 81-94 of its First Written Submission in addressing its argument that the United States is in violation of Article 23.1 read together with Articles 22.8 and 3.7 of the DSU. 
115 Third party submission of New Zealand, paras. 2.10 and 2.11. WT/DS321/R 
Page 88 
 
 
  given way to the actual compliance of the suspensi on of concessions which has been duly authorized 
by the DSB.116 
4. Articles 21.5, 22.8 and 23 of the DSU 
5.70 New Zealand argues that while it would be ope n to the respondent to initiate compliance 
review under Article 21.5, the argument that Article  23 read with Articles 21.5, 22.8 and 3.7 imposes 
a requirement to do so cannot be sustained.  New Zealand insists that Article 21.5 merely states that 
the disagreement shall be dealt with through recour se to the dispute settlement procedures, but does 
not place any particular onus on any one to commence proceedings.117 
5.71 New Zealand contends that Article 23 is the framework provision setting up the requirement 
to have recourse to dispute settlement when seek ing redress of a violation of obligations.  New 
Zealand however argues that Article 23 does not addr ess the specific situation in this case, where the 
United States has had recourse to dispute settlement in accordance with this Article and has taken all 
the steps there identified.  New Zealand submits th at Article 23 does not impose an obligation on the 
United States to cease the applicati on of the suspension of concessions or to take a compliance review 
case where it does not accept that the measure ha s been removed.  Nor does it do so when "read 
together" with Articles 3.7 and 22.8.  New Zeala nd argues that it cannot see how these provisions can 
be read to displace the specific authorization under Article 22.6, which has never been revoked.118 
5.72 New Zealand posits that if the Panel were to adopt the European Communities' approach, it 
would give rise to a situation where an implementing Member could continually impose successive rounds of litigation at will, by a mere assertion of compliance.  In New Zealand's view this could 
render useless the mechanism of suspension of concessions.  According to New Zealand, this 
approach is inconsistent with the aims and obj ectives of the dispute settlement system given the 
fundamental importance of suspension of concessions  as the 'last resort' of the dispute settlement 
system, as per Article 3.7 DSU.
119 
5.73 New Zealand points out that the suspensi on of concessions may not be maintained 
indefinitely in circumstances where the violation h as been addressed as stipulated in Article 22.8 of 
the DSU. According to New Zealand, if the r espondent maintains the suspension notwithstanding, 
then there is a "disagreement as to  the existence or consistency ... of measures taken to comply" with 
the recommendations within the terms of Article 21.5. As a consequence it is open to the party 
concerned about this to have recourse to th e dispute settlement procedures to resolve the 
disagreement.120   
5.74 New Zealand notes that this does not mean howev er, that sanctions may go on forever even in 
cases where there is full compliance but the new me asure has not been challenged.  New Zealand 
considers that if a measure taken to comply do es indeed remove the inconsistency with  the 
recommendations and rulings of the DSB, the su spension of concessions should be ceased.  In its 
view, the justification for continuing to suspend concessions would be the combination of the continuing DSB authorization and the absence of an y agreement that the original respondent has 
brought its measures into compliance.
121 
                                                      
116 Third party submission of New Zealand, para. 2.12. 
117 Third party submission of New Zealand, para2.14. 
118 Third party submission of New Zealand, paras. 2.14-2.16. 
119 Third party submission of New Zealand, para. 2.17. 
120 Third party submission of New Zealand, para. 2.18. 
121 Replies by New Zealand to questions from the European Communities, questions 4 and 5.  WT/DS321/R 
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  5.75 In New Zealand's view, it is possible for an im plementing Member to initiate an Article 21.5 
proceeding in any case "where there is disagreement as to the existence or consistency with a covered 
agreement of measures taken to comply with  the recommendations and rulings" of the DSB.122 
5.76 New Zealand states that Article 21.5 does not sp ecify the procedures to be applied, beyond 
stipulating that the matter be referred to the origin al panel and that there be an accelerated timeframe 
for circulation of the report.  It further contends th at the consequence is that it is up to the Panel to 
establish the Panel procedures in accordance with Article 12 of the DSU.123 
5.77 New Zealand submits that there is no textual basi s in the DSU for concluding that an original 
complainant that maintains a multilaterally authori zed suspension of concessions after notification of 
a compliance measure by the original respondent and does not initiate Article 21.5 proceedings, is in 
violation of its obligations under the DSU.124 
5. Burden of proof 
5.78 New Zealand submits that the European Co mmunities bears the burden of proving a prima 
facie inconsistency with Article 22.8 of the DSU.  New Zealand refers to the Appellate Body decision 
in US – Wool Shirts and Blouses125, and contends that the European Communities must adduce 
evidence sufficient to raise a presumption that th e suspension of concessions continues to apply and 
that: (a) it has removed the measure found to be inconsistent with the SPS Agreement ; or (b) it has 
provided a solution to the nullification or impairme nt of benefits; or (c) a mutually satisfactory 
solution has been reached.  The Eu ropean Communities does not argue (b), and (c) is clearly not the 
case, but it instead relies on (a).126 
5.79 New Zealand submits that the European Commun ities has not demonstrated in its first written 
submission that it has removed the inconsistent measur e.  According to New Zealand, 'removal' of an 
inconsistent measure for the purposes of Article 22.8 of the DSU may be interpreted as compliance 
with the recommendations and rulings of the DSB.   'Removal' of the measure in this case could 
involve the removal of the import prohibition and/or  establishing a justification for the prohibition 
through a risk assessment consistent with the SPS Agreement , taking into account the particular 
requirements which the Panel and Appellate Body reports identified.127 
6. Article 5.7 of the SPS Agreement   
5.80 New Zealand posits that as the Member seeking to have recourse to Article  5.7, the burden of 
proof rests on the European Communities to demonstrat e that the four requirements of that provision 
have been met.128  New Zealand is of the view that while not explicitly stated by the European 
Communities, the provisional import ban on the five hormones other than oestradiol-17 β appears to 
be an attempt to bring those measures within the qualified exemption provide d of Article 5.7 of the 
SPS Agreement .  According to New Zealand, as seen in Japan – Agricultural Products II129, the 
European Communities must demonstrate that: (a) its measure was imposed in a situation where 
                                                      
122 Replies by New Zealand to questions from the European Communities, question 6. 
123 Replies by New Zealand to Panel questions, question 2. 
124 Replies by New Zealand to Panel questions, question 5. 
125 United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India (US – 
Wool Shirts and Blouses) , WT/DS33/AB/R, 25 April 1997, p. 14. 
126 Third party submission of New Zealand, paras. 2.21-2.22 
127 Third party submission of New Zealand, para. 2.26. 
128 The Panel in Japan – Measures Affecting the Importation of Apples  (Japan – Apples ), 
WT/DS245/R, 15 July 2003, discussed at para. 8.212 the burden of proof under Article 5.7. 
129 Appellate Body Report on Japan – Measures Affecting Agricultu ral Products (Japan  – Agricultural 
Products II) , WT/DS76/AB/R, 22 February 1999, para. 89. WT/DS321/R 
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  'relevant scientific evidence is insufficient'; and th at (b) its measure was adopted "on the basis of 
available pertinent information, including that from relevant international organisations as well as 
from sanitary or phytosanitary measures applied by other Members."130 
5.81 New Zealand claims that pursuant to the sec ond sentence of Article 5.7, the European 
Communities may not maintain its measure unless it also: (a) 'seek[s] to obtain the additional 
information necessary for a more objective assessmen t of risk'; and (b) 'review[s] the measure 
accordingly within a reasonable period of time'.  Ne w Zealand posits further that the Appellate Body 
added that "[w]herever one of these four requirements is not met, the measure at issue is inconsistent 
with Article 5.7."131  New Zealand argues that the European Communities states that its provisional 
ban on five of the six hormones was adopted "on the basis of the available but still incomplete 
data".132  However, according to New Zealand, the European Communities is not required under 
Article 5.7 to show that the relevant scientific  evidence was 'incomplete', but rather that it was 
'insufficient'.  New Zealand quotes the Appellate Body in the Japan – Apples  case, which analysed the 
meaning of this expression that:133 
" '[R]elevant scientific evidence' will be  'insufficient' within the meaning of 
Article 5.7 if the body of available scien tific evidence does not allow, in quantitative 
or qualitative terms, the performance of an adequate assessment of risks as required 
under Article 5.1 and as defined in Annex A to the SPS Agreement ."134 
5.82 New Zealand is of the opinion that the Eur opean Communities in its first written submission 
does not establish a prima facie case that relevant sc ientific evidence does not allow an adequate risk 
assessment to be carried out.  New Zealand argues that the European Commun ities fails in its first 
written submission to explain how the current st ate of scientific knowledge has prevented it from 
conducting an adequate risk assessment with r espect to the five hormones.  According to 
New Zealand, this is even more difficult to unde rstand when the same measure, an import ban, which 
the European Communities previous ly maintained was based on suffi cient scientific evidence to be 
definitive, is now held out as a merely 'provisional' measure.135  
5.83 New Zealand submits that on the other hand, the respondent in its first written submission 
shows that a considerable body of relevant scientif ic evidence exists as to the use of hormones for 
growth promotion purposes.136  New Zealand argues that the United States points out that the 
hormones at issue have been "intensively studied over the last twenty-five years"137 and that the five 
particular hormones subject to the provisional ban have been "studied in greater detail in the 
intervening period (since the original Hormones  case)".138  According to New Zealand, the inference 
to be taken is that the relevant scientific evidence is both quantitatively and qualitatively sufficient to 
have enabled the European Communities to conduct an  adequate risk assessment, and avoid the need 
for recourse to provisional measures.139 
5.84 New Zealand further opines that even if the Pa nel were to accept that there was insufficient 
scientific evidence for the European Communities to conduct an adequate risk assessment, the 
European Communities must also show that its ne w measure was adopted 'on the basis of available 
                                                      
130 Third party submission of New Zealand, paras. 2.28 and 2.29. 
131 Appellate Body Report on Japan – Agricultural Products II , para. 89.  Emphasis original. 
132 EC's first written submission, para. 145. 
133 Third party submission of New Zealand, paras. 2.30-2.32. 
134 Appellate Body Report on Japan – Apples , para. 179. 
135 Third party submission of New Zealand, para. 2.34. 
136 See US's first written submission at paras. 55-91. 
137 US's first written submission, para. 122. 
138 US's first written submission, para. 123. 
139 Third party submission of New Zealand, para. 2.35.  WT/DS321/R 
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  pertinent information'.  New Zealand stresses that in order to satisfy the burden of proof, the European 
Communities must present the 'available pertinent info rmation' it evaluated and the factors that led it 
to conclude that a provisional import ban on the five hormones could reasona bly be based on this 
information.  New Zealand states that the Europ ean Communities failed in its first written submission 
to establish any connection between its provisional  import ban and: (a) the available pertinent 
information; (b) information from relevant inte rnational organisations; and (c) information from 
sanitary or phytosanitary measures applied by other Members.140 
5.85 According to New Zealand, by contrast, the United States claims that a large body of 
'available pertinent information'141 indicates that proper use of the hormones in question poses no risk 
to consumers.142   
5.86 New Zealand submits that under the third limb of Ar ticle 5.7, in a situation where the relevant 
scientific evidence is insufficient to conduct an adequate risk assessment, the European Communities 
is required to 'seek to obtain the additional info rmation necessary for a more objective assessment of 
risk'.  New Zealand contends that the European Co mmunities implies that this requirement is reflected 
in Directive 2003/74/EC, which obliges the Commission "to seek more complete scientific information from any source which c ould shed light and clar ify gaps in the present state of knowledge 
on [the hormones]."
143  New Zealand however submits that  the European Communities offers no 
evidence in its first written submission to explain how the Commission is fulfilling this obligation.144 
5.87 New Zealand further opines that the final element of Article 5.7 requires the European 
Communities to 'review' its provisional measures 'w ithin a reasonable period of time'.  New Zealand 
notes that while a competent WTO body has yet to analyse what constitutes a 'reasonable period of 
time,' Directive 2003/74/EC has been in force for nearly two years, but the European Communities 
makes no suggestion in its first written submission th at a review of the provisional import ban is 
contemplated at all, let alone within a 'reasona ble period of time'.  New Zealand submits that the 
European Communities has failed to discharge its burden of proof with respect to the four elements of 
Article 5.7 in its first written submissions.145 
7. Article 5.1 of the SPS Agreement   
5.88 New Zealand alleges that the European Commun ities has not demonstrated in its first written 
submission that its new measures meet the requirements of Article 5.1 SPS Agreement .  New Zealand 
contends that the Appellate Body in EC – Hormones  established that the obligation in Article 5.1 
contains two elements: (a) an assessment of risk s; and (b) that Members ensure that their SPS 
measures are "based on" such an assessment.  New Z ealand argues that concerning the first element of 
Article 5.1, paragraph 4 of Annex A of the SPS Agreement  sets out the definition of a "risk 
assessment".  New Zealand quotes the Appellate Body146  that recalled Article 5.2 of the 
SPS Agreement , which provides an indicative list of factors that must be taken into account in a risk 
assessment.147 
5.89 New Zealand further argues that the panel in the Japan – Apples  case summarised its 
consideration of the elements of Article 5.1 by r ecalling that a risk assessment would also involve an 
evaluation of whether the risk assessment was 'as ap propriate to the circumstances', and whether it 
                                                      
140 Third party submission of New Zealand, para. 2.36. 
141 See US's first written submission, paras. 127-128. 
142 Third party submission of New Zealand, para. 2.37. 
143 EC's first written submission, para. 145. 
144 Third party submission of New Zealand, para. 2.38 
145 Third party submission of New Zealand, paras. 2.38 and 2.39. 
146 Appellate Body Report on EC – Hormones , para. 187. 
147 Third party submission of New Zealand, paras. 2.42-2.44. WT/DS321/R 
Page 92 
 
 
  took into account 'risk assessment techniques develope d by the relevant international organizations'.148  
New Zealand posits that the panel in that case adde d that these two factors would "pervade the entire 
assessment of the risk".149 
5.90 New Zealand stresses that while the European Communiti es claims to have conducted "a 
comprehensive risk assessment" since the Appellate Body decision in 1998150, it devotes only three 
paragraphs of its first written s ubmission to attempting to establish what constitutes a valid risk 
assessment for the purposes of Article 5.1.  New Zealand submits that the European Communities 
notes that it has initiated 17 scientific studies and resear ch projects, but enters into no discussion of 
the substance, conduct or conclusions of these studies.151  According to New Zealand, the European 
Communities observes that it addressed specific request s for scientific data to several countries and 
published an open call for relevant and recent scien tific data and information from any interested 
party, but makes no comment on the information received.152   
5.91 New Zealand further opines that in its firs t written submission, the European Communities 
simply refers to the SCVPH Opinions and presents a three-paragraph excerpt from Directive 2003/74/EC
153 which provide, on the face of it, a rath er limited and constrained justification 
for the European Communities' import ban.  Further, New Zealand posits that the European Communities articulates no clear link between "excess intake of hormone residues" (which is not 
defined in relation to use as a growth-promoting hormone) and "a risk" that has been identified.
154 
5.92 In New Zealand's view, the European Communitie s' recital and its bare conclusion fall well 
short of demonstrating that the European Comm unities has met the threshold required under the 
SPS Agreement  for the existence of a valid risk assessment.   New Zealand notes that in particular, the 
European Communities fails in its first written subm ission to adduce sufficient evidence that its risk 
assessment: (a) adequately identifies any adverse ef fects on human health arising from the presence of 
the hormones in question when used as growth promoters in meat;155 (b) evaluates the potential or 
possibility of occurrence of  such adverse effects;156 (c) is 'as appropriate to the circumstances';157 
(d) takes into account risk assessment techniqu es developed by the relevant international 
organisations;158 and (e) takes into account the available scientific evidence as ma tters specified in 
Article 5.2 of the SPS Agreement .159 
5.93 New Zealand argues that none of these criteria is optional in the performance of a risk 
assessment, and therefore the Europ ean Communities is required to demonstrate that all of them have 
been satisfied in the development of its opini ons.  New Zealand submits that the European 
Communities has failed to adduce sufficien t evidence to discharge this burden.160 
                                                      
148 Panel Report on Japan – Apples , para. 8.236. 
149 Panel Report on Japan – Apples , para. 8.237. 
150 EC's first written submission, para. 142. 
151 EC's first written submission, para. 142. 
152 Third party submission of New Zealand, para. 2.48. 
153 EC's first written submission, para. 144. 
154 Third party submission of New Zealand, para. 2.49. 
155 SPS Agreement , Annex A, paragraph 4.  Extrapolated from the Panel Report in EC – Hormones , 
para. 8.101, as considered in the Appellate Body Report at paras. 183-184. 
156 SPS Agreement , Annex A, paragraph 4.  Extrapolated from the Panel Report in EC – Hormones , 
para. 8.101, as considered and modified in the Appellate Body Report at paras. 183-184. 
157 SPS Agreement , Article 5.1. 
158 SPS Agreement , Article 5.1. 
159 Third party submission of New Zealand, para. 2.51. 
160 Third party submission of New Zealand, para. 2.52.  WT/DS321/R 
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  5.94 New Zealand contends that in contrast, the United States outlines some of the scientific 
evidence that exists on the use of growth-promoting hormones161, and evokes long-standing practice 
on the proper assessment of risks related to veterinary drug residues.162  According to New Zealand, 
this casts doubt on both the process and the s ubstance of the European Communities' risk 
assessment.163 
5.95 New Zealand states that in the event that the Panel decides that the European Communities' 
opinions constitute a valid risk ass essment for the purposes of Article 5.1, the European Communities 
is also required to demonstrate that the measure s in question are 'based  on' a risk assessment.  
According to New Zealand, the Appellate  Body analysed this relationship in EC – Hormones164, and 
states that the term 'based on' required a certain objective relationship between the risk assessment and 
the measure in question.165   
5.96 New Zealand argues that the European Communitie s does not attempt to explain in what way 
or to what extent its new measures are considered to be 'in accordance' with the scientific conclusions 
of the SCVPH.  New Zealand further stipulates that  the European Communities offers no basis at all 
for concluding that its risk assessment 'reasonabl y supports' its new measures.  New Zealand argues 
that in this case, the European Communities bears the burden of establishing that its risk assessment 
'sufficiently warrants' the new measures it adopted.  In New Zealand's view it was not open to the 
European Communities to leave the existence of a 'rational relations hip' to be inferred from a brief 
summary of the conclusions of the European Communities' opinions.166 
G. NORWAY  
1. Opening Panel meetings for observation by the public 
5.97 Norway considers that Article 12.1 of the DSU gives the Panel the discretion to follow other 
working procedures than the ones provi ded in Appendix 3 after consulting the parties.  It sees no legal 
constraints in granting the request to the parties to  open the hearings to the public.  Norway also 
agrees to have the third party session of  the hearing open to the public.167 
2. Whether the DSB authorization remains in effect 
5.98 Norway considers that the right to apply th e suspension of concessions pursuant to a DBS 
authorization is temporary and conditional.  Accordi ng to Norway, the application of the right rests on 
two basic conditions.  First; that there be an aut horization pursuant to Article 22.6 DSU and that the 
conditions set out in Article 22.6 DSU and 22.7 DSU, are respected  and secondly, that the temporal 
condition of Article 22.8 is met.168 
5.99 Norway opines that the temporal condition in Article 22.8 has three alternative elements: 
(a) the measure found to be inconsistent with a covered agreement has been removed; or (b) the 
Member that must implement recommendations or rulings provides a solution to the nullification or 
impairment of benefits; or (c) a mutually satisfactory solution is reached.169  
                                                      
161 See, for example, US's first written submission, paras. 55-91. 
162 US's first written submission, para. 136. 
163 Third party submission of New Zealand, para. 2.53. 
164 Appellate Body Report on EC – Hormones , para. 193. 
165 Third party submission of New Zealand, para. 2.55. 
166 Third party submission of New Zealand, para. 2.58. 
167 Replies by Norway to Panel questions concerning open hearings, question 1 and 2. 
168 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 2. 
169 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 3. WT/DS321/R 
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  5.100  Norway contends that the common concept in all the three elements is that continued 
suspension is related to continued non-compliance or  lack of any other mutually satisfactory solution 
to the inconsistency.  According to Norway therefor e , the temporal condition is intrinsically linked to 
the substance of compliance.  Norway posits that out  of the three elements, the third one, "a mutually 
satisfactory solution", can in principle be achieve d at any point in time and once achieved, would 
resolve the matter and no suspension may continue.  Norw ay adds that this is even so if the original 
measure found to be inconsistent with  a covered agreement is still in place.170 
5.101  Norway considers that the first two elements are in reference to compliance, which can be 
achieved through the removal of the original measur e or through another solution to the nullification 
or impairment of benefits, and the second elemen t is the normal situation where one measure is 
replaced by another measure.171 
5.102  Norway submits that once compliance is achieve d, be it through a simple revocation of the 
inconsistent measure or its repla cement with another measure that ensures compliance, the right to 
suspend obligations automatically lapses.  Norway is  of the view that similarly, once compliance has 
been established by a panel pursuant to Article 21. 5 of the DSU, the previous authorization lapses 
ipso facto  once the report is adopted, without there being a need for the DSB to revoke it formally as 
the temporal condition no longer exists.172 
5.103  Norway contends that once a measure taken to comply is notified by the original respondent, 
the question arises whether this amounts to full co mpliance or not.  Norway submits that if the 
original complainant considers that the measure taken to comply falls short of what is required by the 
adopted rulings and recommendations, then the obliga tion to refer a "compliance dispute" to a panel 
according to Article 21.5 is incumbent upon them.173 
3. Article 21.5 of the DSU 
5.104  Norway argues that the situation addressed by Article 21.5 DSU occurs when the original 
respondent claims to have complied with the recomm endation and ruling of the DSB, but the original 
complainant disagrees.  According to Norway, Ar ticle 21.5 is competent both where the parties 
disagree as to the very existence of measures take n to comply, and where they disagree as to whether 
the measures taken to comply actually achieve complia nce.  Norway is of the view that the case at 
hand is typical in this respect, and falls squarely w ithin the ambit of Article 21.5. Norway notes that 
neither Article 22.8 nor Article 21.5 sets forth time lines in this respect.174 
5.105  According to Norway, the origin al complainant must be accorded a certain amount of time to 
assess the measure before going to a compliance panel.  Norway posits that the length of time needed 
will vary from case to case, and it is hard to set a fixed dead-line. In Norway's view, the DSU does not 
include such a fixed dead-line, however, this does not  mean that the original complainant can refuse 
to take action according to Article 21.5 within a reas onable time. Norway thus contends that in order 
to avoid such unreasonable delay, Article 21.5 allows  the original respondent to have recourse to a 
compliance panel.175  
5.106  Norway contends that the obligation to refer a "compliance dispute" to a panel according to 
Article 21.5 rests on both parties in the dispute.  According to Norway, Article 21.5 does not specify 
                                                      
170 Replies by Norway to questions from the Europ ean Communities, questions 3, 4 and 5, paras. 4 
and 5. 
171 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 6. 
172 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 7. 
173 Replies by Norway to Panel questions, question 5 para. 10. 
174 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 8. 
175 Replies by Norway to Panel questions, question 5, paras. 11 and 12.  WT/DS321/R 
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  that it must be the original complainant to refer the matter to a "compliance panel".  Norway submits 
that Article 21.5 is written in the passive form, conc entrating on the result, specifically to place this 
obligation on all parties to the original dispute.176 
5.107  Norway submits that the standard practice has b een that the original complainant refers the 
matter to the panel.  It argues th at the one exception so far has been  the referral to a compliance panel 
by the European Communities in EC – Bananas III (Article 21.5 – EC).177  According to Norway, the 
fact that the report remains unadopted and that the panel in that case refused to make any 
recommendations or rulings in the case, does not in itself prove that an original respondent may not 
invoke Article 21.5.178  Rather, the position of the Panel in that  case must be seen in the light of the 
fact that Ecuador also requested a separate compliance panel179, and that the United States had 
submitted a request for retaliation that led to arbitration.180  Norway submits that the panel in that 
particular case could thus justify not making any recommendations or rulings by pointing to these 
other proceedings.181 
5.108  In Norway's view, a panel launched by the respondent cannot just make a declaratory 
judgment based on the presentation of the original respondent, but must make an objective assessment 
of the matter before it.  The scope of the "terms  of reference" would be to examine whether the 
measures taken to comply imply that there is now compliance with the rulings and recommendations 
of the original panel, i.e. that the original violation has been rem oved.  Only the violations specifically 
addressed in the original report will be addressed by the compliance panel, not any other violations 
that the new measure may cause.182 
5.109  Norway argues that where the orig inal complainants refuse to par ticipate, then any claim that 
the new measure is inconsistent with other provis ions of the covered agreements will not be heard 
(will be outside of the "terms of the referen ce" for the compliance panel), and the original 
complainants risk a finding of co mpliance that does not take into acc ount all the arguments that they 
would otherwise have presented.  By not launchin g the Article 21.5 panel in a timely manner, the 
original complainants thus lose certain rights to pr esent new claims that they would have had, had 
they themselves launched the panel request first.  Such  claims will thus have to await another panel.  
As such, the incentive structure th at is created by allowing the original respondent to launch an 
Article 21.5 panel proceeding works to provide the original complainants w ith the incentive to go 
ahead themselves and launch the Article 21.5 panel first.183 
5.110  In case a compliance panel is requested by the orig inal respondent, the reference in Article 6.2 
to "provide a brief summary of the legal basis of the complaint sufficient to present the problem 
                                                      
176 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities, 
para. 13. 
177 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse 
to Article 21.5 by the European Communities , Report by the Panel (WT/DS27/RW/EEC), 12 April 1999 – 
report never adopted. 
178 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities, 
para. 14. 
179 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse 
to Article 21.5 by the Ecuador , Report by the Panel (WT/DS27/RW/ECU), 12 April 1999. 
180 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse 
to Arbitration by the European Communities under Article 22.6 of the DSU , (WT/DS27/ARB), Report of the 
arbitrators dated 9 April 1999. 
181 See paras. 4.15 and 4.16 of the Panel Report in WT/DS27/RW/EEC. 
182 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities, 
paras. 16 and 18. 
183 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities, 
para. 16. WT/DS321/R 
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  clearly" can be fulfilled by referring to the original pa nel report, together with the identification of the 
specific measure taken to comply and how it ensures compliance.184  Where the original respondent 
has to request an Article 21.5 panel because the origin al complainants refused to do so, the original 
respondent may be considered as "complainant" for the purpose of Article 6.1 and "applicant" for the 
purpose of Article 6.2.  The question who is "com plainant" and who is "respondent" does not matter 
for the rest of the proceedings.185 
H. SEPARATE CUSTOMS TERRITORY OF TAIWAN , PENGHU , KINMEN AND MATSU  
1. Introduction 
5.111  The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu (Chinese Taipei) 
submits that it presents its views in this dispute b ecause of the important systemic issues involved, in 
particular, the raised DSU provisions that are under negotiations in the Special Session of the Dispute Settlement Body.  In its view, the resolution of cer tain issues in this case could significantly impact 
these negotiations.
186 
2. Opening Panel meetings for observation by the public 
5.112  Chinese Taipei argues that in  accordance with the procedures and customary practices 
developed over more than half a century under GA TT, which are reflected in Articles 14.1, 18.2 and 
Appendix 3 of the DSU, panel proceedings are to be kept confidential.  It argues that only Members 
by consensus can change the rules of confidentiality.   According to Chinese Taipei, a panel, even with 
the consent of the parties does not have the legal authority to open the pro ceedings to the public.187 
5.113  Chinese Taipei refers to Article VII of the Ru les of Conduct which requires that each covered 
person shall at all times maintain the confidentia lity of the dispute settlement deliberations and 
proceedings.  According to it, the only exception to this confidentiality obliga tion is Article 18.2 of 
the DSU which states that nothing in the DSU sh all preclude a party to a dispute from disclosing 
statements of its own positions to the public.  Chin ese Taipei is therefore of the opinion that this 
exception does not extend to the possibility of allo wing parties to decide whether to open panel 
meetings to the public.188 
5.114  According to Chinese Taipei, "panel deliber ations" implies more than one form of 
deliberation, thus includes not only internal consid eration among panelists, but also the entire process 
of the panel's consideration of the dispute.189 
5.115  Chinese Taipei argues that the flexibility from Article 12.1 of the DSU to change Working 
Procedures in Appendix 3 cannot be extended to c over provisions in the Working Procedures that 
directly elaborate on the obligations of the DSU.   It further argues that if the drafters had 
contemplated that the confidentiality requirement can be changed, they would have said so, just like in 
Article 18.2 of the DSU.  In the absence of such  language, only an amendment to the DSU by the 
Members through negotiations can change the requirement of confidential deliberations.190 
                                                      
184 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities, 
para. 18. 
185 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities, 
paras. 17 and 19. 
186 Third party submission of Chinese Taipei, para. 1. 
187 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, paras. 1 and 2. 
188 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, paras. 4 and 5. 
189 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, para. 3. 
190 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, paras. 6 and 7.  WT/DS321/R 
 Page 97 
 
 
  5.116  Chinese Taipei is of the opinion that th e third party sessions be in closed session.191 
3. Whether the DSB authorization remains in effect 
5.117  Chinese Taipei contends that the new implementi ng measure is required to be confirmed by a 
multilateral determination that the measure is compli ant with the DSB's recommendations and rulings.  
According to it, a unilateral claim of compliance t ogether with the principle of good faith does not 
overturn the DSB authorization of suspension of co ncessions, and that suspension of concessions can 
continue until the conditions in Article 22.8 have been met.192 
5.118  According to Chinese Taipei, the suspension of concessions can only be lifted after a 
multilateral determination of compliance, which involves an examination of the implementing 
measure against the recommendations and rulings of th e DSB, or by mutual agreement of the parties. 
In its view, until then, the DSB authorization re mains valid and the suspension of concessions may 
continue.  Chinese Taipei further states that if none of the parties brings the implementing measure to 
the panel, whether through Article 21.5 or Article 22.8, the suspension of concessions may continue.  
It contends that without the initiation of a dispute that results in the examination of the implementing 
measure, the status quo  would be considered as maintaining the existing balance of rights and 
obligations among WTO Members.193  
5.119  Chinese Taipei does not consider that there is a need to justify the continuing suspension of 
concessions after the implementing Member's cl aim that it has complied with the DSB's 
recommendations and rulings.194  
5.120  Chinese Taipei rejects the view th at the lack of action for any period of time on the part of 
Canada constitutes an expression of Canada's determin ation.  According to it, the existence of the 
determination by Canada cannot depend on such an indeterminate criteria as the length of time it takes 
for Canada to take action under Artic le 21.5 of the DSU.  In its view, Article 22.8 of the DSU allows 
Canada to continue its suspension of concessions un til one of the three conditions therein have been 
met.195 
4. Article 21.5 of the DSU 
5.121  Chinese Taipei considers that one of the ways to  arrive at a multilateral determination in the 
current situation is through Article 21.5 of the DS U.  With respect to the European Communities' 
argument that in absence of the initiation by Ca nada of an Article 21.5 compliance panel, the 
European Communities' implementing measure must be presumed to be compliant with WTO rules196 
and the continuation of the suspension of concess ions by Canada would amount to a unilateral 
determination of a violation of WTO rules, it argues that Article 23.2(a) is valid only if two requirements are present in the text of Article 21. 5,namely, (a) a deadline by which a 21.5 panel must 
be initiated, and (b) an obligation only on the or iginal complaining party to initiate the proceeding.
197   
5.122  Chinese Taipei considers that neither one of th ese requirements currently exists in the text, 
nor is it reasonable to interpret their existence.  It submits that it is up to the Member involved to 
choose whether and when to initiate the Article 21. 5 proceeding.  It opines that while it recognizes 
that the party suffering the suspension of concessions h as an interest to lift such suspension as early as 
                                                      
191 Replies by Chinese Taipei to Panel questions concerning open hearings, question 2, para. 12. 
192 Replies by Chinese Taipei to questions from the European Communities, question 1. 
193 Replies by Chinese Taipei to questions from the European Communities, question 4. 
194 Replies by Chinese Taipei to questions from the European Communities, question 5. 
195 Replies by Chinese Taipei to Panel questions, question 1. 
196 EC's first written submission, para. 61. 
197 Oral statement of Chinese Taipei, para. 2. WT/DS321/R 
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  possible, that interest has to be balanced with the fact that the same party had originally been 
determined, through a lengthy WTO pr ocess, to be in violation of it s obligations, and had a chance to 
implement, but failed to do so, within a reasonable period of time.  Further, it argues that consistent 
with the text of Article 21.5, if the original r espondent considers the conditions for the suspension of 
concessions to be no longer valid, the respondent  may initiate the Article 21.5 proceeding at any 
time.198  
5.123  Chinese Taipei stresses that as the DSU currently stands, th ere is no deadline and no 
designated party to initiate the Ar ticle 21.5 proceeding.  Chinese Taip ei agrees with the United States 
that just because the United States has not initiated the Article 21.5 proceeding does not mean that the 
European Communities automatically enjoys the presu mption of compliance.  In its view, at this 
stage, only a multilateral procedure can reach that conclusion, and one of the ways the European 
Communities can obtain such a multilateral determina tion is through its initiation of an Article 21.5 
panel.   
5.124  Chinese Taipei wishes to remind the Panel that the procedural issues involved in this case are 
currently under discussion in the negotiations on the improvement and clarification of the DSU.  It 
argues that several competing proposals are on  the table, including one from the European 
Communities.  Chinese Taipei notes that it is a vi ew widely shared by Members that the DSU 
procedures in this so-called "post-retaliation stag e" are imperfect.  According to Chinese Taipei 
however, it is not the task of the Panel, or indeed any Member, through litigation, to make up for such 
imperfection.  Therefore, Chinese Taipei urges the Panel to avoid interpreting the current provisions 
in a way that would impose rules or requirements that are not written in the text.199 
5. The relationship between Article 22.8 and Article 23 of the DSU 
5.125  Chinese Taipei argues that Articles 23 and 22.8 apply to different situations and therefore 
should not be read together, as this would lead to a weakening of the WTO dispute settlement system.  
It contends that Article 22.8 differs from Article 23 in that it deals with the specific post-retaliation 
situation, outlining the conditi ons under which the suspension of the concessions pursuant to 
authorization from the DSB can be lifted.  Chinese Taip ei states that the general principle of resolving 
disputes under the multilateral system in Article 23 has been specifically modified by Article 22.8.  
Article 22.8 thus has its own independent set of requirements applicable specifically to the post-
retaliation situation, apart from th e general principles in Article 23.200 
5.126  Chinese Taipei opines that the basis upon which European Co mmunities builds its arguments 
for its interpretation of DSU Articles 23 and 22.8 is  the general principle of good faith under which 
States are normally considered to act in conformity with their obligations.201  Chinese Taipei agrees 
that Article 23.2(a) embodies that principle in  prohibiting Members from making any unilateral 
determination to the effect that a violation has occurred.202   
5.127  Chinese Taipei argues that by its title, Article 23 applies to the normal situations when the 
Member is responding to a perceive d violation, nullification, impairme nt, or impediment, to which the 
Member is seeking remedy.  It argues that this is  the normal situation under which most cases begin 
and are first brought to the attention of the Dispute Settlement Body.203 
                                                      
198 Oral statement of Chinese Taipei, para. 3. 
199 Oral statement of Chinese Taipei, para. 4. 
200 Third party submission of Chinese Taipei, paras. 2 and 7. 
201 EC's first written submission para. 87. 
202 Third party submission of Chinese Taipei, paras. 2-4. 
203 Third party submission of Chinese Taipei, para. 5.  WT/DS321/R 
 Page 99 
 
 
  5.128  According to Chinese Taipei, Article 23.2 prescr ibes the actions Members may take in the 
normal situation described in Article 23.1.  Accord ing to it, specifically, 23.2(a) prevents a Member 
from acting upon the unilateral perception of viol ation until it is validat ed under multilateral 
procedures. Chinese Taipei considers that this amount s to the presumption that a Member is normally 
considered to be acting in conformity with its obligations until a multilateral determination under the 
WTO says otherwise.204 
5.129  Chinese Taipei posits that Article 22.8 on the ot her hand describes situations that depart from 
the norm.  It submits that the general principle in Article 23 relating to normal situations therefore has 
limited application and must be modified by the speci fic requirements spelt out in Article 22.8.  In its 
view, the situation at hand is one where the redress of violation has already been determined at least 
once through multilateral procedures and where susp ension of concessions has been authorized.  
Chinese Taipei argues that the requirement is not that  the suspension of concessions must be lifted in 
the absence of an adverse finding, but rather that the suspension shall be applied until the violation 
has been removed or any of the other two conditions in the provision have been met.205 
5.130  According to Chinese Taipei, it therefore follo ws from this difference in situation and 
requirement that the normal presumption that a Member  is considered to be in conformity with its 
obligations until proven otherwise in a multilateral de termination does not apply.  It contends that 
since Article 22.8 provides that the suspension of concessions can continue until the removal of the 
violation, the presumption here is that there is  no removal of the violation until a multilateral 
determination says otherwise.206 
5.131  Chinese Taipei contends that if the normal presu mption were to apply to Article 22.8, despite 
the existence of a multilateral determination and au thorization for retaliation, any offending Member 
can simply declare itself to have removed the violatio n.  It submits that this would create the incentive 
for Members to implement partially or not at all, and drag the Member suspending concessions into an 
endless loop of Article 21.5 litigations.207 
5.132  Chinese Taipei is of the view that under both normal and Article 22.8 s ituations, a multilateral 
determination is the prerequisite  to any action that changes the existing balance of rights and 
obligations.  It further notes that normally, a Me mber cannot seek redress of violation without a 
multilateral determination because a balance is presume d to exist.  Similarly, Chinese Taipei argues 
that under the Article 22.8 situation where suspension of concessions is in place, that situation is the 
presumed balance, and that existing balance cannot be changed without another multilateral 
determination.208 
5.133  Chinese Taipei thus argues that the suspension of  concessions by Canada does not fall into the 
normal situation described in Article 23 and un til a multilateral determination deems the European 
Communities' implementing measure to have rem oved the previously multilaterally determined 
inconsistency, the continuation of suspension of concessions by Canada does not violate the existing 
provisions of the DSU.209 
                                                      
204 Third party submission of Chinese Taipei, para. 6. 
205 Third party submission of Chinese Taipei, para. 7. 
206 Third party submission of Chinese Taipei, para. 8. 
207 Third party submission of Chinese Taipei, para. 9. 
208 Third party submission of Chinese Taipei, para. 10. 
209 Third party submission of Chinese Taipei, para. 11. WT/DS321/R 
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  I. UNITED STATES  
1. Introduction 
5.134  The United States submits that for all of the reas ons set out in the arguments presented by the 
United States in United States – Continued Suspension of Ob ligations in the EC – Hormones Dispute 
(WT/DS320)210 the United States concurs that Canada's continued suspension of concessions to the 
European Communities is consistent with th e obligations of Canada under the DSU and 
GATT 1994.211  
2. Opening Panel meetings for observation by the public 
5.135  A summary of the arguments of the United States on the opening of panel meetings for 
observation by the public is set out in Section IV.B.2 of the Panel's Report in United States – 
Continued Suspension of Obligations in the EC – Hormones Dispute  (WT/DS320).   
VI. INTERIM REVIEW 
A. INTRODUCTION  
6.1 Pursuant to Article 15.3 of the DSU, the findi ngs of the final panel report shall include a 
discussion of the arguments made by the parties at th e interim review stage.  This section of the Panel 
report provides such a discussion.  As is clear from Article 15.3, this Section is part of the Panel's 
findings. 
6.2 The European Communities and Canada separatel y requested an interim review by the Panel 
of certain aspects of the interim repor t issued to the Parties on 31 July 2007.212  The European 
Communities stated that it stood ready to attend an in terim review hearing to discuss the issues raised 
in its letter, "should the Panel consider it useful".  The Panel notes that it is not for it to decide 
whether holding an interim review hearing would be useful.  Article 15.2 of the DSU provides that it 
is "[a]t the request of a party [that] the panel sha ll hold a further meeting with the parties on the issues 
identified in the written comments."  The Panel does not understand the EC statement above as a 
request by the European Communities for the Panel to  hold an additional meeting with the parties.  
Furthermore, the Panel notes that Canada did not requ est such a meeting.  As a result, the Panel did 
not hold an interim review meeting. 
6.3 In accordance with the Panel working procedures and timetable, the parties had, and used, the 
opportunity to submit further written comments on each other's requests for review of specific aspects 
of the interim report.213  These comments are discussed, where relevant, together with the request to 
which they relate.  
6.4 The Panel issued its final report to the parties on a confidential basis on 21 December 2007. 
6.5 The Panel has structured its treatment of the Parties' requests below in the following manner: 
(a) first, it addresses a comment made in rela tion to the descriptive part of the report 
(Section IV) that the Panel could not address at an earlier stage of the proceedings; 
                                                      
210 WT/DS320/6. 
211 Letter of 19 August 2005 to the Panel explaining the US third party submission. 
212 Letters of the parties dated 28 September 2007. 
213 Letters of the parties dated 19 October 2007.  WT/DS321/R 
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  (b) second, it discusses the comments of the parti es relating to the findings of the Panel 
and, more particularly: 
(i) the aspects of the report regarding procedural issues (Section VII.A); 
(ii) the comments of the parties regarding the Panels findings of violation of 
Article 23.2(a) read together with Articles 21.5 and 23.1 of the DSU (Section VII.B); and 
(iii) the comments of the parties regarding the compliance of the EC ban on meat 
and meat products treated with the six hormones at issue for growth promotion purposes with the SPS Agreement  in relation to the Panel's 
findings on the EC claims on Article 23.1, read together with Articles 22.8 and 3.7 of the DSU (Section VII.C). 
6.6 In addition, minor editing changes were made, wh ich the Panel did not deem necessary to list 
in this section. 
B. P
ARTIES ' COMMENTS ON THE DESCRIPTIVE PART  
6.7 The Panel considered and incorporated in its revised descriptive part the majority of the 
parties' comments.  In one instance, however, the Panel rejected the modifications requested by the 
European Communities and deems it appropriate to provide its reasons in this section. 
6.8 This instance relates to the EC request that th e Panel incorporate in the descriptive part the 
parties' arguments on logistical issues relating to the opening to public observation of the Panel's 
substantive meetings with the parties and with the experts. 
6.9 In its comments on paragraph 4.2 and following of the descriptive part of this report, the 
European Communities notes that, while the parties'  answers of 20 June 2005 to a number of 
questions of the Panel have been reported in full, ther e is no reference to the parties' replies of 7 July 
2005 to the additional questions of the Panel.  Th is, in the opinion of the European Communities, 
raises a question of the completeness of the record of the parties' arguments.  Inserting the replies of 
the parties of 7 July 2005 is also important according to the European  Communities since the 
comments of the third parties on logistical matters ha ve been reported in the descriptive part.  Thus, 
the European Communities requests the Panel to re flect the parties' responses to these additional 
questions in its report.  
6.10 The Panel notes that the parties' replies of  7 July 2005 essentially addressed technical 
questions of a logistical nature.  The Panel did no t deem it necessary to insert in its report any account 
of the logistical aspects of the opening of the hear ings to public observation.  The Panel notes in this 
respect that it did not include in the descriptive pa rt of the report extracts from the replies of the 
parties of 20 June 2005 that related to logistical i ssues. Given that, among the third parties, only India 
and Mexico mentioned, in a general manner, the logi stical implications of opening hearings to public 
observation, the discussion on logistical issues essenti ally took place between the parties themselves, 
or between the parties and the Secretariat.  The Pane l did not address the details of the logistical issues 
in its decision on opening meetings for public observati on.  This matter is, in the opinion of the Panel, 
purely administrative. It is neither procedurally nor factually relevant for the resolution of the dispute 
before us. The Panel is mindful that such an account might be useful from a practical point of view for 
future panels. However, it considers that the techni cal solutions found in this case may not necessarily 
be extended to other panel procedures,  if only because the parties' expect ations and constraints, e.g. in WT/DS321/R 
Page 102 
 
 
  terms of confidentiality, may be different in future cases.214  Whereas the Panel provided a detailed 
account of the legal issues related to the opening of the Panel's heari ngs for public observation, for the 
reasons mentioned above, it decided not to follo w the suggestion of the European Communities. 
6.11 The Panel nonetheless wishes to confirm that the technical options available were extensively 
discussed with the parties and that the solution finally selected, i.e. the broadcast of the hearings into a 
separate room through closed-circuit television, was adopted in accordance with the positions 
expressed by the parties. 
C. PARTIES ' COMMENTS REGARDING THE FINDINGS OF THE PANEL  
1. Preliminary remarks 
6.12 As a preliminary remark, the Panel notes that  the European Communities mentions in the 
introduction to its written request for the Panel to re view precise aspects of the interim report that it: 
"[W]ill try to provide some examples  of the numerous and serious errors in the 
reasoning of the Panel on the scientific issues underpinning this dispute.  However, it 
is not possible in the time available to provide a detailed and complete list of all 
omissions and errors of the two interim reports  as it would in reality require re-
writing substantial parts of the Panel's repor t in order to rectify its analysis and 
reasoning...  Therefore, the European Comm unities reserves the right to make all its 
comments at the appeal stage , if the Panel's findings on the issue were to be 
maintained."215 (emphasis added) 
6.13 This statement suggests that the European Communities did not identify all the precise 
aspects of the interim report with which it disag rees due to lack of time and because this would 
require rewriting substantial parts of the Panel report.  It would, however, be able to make all its 
comments at the appeal stage.  The Panel wishes first to make it clear that parties were free to request 
an extension if they needed more time to revi ew the interim report and identify precise aspects that 
should be addressed by the Panel.  The Panel notes in this respect that it is at the request of the 
European Communities that parties were granted several additional weeks to review the interim 
report.  The Panel also notes that the European Co mmunities gave as a justification for its request the 
expected length and complexity of the report.  The Panel therefore regrets that the European 
Communities is now alleging lack of time as a justification for providing only "some examples" of errors in the reasoning of the Panel on the scientific issues underpinning this dispute. 
6.14 In contrast, the European Communities mentions that it may make "all its comments" at the 
appeal stage.  The Panel is surprised by the appa rent choice of the European Communities to "make 
all its comments" before the Appellate Body rather than before the Panel, at the procedural stage 
expressly designed for the purpose of considering any and all comments on the interim report.  This is 
because the decision of the European  Communities to provide only "som e examples" of errors of the 
Panel suggests that it has already decided to app eal the Panel report unless the Panel makes changes 
which the European Communities will not specify.  It  is also not clear whether the "examples" given 
by the European Communities exhaust all its factua l comments or whether it intends to make further 
                                                     
 
214 In the present dispute, after comparing different alternatives, the Secretariat was able to arrange 
open hearings through closed-circuit broadcast from one room to another utilizing the existing facilities of the 
Secretariat.  The cost of  open hearings was covered by the regular budget under the Secretariat arrangement.  
There may be different cost implications for future disputes in different circumstances but that consideration would fall outside the remit of this Panel. 
215 EC's written request of 28 September 2007, para. 5.  WT/DS321/R 
 Page 103 
 
 
  comments on factual issues before the Appellate Body .  Having regard to Article 17.6 of the DSU, we 
consider this to be equivalent to deprivi ng the interim review stage of its purpose.  
6.15 The Panel therefore regrets that the European Communities did not request an extension so as 
to ensure that all the comments it deemed necessar y on precise aspects of the interim report be made 
at the procedural stage of the dispute settleme nt process intended for that very purpose. 
6.16 The Panel also notes that some of the EC comments are general statements on whole sections 
of the report, not a written request for the Panel to review precise aspects  of the interim report.  We 
recall that the panel in Australia – Salmon216 stated as follows: 
"According to Canada, it is not open to the Panel to consider anything other than 
comments dealing with 'precise aspects' of th e interim report.  We agree with Canada 
and have therefore only reviewed our interi m report in light of the comments made by 
the parties which relate to 'precise aspects' of the interim report." 
6.17 We agree with the reasoning of the above-menti oned panel and therefore consider that the 
general comments by the European Communities did not  require a specific reply from the Panel.  We 
limited our replies to the portions of the report on which specific comments, in the form of precise 
requests for reconsideration of specific paragraphs, had been made by the European Communities. We 
addressed the EC general comments as part of our review of specific paragraphs. 
2. Parties' requests for review related to aspects of the report on procedural issues 
(a) Comments by the European Communities 
6.18 The European Communities considers the Panel' s reference to Article 17.10 of the DSU in 
paragraph 7.48 of the interim report is unnecessar y and potentially detrimental as implicitly 
suggesting that the Appellate Body could be legall y barred by Article 17.10 of the DSU from opening 
its own hearings to public observation.  The Eu ropean Communities requests that we remove that 
paragraph from our findings.  We note that a si milar request was made by Canada.  Since this 
reference was only an additional argument, we accepted the parties' requests and removed our 
discussion of the term "proceedings" in Article 17.10 of the DSU. 
6.19 The European Communities considers that  the description of IARC contained in 
paragraph 7.76  footnote  370 is incomplete.  It refers to Dr. Cogliano's statement in Annex G, 
paragraph 541.  In paragraph 541, Dr. Cogliano essentially say s that IARC monographs simply 
indicate which substances are carcinogenic or are probably not carcinogenic to humans.  Monographs 
identify occurrence (i.e. exposure to a chemical through some particular pathway), but not the specific 
level of exposure for a particular population. Dr. Cogliano also says in paragraph 541 that different 
decision-making authorities will decide whethe r the evidence contained in IARC monographs 
sufficiently supports an SPS decision or whether they  need to conduct further analysis. Thus it seems 
that IARC monographs provide information and serve in risk assessment.  This said, the text in the 
footnote is a verbatim quote from the IARC website, d escribing what IARC does.  Thus the Panel did 
not deem it necessary to augment the footnote.   
6.20 The European Communities argues that the second sentence of paragraph 7.83  does not 
reflect reality, since the European Communities di d not agree with the final decision on Working 
Procedures for Consultation with Scientific and/or T echnical Experts adopted by the Panel.  The Panel 
notes that, in a letter of 3 November 2005, the Eu ropean Communities commented on the draft expert 
working procedures.  One of the comments was that  the experts should act as a single expert review 
                                                      
216 Panel Report on Australia – Salmon , para. 7.3. WT/DS321/R 
Page 104 
 
 
  group in order to provide a consistent advice on the issues concerned.  The European Communities 
also suggested that the experts should be independent from the industry or regulatory bodies which 
had a vested interest in the issue on which they would be consulted.  The Panel rejected the EC 
request that experts should act as a single review  group in its letter sent to the parties on 
25 November 2005, together with its finalized Wo rking Procedures for Consultation with Scientific 
and/or Technical Experts.  We therefore modified paragraph 7.83 to reflect the absence of full 
agreement of the European Communities on the Pa nel's Working Procedures for Consultation with 
Scientific and/or Technical Experts. 
6.21 The European Communities further requests us to redraft the fourth sentence of 
paragraph 7.83 to reflect better its concerns that tw o of the experts selected by the Panel participated 
in the preparation and drafting of the JECFA risk assessment of the hormonal substances at issue in this case, with which the EC risk assessment disagrees.  The Panel sees no problem in clarifying the 
nature of the work of these two experts with JECFA  It remains however puzzled by the EC 
suggestions that a scientist who worked with JECF A could be deemed to be biased in assessing the 
scientific evidence on which EC Directive 2003/ 74/EC relies and could be assumed to defend 
JECFA's work.  First, scientists would readily admit that science is constantly evolving and the fact 
that new studies are peer revi ewed is evidence that assessing new ideas and findings is part of 
scientific work. Assuming that scientists may lack  objectivity because they participated in the 
preparation and drafting of JECFA's risk assessments on the hormones at issue would call into question the whole principle of peer review.  The Panel also agrees with Canada in its comments on 
comments of 19 October 2007 that JECFA is the body that provides the independent scientific advice on which the work of Codex is based and Codex is expressly recognized by the SPS Agreement  as 
having responsibilities for the establishment of  "international standards, guidelines and 
recommendations".  The Panel also recalls the role  given to international standards, guidelines and 
recommendations by Article 3.1 and 3.2 of the SPS Agreement . It is therefore consistent with this role 
for the Panel to rely on experts who contributed in the preparation and drafting of JECFA's risk 
assessments of the substances at issue.  
6.22 The Panel does not agree either with the EC ar guments according to which the two experts at 
issue should not be described as "internationall y recognized specialists".  The Panel notes the 
arguments of Canada in this regard in its comment s of 19 October 2007.  The Panel recalls that these 
two experts have been selected by the FAO and W HO as part of the JECFA selection process.  The 
selection procedure has been described in JECFA' s reply to question 14 of the Panel to JECFA.
217  
The Panel fails to understand why the JECFA selec tion would not be evidence of the international 
reputation of the scientists at issue.218  The EC concerns about JECFA's work and the selection of 
experts to participate in that work are in c ontradiction with the role attributed by the SPS Agreement  
to Codex and to international standards, guidelin es and recommendations.  The Panel was fully aware 
of the area of expertise of the two scientists at issue,  and believed that they would be more at liberty to 
comment on the content of JECFA's work than official s of the JECFA Secretariat.  It also specified 
the reasons why those experts were selected in spite  of their not having carried out experiments with 
the substances at issue and does not  see any need for further substantial elaboration.  The Panel has 
nevertheless made some clarifications, in r esponse to the EC request, to paragraph 7.83. 
6.23 The European Communities requests that we modi fy the first sentence of paragraph 7.85 to 
better reflect the content of its letter of 28 March 20 06.  We consider that the letter largely reiterated 
points which the Panel already addresses in paragraph 7.83, i.e. the involvement of experts in the 
preparation and drafting of JECFA's risk assessments and their alleged lack of scientific expertise.  
Besides this, the EC letter of 28 March deals exclusiv ely with conflict of interest, which is the subject 
                                                      
217 Annex E-2, pp. 115-116. 
218 See also Dr. Boobis, Annex G, para. 511; Dr. Tritscher, Annex G, para. 515; Dr. Wennberg, 
Annex G, para. 517.  WT/DS321/R 
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  addressed by the Panel in paragraph 7.85.  While th e Panel has modified the paragraph to reflect the 
fact that the EC letter addressed other issues alre ady discussed in this report, it did not deem it 
necessary to modify the rest of the paragraph, excep t to clarify the elements on the basis of which the 
Panel considered that the experts concerned shoul d be deemed to be the best among the very few 
individuals available. 
6.24 Having reviewed the EC comments on pa ragraph 7.87 of the interim report , the Panel agrees 
that this paragraph did not directly relate to the i ssue of the alleged conflict of interest of two of the 
experts consulted by the Panel and has deleted it.   
6.25 The European Communities argues that th e statements in paragraph 7.115 and  footnote  388 
are not accurate as some of the subsequent evidence  did expand and confirm the scientific basis of 
Directive 2003/74/EC.  The European Communities refers to the replies of Dr. Guttenplan and 
Dr. Sippell.  In paragraph 7.115  and footnote  388, the Panel states that nothing new was submitted 
after the adoption of Directive 2003/74/EC that differed in any fundamental way  from previous 
evidence. This is not contradicted by the EC  comment that subsequent evidence expanded and 
confirmed the scientific basis of its Directive, incl uding the EC reply to question 5 of the Panel after 
the second substantive meeting.219  The statements of Dr. Guttenplan  referred to by the European 
Communities220 do not support the EC argument.  Dr. Sippell mentions in paragraph 611 of Annex G 
that he changed his opinion on exposure to e xogenous oestrogens and precocious puberty because the 
acceptance of the significance of th e ultrasensitive assays within paediatric endocrinology increased 
tremendously after he publ ished his review article in 1999.  Ho wever, the ultrasensitive assays he is 
referring to were not carried out or published after the adoption of Directive 2003/74/EC.  In his 
written replies221, where he discusses the ultrasensitive a ssay techniques, Dr. Sippell refers to Klein et 
al (1994)  and Larmore et al (2002)  and other studies dated 1999 or 2001.  As a result, in the opinion 
of the Panel, the statement of Dr. Sippell cited by the European Communities is not about evidence 
that became available after the adoption of the Di rective. Consequently the Panel did not modify 
paragraph 7.115 and footnote 388. 
6.26 The European Communities also argues with resp ect to paragraph 7.116 that it had reserved 
its right to submit the finally published version of the study contained in Exhibit EC-107.  According 
to the European Communities, this study was submitt ed in time and should have been accepted.  The 
Panel notes that, when it submitted Exhibit EC-107 on 21 December 2005, the European 
Communities specified that it "reserve[d] its right to s ubmit further evidence, if and to the extent this 
appears necessary for the purpose of commenting on any further submissions by the other parties as 
well as on replies of the panel's experts".  The Pane l does not read this reservation as reserving the EC 
right to submit the finally published version of th e study.  Moreover, the Panel recalls that the 
European Communities stated that it left it to the discretion of the Panel whether to forward the 
published version to the experts.222 The Panel considers that it suffici ently explained in its report the 
reasons why the published version of this study had not  been sent to the experts.  In particular, it 
considered that submitting a modified study to e xperts at a relatively late stage of the expert 
consultation proceedings c ould generate confusion. 
6.27 The European Communities also considers with respect to paragraph 7.124 that the Panel 
should accept that the European Communities submit the comments it wished to make in relation to 
some factual errors made by the United States223 in its replies to the Panel questions posed after the 
                                                      
219 Annex C, pp. 5-7. 
220 Annex G, paras. 709 and 713. 
221 Annex D, para. 319. 
222 See EC's letter to the Panel of 29 May 2006. 
223 Since the original request of the European Co mmunities related to alleged factual errors in 
comments from the United States and Canada, and since the European Communities requests that we review WT/DS321/R 
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  second substantive meeting.  The Panel considers th at its decision was clear.   If inaccuracies resulting 
from US factual arguments had been reflected in the interim report, the European Communities could 
have identified them in its comments or in its co mments on comments.  There does not seem to be any 
need for the Panel to reverse its decision of 20 November 2006. 
6.28 The European Communities al so alleges, with resp ect to paragraph 7.126 et seq.,  that one 
paragraph was added to the transcript of the experts'  hearing annexed to this report compared with the 
version sent to the parties in January 2007.  Ther e are, indeed, more paragraph numbers. However, 
there is no additional text in Annex G as compared to  the version sent to the parties in January 2007.  
In fact, the difference results from a correction to the paragraph numbers of the transcript.  In the 
version sent to the parties for comments, there was a paragraph between paragr aphs 29 and 30 that did 
not have a number.  This paragraph became the new paragraph 30 in the final version of the transcript, 
and as a consequence, all the other paragraph number s shifted by one.  On the same subject, two more 
changes were made in paragraph numbers:  paragraph 827 of the draf t transcript was divided into two 
paragraphs, following a comment by the United States224, and became paragraphs 828 and 829 in the 
final version of the transcript.  Finally, another paragraph lacked a number,  between paragraphs 926 
and 927.  This paragraph corres ponded to a short statement by Dr. Boisseau clarifying that he had 
asked a question to Dr. Boobis, not to the Eur opean Communities.  This  unnumbered paragraph 
became paragraph 929.  In conclusion, three add itional paragraph numbers we re added in the final 
version of the transcript compared to the draft ve rsion sent for comments to the parties.  The draft 
version had 1069 numbered para graphs; the final version h as 1072 numbered paragraphs. 
6.29 The European Communities also  seems to request, with respect to paragraph 7.135 , that the 
Panel specify the nature of the "editorial adjustme nts" made in the transcript. The Panel deems it 
appropriate to recall that the tapes of the meeting of  the Panel with the experts were given to a typist 
who transcribed them. Two types of editorial adjust ments were made to the transcript.  First, the 
Secretariat proofread the transcript, identifying any words or passages the typist had misunderstood 
and checking these passages against th e tapes.  The type of errors identified were limited to 
confusions regarding technical terms (e.g. "N-point" instead of "endpoint"; "safe defactual" instead of 
"safety factor"225 or "defactual threshold" instead of "de facto threshold"226).  Other corrections 
involved minimal adjustments to sentences, for ex ample to remove repeated words and occasionally 
adding punctuation marks.  Once these corrections we re made, the transcript was sent to the experts 
and subsequently to the parties in order to give each  speaker the chance to verify that his or her own 
interventions had been accurately reflected.  The expe rts' comments consisted of  further corrections of 
technical words which had been improperly transcribed, or corrections of word order or colloquial expressions to make the transcript more legible.  This is the reason why the Panel considered that 
these corrections did not go beyond "minimal editorial adjustments". 
(b) Comments by Canada 
6.30 With respect to the discussion of the procedural question of the opening of the Panel meetings 
with parties and experts for public observation, Cana da requests that we remove our discussion of the 
term "proceedings" as it appears in Article 17.10 of the DSU.  We note that the same request was 
made by the European Communiti es.  Since this reference was only an additional argument, we 
accepted the parties' requests and removed our discu ssion of the term "proceedings" in Article 17.10 
of the DSU.  
                                                                                                                                                                    
 
paragraph 7.124 of this report, the Panel deemed it appr opriate to discuss this issue in this interim review 
section. 
224 See US's letter dated 14 February 2007. 
225 Annex G, para. 422. 
226 Annex G, para. 707.  WT/DS321/R 
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  6.31 Canada also requests that we modify paragraph  7.138.  We see no reason not to adjust the 
description of the measure since it is actually the absence of recourse to the DSU by Canada which 
seems to be at the origin of the EC complaint.  However, under the circumstances, we also deem it 
necessary to specify that the issue stems from the fact that Canada maintained the measure after the 
notification of Directive 2003/74/EC to the DSB and,  accordingly, we have modified paragraphs 2.7 
and 7.138.  
6.32 Canada contests the conclusi on of the Panel in paragraphs  7.149  and 7.151 that the European 
Communities narrowed the terms of reference of the Pa nel through the approach it followed in its first 
written submission.  For Canada, the EC approach is  a "choice of legal strategy" which is not binding 
on the Panel.  The European Communities cannot cons train the terms of reference of the Panel by 
adopting a specific approach to its claims in its first written submission. 
6.33 The Panel agrees that it is well established that  a complainant cannot change the terms of 
reference of a panel in its first submission or s ubsequently. As stated by the Appellate Body in EC – 
Bananas III :  
"If a claim  is not specified in the request for the establishment of a panel, then a 
faulty request cannot be subsequently 'cur ed'  by a complaining party's argumentation 
in its first written submission to the panel or in any other submission or statement 
made later in the panel proceeding."227 
6.34 However, the Panel does not believe that this is  the issue in the pre sent case.  The European 
Communities did not try to cure a faulty request. It ma de its claims more specific.  As the Panel itself 
noted228, there could be several ways to find a violation of Article 23 of the DSU. The European 
Communities has clarified how it considered that this  violation should be approached by the Panel.  
As stated by the Panel on EC – Tube or Pipe Fittings229: 
"In our view, it is in the nature of the Pane l process that the claims made by a party 
may be progressively clarified and re fined throughout the proceedings."  
6.35 The Panel also quotes the Appellate Body in US – Carbon Steel .230 It seems to be accepted 
that complainants can clarify their claims througho ut the proceedings.  In this instance however, it 
appears that Canada is concerned by the conclusion of the Panel that it is bound  by these clarifications 
or that they are part of the Panel's terms of reference. 
6.36 Panels are free to address claims in the order that they deem appropriate.231  However, if a 
party specifies in its first written submission that a claim is raised in the alternative, can a panel 
disregard this clarification?  To a lesser extent, can a panel disregard the fact that the complainant 
addressed the violation of a given pr ovision in a particular way? Regarding the first question, it seems 
that panels should be bound by a claim made "i n the alternative", as acknowledged by the Appellate 
Body.232  Regarding the second question, the reply mi ght be less clear and depend on the type of 
"clarification" made by the complainant.  In the present case, the EC clarification had serious consequences on how the Panel could address the cl aims listed in the terms of reference.  The 
European Communities did not claim a violation of Artic le 23 in general, but a violation of Article 23 
as a consequence of a breach of Article 22.8 of th e DSU.  The Panel also notes the arguments of the 
                                                     
 
227 Appellate Body Report on EC – Bananas III , paras. 141-143; Appellate Body Report on US – Lead 
and Bismuth II , paras. 72 and 73. 
228 See para.7.159. 
229 Panel Report on EC – Tubes and Pipes Fittings , para. 7.10. 
230 See para. 7.148. 
231 Appellate Body Report on Canada – Wheat Exports and Grain Imports , para. 126. 
232 See, e.g., Appellate Body Report on EC –  Selected Customs Matters , para. 308. WT/DS321/R 
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  European Communities in its comments of 19 October 2007.  The Panel recalls, in particular, that the 
rights of the respondent or its ability to defend itself were in no way affected by the "narrowing" of its 
claims by the European Communities.  The Panel remains of the view that it is bound by the EC 
approach to its claims and, accordingl y, has not modified paragraph 7.149  or paragraph  7.151.  
3. Comments of the parties regarding the Panel's  findings of violation of Article 23.2(a) 
read together with Articles 21.5 and 23.1 of the DSU and on the EC claims on 
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU 
(a) Comments by the European Communities 
6.37 The European Communities disagrees with th e interpretation the Panel makes, in 
paragraph 7.153, as well as in paragraph  7.288 , of the EC claims as set out in its first written 
submission.  The European Communities insists in its comments that "it did not argue [in its main 
claims] that there was a violation of Article 22.8 itself,  but rather one of Article 23.1".  In other words, 
the European Communities see ms to suggest that the Panel should not have addressed  the conformity 
of Canada's measure under Article 22.8 of the DSU – even though this Article was listed in the EC 
request for establishment of a panel – but only unde r Article 23.1.  Yet, the European Communities 
alleges a violation of Article 22.8 in various parts of its first submission and subsequently.233 
6.38 In the opinion of the Panel, the use of the term "in conjunction with" or "read together with" 
is not indicative that the European Communities only claims a violation of Article 23.  In 
Section III.E.3 of its first written submission, th e European Communities alleges a violation of 
Article 3.7 even though in its conclusions it states  that the United States' and Canada's unilateral 
conduct "violates Article 23.1 of the DSU read in c onjunction with Article 22.8 and 3.7 of the DSU".  
One cannot conclude either that the European Communities draws a conclusion of violation of 
Article 22.8 from the violation of Article 23.1 since its allegation of violati on of Article 23.1 stems 
from the obligation to withdraw the measure if th e violation has been removed. Rather, one must 
conclude the opposite, i.e. that the European Communities draws a conclusion of violation of 
Article 23.1 from a violation of Article 22.8.  Fo r those reasons, the Panel does not agree with the 
argument made by the European Co mmunities at the interim review stage that it never made a claim 
of violation of Article 22.8 of the DSU, and that its  claims related only to vi olations of Article 23. 
6.39 The European Communities also contests the qua lifications made by the Panel of its second 
series of main claims (i.e. its claims of viola tion of Article 23.1 of the DSU in conjunction with 
Article 22.8 and Article 3.7 of the DSU) as cl aims "premised on compliance by the European 
Communities with the DSB recommendations and rulings in the EC – Hormones  case" in 
paragraph 7.163.  The Panel notes that it has clea rly explained in paragraphs 7.293-7.294 why it 
believes that this claim was premised on complianc e with the DSB recommendations and rulings in 
the EC – Hormones  case. 
                                                      
233 See, for instance: 
– EC's first written submission, para. 71: "Under Ar ticle 23.1 of the DSU, Canada is obliged to 
have recourse to, and abide by, the rules and procedures of this Understanding.  This encompasses, inter alia , Articles 22.8 and 3.7 of the DSU"; 
– EC's first written submission, Section III.E.2, title: "The obligation not to apply suspension of 
concessions or other obligations under Article 22.8 of the DSU"; 
– EC's first written submission, Section III:E.3, title:  "Canada's violation of Article 23.1 and 
Article 22.8 of the DSU necessary entails a violation of Article 3.7"; 
– EC's first written submission, para. 123: "For these reasons, Canada, by violating Articles 
23.1, 22.8 of the DSU, also acted co ntrary to Article 3.7 of the DSU"; 
– EC's oral statement at first meeting, pa ra. 56: a "systemic claim under Article 22.8, in 
conjunction with Article 23.1 "; 
– EC's second written submission, para. 174.  WT/DS321/R 
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  6.40 Consequently, and having regard  to Canada's comments of 19 October 2007, the Panel will 
not delete the section of its report considering the allegedly non-existent EC claim under Article 22.8 
of the DSU. 
6.41 The Panel, however, deems it appropriate to  clarify paragraph 7.163, and to make a 
modification with respect to paragraph 7.357 in orde r to make clear that it is not reviewing the EC 
claim of violation of Article 22.8 in isolation. 
6.42 The European Communities also argues that, even though the obligation of the respondent 
clearly emerges from the Panel's reasoning, the Pane l should clarify its recommendations.  This could 
be done either by removing from the findings any consideration of the second series of main EC 
claims (i.e. its claim of violation of Article 23.1 of the DSU in conjunction with Articles 22.8 and 3.7 
of the DSU) or, if necessary, through suggesti ons under Article 19.1 of the DSU, or through 
clarifications in the Panel's reasoning.  A somewhat similar request for clarification has been made by 
the respondent in its request for review of precise aspects of the interim report. However, the 
European Communities suggests that the Panel should cl arify that Canada must remove its suspension 
of concessions, whereas Canada requests that we cl arify that our findings under Article 23.1 and 
23.2(a) have been rendered moot by the current  proceedings and the Panel's findings regarding 
Canada's compliance with Article 22.8 of the DSU. 
6.43 The Panel is mindful of its duty to assist the DSB in making recommendations or rulings 
aimed at achieving a satisfactory settlement of the ma tter.  The Panel notes that the parties have both 
requested that the Panel make suggestions or conclu ding remarks aimed at clarifying what is expected 
from Canada. The Panel notes, however, that thei r proposed suggestions or concluding remarks are 
divergent.  The Panel wishes to recall its conclusion in paragraph 7.244.  Th is conclusion is based on 
the terms of Article 23.1 and 23.2(a).  Those provisi ons require that recourse should be had to "the 
rules and procedures of the [DSU]" (Article 23.1) or, in the case of Article 23.2(a), that recourse be 
had to "dispute settlement in accordance with the rules and procedures of this Understanding".  
Moreover, for reasons explained in this report, the Panel does not believe that recourse by the 
European Communities to dispute settlement exem pts the respondent from its obligations under 
Article 23.1 and 23.2(a) of the DSU.  The Pa nel has clarified this point in paragraph  8.3. 
(b) Comments by Canada 
6.44 The Panel accepted Canada's sugges tion regarding paragraph 7.225. 
6.45 Canada requests that we clarify our statement in the first sentence of paragraph  7.292 by 
confirming that the present proceedings and the Panel' s findings in respect of Article 22.8 of the DSU, 
while technically not findings under Article 21.5 of the DSU, involve the same legal questions and 
legal conclusions as a compliance panel under Artic le 21.5 of the DSU.  While recognizing that, 
indeed, its review of a breach of Article 22.8 by  Canada involved in this case assessments resembling 
those that could have been performed by an Article  21.5 panel called upon to review the compatibility 
of Directive 2003/74/EC, the Panel notes a fundamental difference.  The matter before it is not the 
conformity of Directive 2003/74/EC, but the confor mity of the continued suspension of concessions 
or other obligations by Canada vis-à-vis  the European Communities.  The fact that the European 
Communities may have the possibility in practice to  achieve, by initiating a panel procedure like the 
present one, a result similar to that which coul d be achieved by Canada having recourse to 
Article 21.5 does not exempt Canada from its obliga tion under Article 23 to have recourse to dispute 
settlement.  Moreover, there is no telling which claims  would be brought by Canada if it had recourse WT/DS321/R 
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  to Article 21.5 of the DSU.  We also note the EC comments of 19 October 2007.234  As a result, the 
Panel does not deem it necessary to modify paragraph 7.292. 
6.46 Canada requests that the Panel modify paragraph  7.358  so as to state that reviewing alleged 
violations of the SPS Agreement  falls within the Panel's mandate and constitutes an integral part of its 
findings in this report. 
6.47 The European Communities, in its comments of 19 October 2007235, disagrees with the 
comments of Canada to the extent that, unlike in the case referred to by Canada where there was an 
express reference to another provision in the article allegedly breached, there is no reference in the 
term "removed" in Article 22.8 to any other provisi on.  The European Communities considers that if 
Canada's interpretation prevailed, the responding party would effectively be free to refer to any 
provision of the covered agreements and the terms of reference would become meaningless. 
6.48 The Panel considers that it has extensively explained why it believes that, while making 
actual findings regarding the compatibility of the EC Directive 2003/74/EC with the SPS Agreement  
is not part of its mandate, it h as jurisdiction to address the compa tibility of the Directive with the 
SPS Agreement  to the extent necessary to make findings in relation to Article 22.8 of the DSU, which 
is part of its mandate.  The Panel notes that this is  part of its duty to make an objective assessment of 
the matter pursuant to Article 11 of the DSU and a sentence has been added to that effect in the 
findings.236  The Panel also believes that its approach is  consistent with the scope of a panel mandate 
as confirmed by the Appellate Body. 
6.49 Moreover, the Panel considers that  the Appellate Body report in Argentina – Footwear 
(EC)237 does not support the view that the Panel coul d make actual findings with respect to the 
compatibility of the EC measure with the SPS Agreement .  First, the EC implementing measure 
(Directive 2003/74/EC) is not part of the terms of re ference of the Panel. Second, the Appellate Body 
report in Argentina – Footwear (EC)  confirms the reasoning of the Panel:   
"We have examined the specific paragraphs in the Panel Report cited by Argentina, 
and we see no finding  by the Panel that Argentina acted inconsistently with Article 3 
of the  Agreement on Safeguards .  In one instance238, the Panel referred to Article 3 
parenthetically in support of its r easoning on Article 4.2(a) of the  Agreement on 
Safeguards .  Every other reference to Article 3 cited by Argentina was made by the 
Panel in conjunction with the Panel's reasoning and findings relating to Article 4.2(c) 
of the Agreement on Safeguards .  None of these references constitutes a legal finding 
or conclusion by the Panel regarding Article 3 itself."239 
6.50 In that case, the panel had reviewed Article 3 of the Agreement on Safeguards  as part of its 
review of Article 4.2(a), not as a finding on Article  3. Article 3 was not mentioned in the terms of 
reference of the panel.  The Appellate Body agreed w ith the panel that it had to consider Article 3.  It 
even concluded that it had an obligation to do so.  But it also noted that the panel made no findings 
under Article 3.  Rather, its consideration of Article 3 was made in support of its reasoning on 
Article 4.2(a). 
                                                      
234 Paras. 14-16. 
235 Para. 21. 
236 Para. 7.374. 
237 Appellate Body Report on Argentina – Footwear (EC),  paras. 74-75. 
238 (footnote original ) Panel Report, para. 8.238. 
239 Appellate Body Report on Argentina – Footwear (EC) , para. 73.  WT/DS321/R 
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  6.51 Finally, Canada requests a modification to para graph 8.2 and the addition of a new paragraph 
confirming that the Panel's finding of a breach of Ar ticle 23.1 and 23.2(a) has been rendered moot by 
the current proceedings and the Panel's findings re garding Canada's compliance with Article 22.8 of 
the DSU.  Regarding paragraph 8.2, having duly  considered the EC comments on comments, we 
nonetheless decided to replace the term "legislation"  with the term "measure", consistent with 
Article 19.1 of the DSU.  Indeed, the measure  at issue has been previously defined in 
paragraph 7.138.  
6.52 Regarding Canada's request for the addition of a new paragraph, we do not agree with Canada 
that, through our comment in the first sentence of paragraph 7.350, we have recognized that recourse 
to Article 21.5 of the DSU has become unnecessary by virtue of the current proceedings.  What we 
meant was that this dispute was an a lternative to a recourse to Article 21.5 by the European 
Communities , not that it was an alternative to Ca nada complying with its obligations under 
Article 23.1 and 23.2(a) of the DSU.  We ha ve clarified this point in paragraph 8.3. 
4. Comments of the parties on the compliance of  the EC ban on meat and meat products 
treated with the six hormones at issue for growth promotion purposes with the SPS Agreement  in relation to the Panel's findings on the EC claims on Article 23.1, read 
together with Articles 22.8 and 3.7 of the DSU 
(a) Comments by the European Communities 
(i) Introductory comments 
6.53 In an introduction to its specific comme nts, the European Communities alleges: 
(a) that the Panel has dismissed the 1999, 2000 and 2002 Opinions as not constituting a 
proper risk assessment based on an alleged absence of specific evidence which, the 
European Communities claims, is impossible to provide; 
(b) that the Panel dismissed the Opinions as not having presented sufficient evidence to 
call into question the conclusions of JECFA; 
(c) that the Panel should have scrutinized JECFA's evaluations, which are based on old 
studies which were not publicly available a nd were not communicated to the Panel or 
the Panel's experts for review; 
(d) that the Panel has reached its conclu sions on the EC implementing measure 
(Directive 2003/74/EC) by relying selectively, for a number of important issues, on the statements of two experts in a group of six.  The European Communities recalls 
that those two experts had participated in  the drafting of the JECFA's assessments 
contradicted by the EC Opinions and we re obviously defending their own work and 
the methodology applied by JECFA and Codex.  Comparatively, the other four experts 
had overall validated and supported the conclu sions of the EC Opinions; and, finally, 
(e) that the Panel's methodology and reasoning are contrary to established principles on 
burden of proof and standards of review of genuine scientific questions by WTO 
panels and ordinary courts of law. 
6.54 Regarding the argument under (a) above, the Panel will address this question when it 
addresses the EC comments on the Panel' s findings under Article 5.1 of the SPS Agreement . As a 
preliminary remark, however, the Panel wishes to clarify that it did not "dismiss the opinion of a 
relevant committee constituted of highly regarded , independent scientific experts".  The Panel WT/DS321/R 
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  concluded that the European Communities had not evaluated specifically the possibility that the 
adverse effects related to the association between excess hormones and neurobiological, 
developmental, reproductive and im munological effects, as well as immunotoxicity, genotoxicity and 
carcinogenicity coming into being, originating or resulting from the consumption of meat or meat 
products which contain veterinary residues of oestradiol-17 β as a result of the cattle being treated with 
this hormone for growth promotion purposes.  Th e Panel also found that the scientific evidence 
referred to in the Opinions does not support the EC conclusions on genotoxicity, or the conclusion 
that the presence of residues of oestradiol-17 β in meat and meat products as a result of a cattle being 
treated with this hormone for growth promotion purposes leads to increase cancer risk.  Nor does the 
scientific evidence support the EC conclusions a bout the adverse immunologi cal and developmental 
effects of consuming meat and meat produc ts from cattle treated with oestradiol-17 β for growth 
promotion purposes.  This does not put into ques tion the results of the studies and research relied 
upon by the SCVPH, nor the conclusions reached by  the scientists, but simply the conclusions drawn 
by the European Communities on the basis of the science.  
6.55 Regarding the argument under (b) above, it is co rrect that the Panel considered that, in order 
to determine whether relevant scientific evidence was insufficient within the meaning of Article 5.7 of 
the SPS Agreement , it had to take the results of the risk assessments made by JECFA as a 
"benchmark" of the existence of suffi cient scientific evidence.  This is  in line with the findings of the 
Appellate Body in Japan – Apples  that the relevant scientific evid ence will be insufficient within the 
meaning of Article 5.7 if the body of available scien tific evidence does not allow, in quantitative or 
qualitative terms, the performance of an adequate assessment of risks as re quired under Article 5.1 
and as defined in Annex A to the SPS Agreement240, as well as with the presumption of compliance 
under Article 3.2 of the SPS Agreement .  
6.56 As far as the argument under (c) is concerned, th e Panel explained in its findings why it relied 
on JECFA's work without questioning it.241  First, using JECFA's risk assessments as "benchmarks" 
did not mean that the Panel had to examine the scientific evidence supporting JECFA's conclusions.  
Second, none of the parties contested that JECFA and Codex work on the hormones at issue (with the exception of MGA) constitute international standa rds, guidelines and recommendations within the 
meaning of Article 3.2.  Because sanitary meas ures which conform to international standards, 
guidelines or recommendations are deemed to be  consistent with the provisions of the SPS Agreement , 
the Panel had no reason to scrutinize the evaluation ma de by JECFA.  The only benefit of such an 
evaluation would have been to determine whethe r JECFA's risk assessment met the conditions of 
Article 5.1.  However, the question before the Pane l is not to review the validity of international 
standards – the Panel has no mandate to do that.  It is not to review whether JECFA's risk assessments 
are compatible with Article 5.1, but whether the EC implementing measure is compatible with 
Article 5.1 as far as oestradiol-17 β is concerned or justified unde r Article 5.7 for the other five 
hormones at issue.  The Panel also notes in this  respect that, whereas Members have, pursuant to 
Article 3.3, a right to introduce or maintain sanita ry measures which result in a higher level of sanitary 
protection than would be achieved by measures b ased on the relevant international standards, 
guidelines and recommendations, the way to do this is not by seeking to demonstrate that those 
standards, guidelines and recommendations are flawed  or outdated, which would simply show that 
they have become insufficient and would not ju stify the EC measure, but by providing positive 
evidence or information supporting the conformity of  the measure at issue with Article 5.1 and/or 
Article 5.7.  It was, thus, for the European Communities to provide convincing evidence, in line with 
the requirements of Article 3.3 of the SPS Agreement , to justify its definitive ban on oestradiol-17 β 
and that relevant scientific evidence was in sufficient for the other five hormones.  
                                                     
 
240 Appellate Body Report on Japan – Apples , para. 179. 
241 Paras. 7.621-7.625.  WT/DS321/R 
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  6.57 Regarding the argument according to which th e two experts involved in the drafting of 
JECFA's risk assessments were defending their ow n work and the methodology applied by JECFA 
and Codex, the Panel wishes to add to what it has already said above that, since JECFA's risk 
assessments were used as the reference risk assessments for purposes of the analysis under Article 5.7 of the SPS Agreement , it was necessary for the Panel to be able to rely on the advice of experts 
intimately knowledgeable about the su bstance of JECFA's risk assessments.
242  The purpose was not 
to check whether JECFA's risk assessments were supp orted by sufficient scientific evidence or carried 
out in accordance with Article 5 of the SPS Agreement , but to identify to what extent the concerns 
raised by the European Communities in its submissions  had been considered in the development of its 
risk assessments by JECFA (e.g. how the risk to pr epubertal children had been taken into account by 
JECFA).  Second, the Panel recalls that JECFA is an international, indepe ndent entity composed of 
highly qualified experts selected by the WHO or FAO according to strict procedures.243 JECFA also 
regularly reassesses its risk assessments, normally at th e request of Members of Codex, and evidence 
before the Panel suggest that the European Co mmunities did not request JECFA to reassess the 
hormones at issue on the basis of the new evid ence it had gathered.  Instead, the European 
Communities relied on its own risk assessment.  Moreover, JECFA reaches its conclusions by 
consensus.  So the opinions expr essed by the two experts were given with regard to the consensual 
view of JECFA on this matter, not just their own personal positions in the past.  This does not mean, 
however, that JECFA's work is these particular expe rts' own work:  it is a joint work by several 
experts.  The experts that the European Communitie s claims were defending their work acknowledge 
that the state of knowledge can evolve.  For instance, Dr. Boobis stated that: 
"[S]cience moves on, and it would be co mplacent for a risk assessment body to 
assume that it knew everything about a substance at a particular point in time.  We 
have to work within the available informa tion, and the question we  ask is: do we have 
sufficient information at this point to conduct a risk assessment? – not: is the data 
complete and are there no scientific questions remaining to be answered."244 
6.58 The experts consulted by the Panel are used to  considering and peer reviewing studies that go 
beyond what they have published themselves or perhap s even contradict them.  In other words, they 
are not likely to feel any need to defend their ow n previous work results in the light of new, 
convincing evidence or techniques that put such prev ious work into doubt.  The Panel also notes that 
other experts referred to JECFA's work in their replies, just as they also referred to studies 
commissioned by the European Communities.245  
6.59 The European Communities also argues that the remaining four experts "overall validated and 
supported the conclusions of the [SCVPH] Opinion[s]".   The Panel does not share this point of view.  
First, not all experts expressed their views on all the issues.  The experts who expressed their views 
often agreed with each other.  Second, the impressi on that a majority of experts overall validated and 
supported the conclusions of the SCVPH Opinions is incorrect.  With respect to the five provisionally 
banned hormones, to different degrees, the experts agreed that new studies would be useful.  This 
does not mean, however, that they considered them useful for the reasons a dvocated by the European 
Communities. The four experts agreed regarding the hazard related to hormones, or the risk attached 
to high doses.  But so did the tw o experts with JECFA experience.  
                                                      
242 In order to assess the appropriat eness for the Panel to seek advi ce from experts involved in the 
preparation of JECFA's risk assessment, it is also importa nt to recall that the experts are being consulted in the 
context of an assessment of the EC implementing measure under Articles 5.1 (and accessorily 5.2 in 
WT/DS320), 5.7 and 3.3 of the SPS Agreement , and of the presumption of conformity with the SPS Agreement  
of measures based on international standards. 
243 JECFA's reply to question 14 of the Panel. See also Dr. Boobis, Annex G, para. 511; Dr. Tritscher, 
Annex G, para. 515; Dr. Wennberg, Annex G, para. 517. 
244 See Annex G, para. 346. 
245 See, e.g. Dr. Guttenplan, Annex D, para. 145. WT/DS321/R 
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  6.60 As to the argument that the Panel's methodol ogy and reasoning are contrary to established 
principles on burden of proof and standards of review  of genuine scientific questions by WTO panels 
and ordinary courts of law, the Panel wishes to  recall its findings at pa ragraphs 7.377-7.383 and 
7.403-7.418 on the standard of review and burden of  proof.  The Panel has also explained why it gave 
particular relevance to JECFA's risk assessments  and why, to the extent that the European 
Communities disagreed with JECFA, it had to prove that its measure was based on a risk assessment 
consistent with Article 5.1 and Annex A(4) of the SPS Agreement , or that the relevant scientific 
evidence was insufficient. 
6.61 The European Communities argues that the statement originally found in paragraph 7.368 was 
not accurate as the European Communities was alle gedly replying to a hypothetical question and 
stated that it was not necessary to lo ok into the scientific issues.  Th e Panel notes that the European 
Communities stated in its reply to question 74 of the Panel246 that "it did not believe that it [was] 
necessary to look into the scientific issues".  The European Communities did not formally object  to 
the Panel seeking scientific opinion even if  the Panel proceeded with reviewing the SPS Agreement .  
Indeed, the European Communities added in its reply to the same question 74:247 
"However, the European Communities does not believe that the Panel would have the 
expertise to decide on such issues itself, should the Panel decide to go down [the 
road] of deciding the scientific issues at st ake.  In such a scenario, the European 
Communities believes that the consultation of scientific and technical advice would 
be absolutely necessary." 
6.62 The European Communities argues th at it was replying to an hypothetical question. Yet, the 
European Communities uses the affirmative and not th e conditional in its reply when it states that  
"New experts will have to be chosen".248  The Panel concludes that, whereas the European 
Communities was not of the view that it was n ecessary to look into the sci entific issues, it was 
nevertheless in favour of the consultation of scien tific experts if the Panel decided to address the 
scientific issues at stake.  Paragraph 7.368 was modified accordingly. 
6.63 The European Communities suggests that the Panel contradicted itself in paragraph  7.371  
when it stated, on the one hand, that parties had had sufficient opportunity to comment on the other party's allegations and, on the other hand, in paragraph 7.124, refused to allow the European 
Communities clarify the nature of a number of fact ual errors allegedly made by the United States and 
Canada.  In paragraph 7.124, th e Panel took the view that the European Communities should not be 
allowed to make further comments, lest the other parties would also comment and this would launch 
an endless exchange of arguments.  The Panel not es that parties were allowed to comment on the 
experts' responses and to comment on the comments of the other party. In addi tion, the parties were 
allowed to comment on each other's replies to the questions of the Panel after the second substantive 
meeting. This is fully consistent  with usual panel procedures.  Mo reover, the European Communities 
could correct any factual error appearing in the interim report by requesting the Panel to review 
precise aspects of the interim report, if the allege dly erroneous information provided by the United 
States and Canada had been used in the findings.  Th e Panel notes that the EC request to correct some 
factual statements made by the other parties was lim ited to factual aspects, not to legal issues such as 
allegations of inc onsistency with the SPS Agreement , which was the subject of this paragraph.  The 
Panel nonetheless decided to clarify paragraph 7.371 . 
                                                     
 
246 EC's replies to Panel questions after the first substantive meeting, Annex B, para. 274. 
247 EC's replies to Panel questions after the first substantive meeting, Annex B, para. 275. 
248 The Panel also notes that the European Communities made an alternative claim of violation of 
Article 22.8 of the DSU and Articles I and II of the GA TT 1994, in isolation from its claim under Articles 23.1 
and 3.7 of the DSU which was based on an allegatio n of actual compliance with the recommendations and 
rulings of the DSB in the EC – Hormones  case.    WT/DS321/R 
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  6.64 The European Communities argues that, in para graphs 7.373-7.374, the Panel states that its 
approach was a "pragmatic solution" and the "most l ogical way forward" without further explanation.  
The European Communities considers that the appr oach of the Panel is arbitrary and negatively 
affects the interests of the parties and reverses  existing case law and established practice. The Panel 
first notes that the European Communities doe s not specify which "existing case law" and 
"established practice" it refers to, and that it does no t make any reference to its previous submissions.  
Second, the Panel notes that these paragraphs c ontain only additional arguments.  The Panel has 
amply justified its decision to address the compa tibility of the EC implementing measure with the 
SPS Agreement  throughout the preceding paragraphs.  Th e Panel also explains the reason why it 
follows this approach in paragraph 7.374, emphasi zing the need to assist the parties and the DSB in 
solving this dispute and the need to determine whether there is a violation of Article 23.1 in 
conjunction with Article 22.8 and Article 3.7 of th e DSU.  The Panel's choice was directed by the 
requirement to make an objective assessment of th e matter before it, in accordance with Article 11 of 
the DSU, having regard to the particular circumstan ces of this case, as recalled in Section VII.C.2.(a) 
of this report. 
6.65 The European Communities stat es that paragraph 7.401 and footnote 506 are factually 
inaccurate.  This comment can only relate to and be  limited to the refusal of the Panel to let the 
European Communities correct alleged factual  errors in the comments of Canada and the United 
States on the EC replies to the questions of the Pane l after the second substantive meeting.  First, the 
European Communities never identifie d the factual errors at issue.  Second, the Panel explained its 
position in its letter of 20 November 2006.  The Panel recalls that it followed the standard practice of 
panels in terms of procedure, allowing comments on replies to the questions of the Panel.  The Panel 
felt justified in not allowing further comments.  Th e Panel stressed that the European Communities 
could address these factual errors at the interim review  stage, if they were reflected in the findings of 
the Panel.  It appears that the European Communities did not take advantage of this opportunity as no 
such factual corrections were made.  Thus , the Panel sees no reason to correct paragraph  7.401 and 
footnote 506. 
6.66 The reference to Article 5.2 of the SPS Agreement  in paragraph 7.434  has been removed. 
6.67 The European Communities argues, with resp ect to paragraph 7.411, that the Panel 
misconstrued its role by engaging in settling a scien tific debate and arbitrating the opinions expressed 
by the scientific community by "picking and choosin g" from individual replies of experts without any 
valid explanation.  The Panel explained in its find ings in paragraph 7.69 why it deemed it preferable 
to consult experts individually.  The Panel had al so explained in its letter to the parties of 
25 November 2005 how it understood its role in terms of assessment of scientific opinions.  The Panel 
believes that weighing the scientific evidence before it was necessary to reply to the two main legal 
questions in relation to the SPS Agreement , i.e. whether the European Communities had performed a 
risk assessment within the meaning of Article 5.1 for oestradiol-17 β and if the relevant scientific 
evidence was sufficient within th e meaning of Article 5.7 as far as the other hormones were 
concerned.  In fact, the Appellate Body confirme d the discretion of Panels in weighing evidence in 
EC – Asbestos .249  This is also part of the role of panels under Articles 11 and 13 of the DSU.  The 
Panel also considers that the role of the experts was to act as an "interface" between the scientific 
evidence and the Panel, so as to allow it to perform its  task as the trier of fact.  If panels were not to 
weigh the scientific evidence before them, then th e DSU would have mandated the recourse to experts 
review groups.  The Panel also notes that  the Appellate Body took the view in EC – Hormones , that 
both the SPS Agreement  and the DSU leave to the discretion of a panel the determination of whether 
the establishment of an expert review group is necessary or appropriate.250  The Panel explained its 
approach in detail in paragraph 7.411 and thus does not believe that it engaged into "picking and 
                                                      
249 Appellate Body Report on EC – Asbestos , para. 161. 
250 See para. 7.72. WT/DS321/R 
Page 116 
 
 
  choosing" without any valid explanation.  The Pane l notes that some replies to its questions were 
more detailed than others and supported by bibliogr aphical references.  The Panel believes that, in 
case of divergence of opinions between the experts, and having due regard to the comments of the 
parties and the clarifications provided by the expe rts at the meeting with the Panel, it was a sound 
approach to take into account, in forming its own opi nion, the opinions that were the most precise and 
elaborate.  Therefore, having also considered the comments of the respondent of 19 October 2007, the 
Panel did not deem it necessary to revise paragraph 7.411.   
6.68 The European Communities considers that, in pa ragraphs 7.414-7.418, the Panel missed the 
point made by the European Communities, namely that neither the United States, Canada nor JECFA 
have provided conclusive proof that the methods used to generate the outdated evidence on which 
they based and continue to base th eir risk assessment were validated.  The Panel first notes that the 
paragraphs at issue are part of an introductory section, not one where the validity of the evidence 
actually relied upon by JECFA is being discussed.  S econd, the purpose of the discussion contained in 
the paragraphs at issue is clearly stated in para graph 7.418.  The point made by the Panel is that a 
study is not ipso facto  irrelevant because it is old.  The Pane l makes two points in paragraph 7.418: (i) 
that accuracy is a problem when one is at the limits of detection of the older methods and (ii) that in 
any event an essential question is whethe r a given method has been validated. 
6.69 Second, the European Communities' comment rais es the question whether there is a need for 
the United States and Canada to prove that JECFA' s risk assessments were based on validated studies. 
In the opinion of the Panel, this is not a question that needs to be addressed in order to resolve this 
dispute.  JECFA's risk assessments were used as the bases for Codex recommendations which are, 
pursuant to Article 3.1 and Annex A(3) of the SPS Agreement , "international standards, guidelines or 
recommendations".  Pursuant to Article 3.3, it is for the WTO Member wishing to introduce or 
maintain sanitary measures which result in a higher  level of sanitary protection than would be 
achieved by measures based on the re levant international standard s, guidelines and recommendations 
to provide scientific justification in support of such measures.  In that context, the question before the 
Panel is not whether JECFA's risk assessments were based on validated studies251, but whether the 
European Communities' permanent ban on meat and meat products containing veterinary residues of 
oestradiol-17 β derived from cattle treated with this hormone  for growth promotion purposes is based 
on a risk assessment within the meaning of Artic le 5.1 and, for the five provisionally banned 
                                                      
251 The Panel did not use the quotation from Dr. Wennberg in paragraph 7.417 to argue that JECFA's 
studies were actually validated, but to stress that if a study used a validated method, there is no reason to reject it 
simply because it is old. The problem with some of the more recent stud ies on which the Eu ropean Communities 
relies is that they have not been validated.  The Europe an Communities also refers to statements of Dr. De 
Brabander (Annex G, paras. 670, 675, 681 and 687) and Dr. Sippell (Annex G, para. 689).  The Panel 
understands from Dr. De Brabander's comments that there would be reasons to re-do certain assessments, inter 
alia because the separation power of components has incr eased considerably since th e 1980s (see para. 681).  
However, the Panel notes that Dr. De Brabander insists on the fact that one cannot say that the "old" data are not 
correct on not valid un til they are checked with modern analytical methods, which, according to him, has not 
been done.  Dr. Sippell states that, for infant a nd young children, a standard commercially available 
radioimmunoassay is not able to pick up the real concentrations, because there are numerous other cross-reacting steroids.  Dr. Sippell concludes that "one should really look at the new data".  Whereas this statement 
suggests that old data are not valid, Dr. Sippel stops short of formally concluding that they are not valid. We 
also note Dr. Boobis' comment following Dr. Sippell's intervention (Annex G, para. 691): 
 
"I would make the point that a method that is used to measure low levels of oestrogens in 
infants is a different question from a method that is being used to measure residues in food.  
The analytical challenges are quite different and the methods that were developed in the 1980s 
for the residues were fit for that purpose, and that is what they were used for.  If you ask the 
question about the circulating concentrations, that is a different issue.  So in terms of residues 
the methods were suitable." 
  WT/DS321/R 
 Page 117 
 
 
  hormones, whether there exists validated  studies that sufficiently put into question the evidence on 
which JECFA's risk assessments are based, so as to s upport a conclusion that the relevant scientific 
evidence is insufficient to pe rmit the assessment of risk. 
(ii) General comments on the Panel's analysis regarding oestradiol-17 β 
6.70 The European Communities argues that the use of  the term "measure" in paragraphs 7.432 
and 7.490 to describe the Panel's function is unfor tunate because "it is clear that a panel does not 
measure anything (which implies that there is something quantitative to measure), but simply 
examines the conformity of the measure with the relevant provisions."252  The Panel notes that it used 
the term "measure" in the sense, as defined by the Oxford English Dictionary, to "judge or estimate 
the greatness or value of (a person, a quality, et c.) by a certain standard or rule; appraise by 
comparison with something else."253  The Panel believes that judging or appraising something, in this 
case the SCVPH Opinions, against a certain standard or  rule, in this case Article 5.1 and Annex A(4) 
of the SPS Agreement , is precisely examining the conformity of the measure with the relevant 
provisions.  Therefore, the Panel will not change the term.  However, the Panel wishes to clarify here 
that it did not intend to use the term "measure" to imply any sort of quantitative analysis.   
6.71 The European Communities also st ates that it did not understand the Panel's use of the term 
"objective measures" in the paragraph of the inte rim report corresponding to  paragraph 7.432.  The 
European Communities correctly points out an error in the paragraph.  The fourth sentence should 
read "The Panel must objectively measure the Opini ons against the relevant standard for whether a 
risk assessment has been conducted, which can be  found in the texts of Articles 5.1 as well as 
Annex A(4) of the SPS Agreement ."  Again, the Panel notes that it is using the term "measure" in the 
sense of a qualitative appraisal of the SCVPH Opini ons against a standard or rule, namely the 
SPS Agreement . 
(iii) Comments on "risk assessment techniques" 
6.72 The European Communities argues that the discussion by the Panel of risk assessment 
techniques in paragraphs 7.435-7.459 is irrele vant and unnecessary give n that no relevant 
international risk assessment techniques for ve terinary drug residues have been agreed upon.254   
6.73 The Panel notes that Article 5.1 requires that Members take into account the risk assessment 
techniques of the relevant international organi zations when ensuring that their sanitary and 
phytosanitary measures are based on a risk assessment.  Therefore, the Panel believes that an analysis 
of whether such techniques exist and whether th e European Communities took them into account is 
necessary and appropriate to an analysis of wh ether the European Comm unities has removed the 
previously found inconsistency of its ban on the importation of meat and meat products treated with 
oestradiol-17 β for growth promotion purposes with Article 5.1 of the SPS Agreement .   
6.74 The Panel notes in paragraph 7.438 that no specifi c techniques or guidelines has thus far been 
formally adopted by Codex for use by nationa l governments in conducting risk assessments of 
veterinary drug residues.  However, there are relevant  definitions of the phases of a risk assessment as 
well as guidelines and practices for conducting a risk assessment in the general sense and the Panel, 
therefore, analyses whether th e European Communities took these into account when it adopted 
Directive 2003/74/EC.   
                                                      
252 EC's comments on inte rim report, para. 50. 
253 Shorter Oxford English Dictionary , 5th edition (1993), p. 1730. 
254 EC's comments on inte rim report, para. 51. WT/DS321/R 
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  6.75 The European Communities also  argues that these passages convey the erroneous message 
that the concept of risk assessment as defined in the SPS Agreement  is the same as in Codex 
Alimentarius.255   
6.76 The Panel is surprised by this comment, because it states in paragraph 7.457: 
"[T]he Panel must concur with  the reasoning of the panel in Japan – Apples , that the 
requirement to "take into account" the ri sk assessment techniques of international 
organizations: 
'[D]oes not impose that a risk assessment under Article 5.1 be 'based 
on' or 'in conformity with' such risk assessment techniques.  This 
suggests that such techniques should be considered relevant, but that a failure to respect each and every aspect of them would not 
necessarily, per se , signal that the risk assessment on which the 
measure is based is not in conformity with the requirements of Article 5.1.'"
256 
6.77 The Panel finds that this quotation adequately  conveys the Panel's opinion that although the 
risk assessment techniques of the relevant interna tional organizations must be considered by the 
Members, they are not binding on Members and that  not following them would not necessarily lead to 
the conclusion that the risk assessment did not co nform with Article 5.1 and Annex A(4) of the 
SPS Agreement .  However, to avoid confusion, the Pa nel clarified paragraph 7.457 and added 
paragraph 7.458. 
6.78 The European Communities also ta kes issue with paragraph 7.444.  In that paragraph the 
Panel summarizes the arguments of th e European Communities as follows: 
"The European Communities  agrees that the risk assessment techniques developed 
by Codex are relevant and contemplated in  Article 5.1's requirement to take into 
account the risk assessment techniques de veloped by relevant international 
organizations." 
6.79 The European Communities argues that this pa ragraph is misleading because the European 
Communities has followed the four steps of risk assessment described by Codex.  The European 
Communities asserts that it has followed the four step s because its legislation so provides, not because 
it is required to do so under the SPS Agreement , since such techniques do not exist. 
6.80 The Panel notes that it does not discuss in any way in paragraph  7.444 whether the European 
Communities has complied with the four steps.  In addition, the Panel notes in paragraph 7.446 that 
"the European Communities argues that the risk assessment at the basis of Directive 2003/74/EC 
precisely follows the four steps of risk assessment as defined by Codex ..."  
6.81 It is irrelevant for the Panel whether the EC internal legislation mandates that the European 
Communities follow the four steps or whether th e European Communities complied with its own 
legislation.  The Panel's analysis focuses on whether the European Communities "took into account" 
the relevant risk assessment techniques of the re levant international organizations as required by 
Article 5.1 of the SPS Agreement  and, in paragraph 7.459, the Panel finds that it has. 
                                                      
255 EC's comments on inte rim report, para. 51. 
256 Panel Report on  Japan – Apples , para. 8.241.  WT/DS321/R 
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  6.82 The European Communities asks the Panel to  more fully summarize its arguments in 
paragraphs 7.474 and 7.475.257  The Panel has, therefore, modified those paragraphs.  
(iv) Assessment of the scientific arguments 
6.83 The European Communities, argues that paragraphs  7.476-7.509 are incoherent and confused.  
Specifically, the European Communities believes that they do not adequately present the debate on the 
"threshold approach" which it believes is the central scientific debate.258  The Panel notes that the 
content of paragraphs 7.476-7.509 contains the reasoning of the Pane l on whether the Opinions satisfy 
the definition of a risk assessment set forth in Annex A(4) of the SPS Agreement .  This section of the 
Panel's reasoning is not the appropriate place to present  a debate between the parties about a particular 
scientific issue.  
6.84 The Panel, however, is mindful that the par ties did expend a significant amount of argument 
on the relevance of "thresholds" to the risk assessment process and that perhaps it would provide 
further clarity to include more explanation of th e various arguments.  Therefore, the Panel made 
modifications to the summaries of the parties' argume nts.  The Panel believes that the debate over the 
"threshold" issue can be divided into two main co mponents.  First, whether all four of the risk 
assessment steps as defined by Codex should be foll owed when the substance under review exhibits 
no threshold.  Second, whether oestradiol-17 β is such a substance that exhibits no threshold because it 
is genotoxic in vivo and therefore would lead to adverse effects even at the doses found in meat as a 
result of treatment of cattle with oestradiol-17 β for growth promotion purposes. 
6.85 The Panel also feels that it would be helpful to  include some additional information provided 
by the experts with respect to this matter.  Th erefore, the Panel inserte d a new paragraph after 
paragraph 7.454.   The Panel also changed the first sentence of paragraph  7.457. 
6.86 With respect to whether oestradiol-17 β, in particular, is genotoxic in vivo  and has no 
threshold, the Panel finds that the issue arises in two different contexts:  first, in the context of what 
such a conclusion means for evaluating whether th e SCVPH Opinions constitute a risk assessment 
within the meaning of the SPS Agreement ;  second, in the context of the analysis of whether the 
science supports the conclusions reached by the Eu ropean Communities with respect to the genotoxic 
properties of oestradiol-17 β.  To address both of these issues the Panel edited paragraph 7.469. 
6.87 The Panel also feels that it would be helpful to  include some additional information provided 
by the experts with respect to this matter.  Th erefore, the Panel inserte d a new paragraph after 
paragraph 7.501. 
6.88 With respect to whether the science s upports the conclusion that oestradiol-17 β is a substance 
that exhibits no threshold, the Panel has adde d Dr. Cogliano's response to question 19 from the 
Panel259 as paragraph 7.527 .  
                                                      
257 EC's comments on inte rim report, para. 52. 
258 EC's comments on inte rim report, para. 53. 
259 Panel question 19, Annex D, p. 34 ("The Europe an Communities states that '... it is generally 
recognized that for substances which have genotoxic potential (as is the case with oestradiol-17 β) a threshold 
can not be identified.  Therefore it cannot be said that  there exist a safe level below which intakes from residue 
should be considered to be safe.  Therefore the fact that doses used in growth promotion are low is not of relevance'.  Does the scientific evidence referred to by the European Communities support these conclusions?  
Would your reply have been different at the time of adoption of the EC Directive in September 2003? If so, 
why? [see para. 201 of EC Rebuttal Submission (US case), paras. 120-122 of EC Rebuttal Submission (Canada case), paras. 73 and 86-98 of Canada Rebuttal Submission, paras. 87-91 and 153-156 of US First Submission 
and paras. 35-40 and 46 of US Rebuttal Submission]") WT/DS321/R 
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  6.89 The European Communities argues that paragraphs 7.487 and 7.488 of the interim report are a 
misinterpretation of what the Appellate Body found in the original EC – Hormones  case about the 
concept of risk assessment and its significance in the SPS Agreement .260  The European Communities 
does not provide any specific parts of the analysis th at it feels are a misinterpretation, neither does it 
provide what it believes is the correct interpretati on.  The Panel can only assume that the European 
Communities maintains its position as summarized in paragraph 7.489. 
6.90 The Panel based its reasoning in paragraphs 7. 487 and 7.488 of the interim report on several 
passages in the Appellate Body Report on EC – Hormones .  Paragraph 181 of the Appellate Body 
Report reads as follows: 
"The second preliminary consideration relat es to the Panel's effort to distinguish 
between 'risk assessment' and 'risk manage ment'.  The Panel observed that an 
assessment of risk is, at least with resp ect to risks to human life and health, a 
'scientific' examination of data and factual studi es;  it is not, in the view of the Panel, 
a 'policy' exercise involving social value judgments made by political bodies.261  The 
Panel describes the latter as 'non-scientific' and as pertaining to 'risk management' 
rather than to 'risk assessment'.262  We must stress, in this connection, that Article 5 
and Annex A of the SPS Agreement  speak of 'risk assessment' only and that the term 
'risk management' is not to be found either  in Article 5 or in any other provision of 
the SPS Agreement .  Thus, the Panel's distinction, which it apparently employs to 
achieve or support what appears to be a r estrictive notion of risk assessment, has no 
textual basis.  The fundamental rule of treaty interpretation requires a treaty interpreter to read and interpret the wo rds actually used by the agreement under 
examination, and not words which the interp reter may feel should have been used." 
6.91 The Appellate Body disapproved of the panel's use in the original EC – Hormones dispute of 
the distinction between "risk assessment" and "risk management" because it had no textual basis.  
However, this did not mean that the Appellate Bo dy endorsed an interpretation of Article 5.1 or 
Annex A(4) of the SPS Agreement  that included a risk management stage.  In fact, it emphatically 
stated that the term "risk management" is not to be  found in Article 5 or any other provision of the 
SPS Agreement.  The Panel, therefore, finds no basis for the European Communities' assertion that the 
Appellate Body confirmed that a risk assessment wi thin the meaning of Article 5.1 includes "a risk 
management stage which to carry out is the respons ibility of the regulator and not of the scientific 
bodies."
263   
6.92 This Panel, following the advice of the Appellate  Body, has adhered strictly to the text of 
Article 5.1 and Annex A(4) of the SPS Agreement  in its interpretation.  In analysing the European 
Communities' compliance with Article 5.1 and Annex A(4) of the SPS Agreement , the Panel is also 
cognisant of the Appellate Body's finding that: 
"The listing in Article 5.2 begi ns with 'available scientific evidence';  this, however, is 
only the beginning.  We note in this connection that the Panel states that, for purposes 
of the EC measures in dispute, a risk assessment required by Article 5.1 is 'a scientific  
process aimed at establishing the scientific  basis for the sanitary measure a Member 
intends to take'.264  To the extent that the Panel intended to refer to a process 
characterized by systematic, disciplined a nd objective enquiry and analysis, that is, a 
                                                      
260 EC's comments on inte rim report, para. 55. 
261 (footnote original ) US Panel Report, para. 8.94;  Ca nada Panel Report, para. 8.97.  
262 (footnote original ) US Panel Report, para. 8.95;  Ca nada Panel Report, para. 8.98.  
263 EC's second written submission, para. 116. 
264 (footnote original ) US Panel Report, para. 8.107;  Ca nada Panel Report, para. 8.110.   WT/DS321/R 
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  mode of studying and sorting out facts and opinions, the Panel's statement is 
unexceptionable.265  However, to the extent that the Panel purports to exclude from 
the scope of a risk assessment in the sense of Article 5.1, all matters not susceptible 
of quantitative analysis by the empirical  or experimental laboratory methods 
commonly associated with the physical sciences, we believe that the Panel is in error.  
Some of the kinds of factors listed in Article 5.2 such as 'relevant processes and 
production methods' and 'relevant inspection, sampling and testing methods' are not 
necessarily or wholly susceptible of investigation according to laboratory methods of, for example, biochemistry or pharmacolog y.  Furthermore, there is nothing to 
indicate that the listing of factors that may be taken into account in a risk assessment 
of Article 5.2 was intended to be a closed list.  It is essential to bear in mind that the risk that is to be evaluated in a risk assessment under Article 5.1 is not only risk 
ascertainable in a science laboratory opera ting under strictly controlled conditions, 
but also risk in human societies as they actually exist, in other words, the actual 
potential for adverse effects on human health in the real world where people live and 
work and die."
266 
6.93 Therefore, the Panel finds that a risk assessmen t consistent with Article 5.1 need not be 
limited to empirical or experimental laborator y methods commonly associated with the physical 
sciences.  However, the Panel also agrees with the Appellate Body's statement that a requirement that 
a risk assessment be "a process characterized by systematic, disciplined and objective enquiry and 
analysis, that is, a mode of studying and so rting out facts and opinions" is unexceptionable. 
6.94 Nowhere in the texts of Article 5.1 and A nnex A(4) does the Panel find support for the 
European Communities' contention that a ri sk assessment within the meaning of the SPS Agreement  
includes "weighing policy alternativ es in light of the results of ri sk assessment and, if required, 
selecting and implementing appropriate cont rol options, including regulatory measures."267  What the 
European Communities seems to be describing is  how a government choos es an appropriate SPS 
measure based on a risk assessment.  The Panel does not  find that this is contemplated by the texts of 
Article 5.1 and Annex A(4) of the SPS Agreement . 
6.95 To avoid any confusion or misunderstandi ng the Panel modified paragraphs 7.490  through  
7.492. 
6.96 The Panel is aware that the experts responded to the Panel's questions with respect to what the 
European Communities had evaluated in its Opinions by  using a terminology that is standard for risk 
assessments conducted according to th e process outlined in the Codex Procedural Manual.  Although 
the scientific experts' responses may include term s such as "hazard characterization" or "exposure 
assessment", the Panel is at all times aware that the relevant standard against which it is assessing the 
European Communities' measure is that of the SPS Agreement .  In order to emphasize this point, the 
Panel added a new paragraph be fore paragraph 7.494.   
                                                      
265 (footnote original ) "The ordinary meaning of 'scientific' , as provided by dictionary definitions, 
includes of, relating to, or used in science', broadly, ha ving or appearing to have an  exact, objective, factual, 
systematic or methodological basis', of, relating to, or e xhibiting the methods or principles of science' and of, 
pertaining to, using, or based on the methodology of scienc e'.  Dictionary definitions of science' include the 
observation, identification, descripti on, experimental investigation, and theoretical explanation of natural 
phenomena', any methodological activity, discipline, or study', and knowledge attained through study or practice'".  
(footnotes omitted)  United States' Statement of Administrative Action, Uruguay Round Agreements Act , 203d 
Congress, 2d Session, House Document 103-316, Vol. 1, 27 September 1994, p. 90.  
266 Appellate Body Report on EC – Hormones , para. 187. 
267 EC's reply to question 24 of the Panel after the first substantive meeting, Annex B-1, para. 137. WT/DS321/R 
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  6.97 The European Communities takes i ssue with the reliance of the Panel on certain statements by 
the experts in paragraphs 7.494-7.500 and cites to various other statements by the same experts which 
it claims stand for the opposite proposition.268  The Panel takes note that Annex D, which contains the 
replies of the experts to the Panel's questions is 116 pages long and Annex G which contains the 
transcript of the Panel's meeting with the experts is  170 pages long.  This does not include the various 
comments and comments on comments of the parties on the experts' responses and on the transcripts.  
With this volume of information, every comment by the experts could not be included in the Panel 
findings and, for that matter, did not have to be.269  Therefore, the Panel made a decision to select 
quotations that are representative of a particular expert's opinion on a given topic.  The Panel has 
reviewed the specific paragraphs referred to by th e European Communities in an attempt to determine 
if it misunderstood or misrepresented a particular expert's opinion.   
6.98 With respect to Dr. Guttenplan, the European Communities objects to the Panel's reliance on 
paragraph 145 of the experts replies to the Panel's questions and refers the Pa nel to paragraphs 366, 
393, 713, and 716-718 of Annex G as well as his wr itten reply to Panel ques tion 17 which is at 
paragraph 176 of Annex D.270 
6.99 With respect to the Panel's reliance on paragra ph 145 of Annex D, which is Dr. Guttenplan's 
response to Panel question 13, cite d in paragraph 7.495, the Panel amended the para graph to better 
reflect Dr. Guttenplan's complete response to the question.  
6.100  Additionally, to more fully reflect Dr. Gutte nplan's written answer to question 52 of the 
Panel, the Panel modified paragraph 7.500. 
6.101  With respect to Dr. Guttenplan's other interven tions cited by the European Communities, the 
Panel did not deem it necessary to make an y additional changes in this section.   
6.102  Paragraph 366 of Annex G refers  to Dr. Guttenplan's opinion that oestrogen is genotoxic, but 
that it may not be possible to "really estimate the ri sk at this point from such low levels of genotoxic 
effects."271  Paragraph 393 of Annex G re fers generally to the issue of  conducting risk assessments of 
genotoxic substances with no threshold.272  The Panel believes it has dealt with these issues in the 
amendments mentioned above.   
6.103  Paragraphs 713 and 716-718 of Annex G reflect Dr. Guttenplan's opinion that although, 
because anything is possible, there may be a risk  from consumption of meat derived from cattle 
treated with oestradiol-17 β for growth promotion purposes, it is so low that it is not susceptible to 
calculation.  It also reflects an interjection by  the European Communities asking Dr. Guttenplan to 
confirm his statement that, although the risk is smal l and cannot be evaluated or calculated, it is not 
zero. 
6.104  The Panel does not believe that these statements ar e directly relevant to the Panel's reasoning 
on whether the European Communities conducted a risk  assessment consistent with the definition set 
forth in Annex A(4) of the SPS Agreement .  As the Panel has noted, the purpose of the risk assessment 
is to evaluate the possibility that an identified adve rse effect comes into bei ng, originates, or results 
from the presence of the identifie d additives, contaminants, toxins or disease-causing organisms in 
food, beverages or feedstuffs.  It is not to guara ntee that said possibility w ill be below the Member's 
appropriate level of protection or indeed will be zero.   
                                                      
268 EC's comments on inte rim report, para. 56. 
269 Appellate Body Report on EC – Hormones , para. 138; see also Section VII.C.3.(d)(iii) of this report. 
270 EC's comments on inte rim report, para. 56. 
271 Transcript of the Panel meeting with the experts, Annex G, para. 366. 
272 Transcript of the Panel meeting with the experts, Annex G, para. 393.  WT/DS321/R 
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  6.105  Finally, the European Communities cites Dr. Guttenplan's written response to question 17 of 
the Panel.  In that paragraph, Dr. Guttenplan st ates that the absence of catechol metabolites in meat 
from treated animals does not imply that the meat is  without risk for genotoxicity.  Dr. Guttenplan 
was being asked to evaluate a particular argument by Canada.  The Panel does not read this statement 
as implying that the residues of oestradiol-17 β in meat from treated cattle are definitely genotoxic.  
However, even if this were the case, the  issue of ge notoxicity is only relevant  to the issue of whether 
a threshold could be determined for this substance.   Again, the Panel believes it has addressed this 
point with the additions and edits suggested above. 
6.106  The European Communities also refers the Panel to various interventions by Dr. Cogliano at 
the Panel meeting with the experts, namely, pa ragraphs 400, 404, 406, 409, 870, and 1021-1025 of 
Annex G.273  In paragraphs 400, 404, and 406 of Anne x G, Dr. Cogliano provides the Panel with 
general background information on the issue of th resholds and linear dose response curves.  The 
comments are not specific to the Opinions of the European Communities and therefore are not 
relevant to the analysis the Panel is undertaking in this particular section.  Paragraph 409 of Annex G 
contains a question from the Chairman.  The Pane l is unsure whether the European Communities 
meant to refer to paragr aph 408 or paragraph 410.274  In any event, in both those paragraphs 
Dr. Cogliano provides general background informa tion on what is meant by a linear dose response 
curve.   
6.107  Dr. Cogliano, in paragraph 871 of Annex G275, states that the data are not sufficient to conduct 
a "JECFA-style" risk assessment if oestradiol-17 β has no threshold.  The Panel finds this statement 
unremarkable for two reasons.  First, the Panel is  not evaluating whether the European Communities 
has done a "JECFA-style" risk assessment, but whet her it has done a risk assessment consistent with 
the definition set forth in Annex A(4) of the SPS Agreement .  Second, the European Communities has 
not argued that there is insufficient data to conduct a risk assessment of oestradiol-17 β, it has argued 
that it has conducted a risk assessment of oestradiol-17 β that is consistent with the SPS Agreement , 
that its measure is based on that risk assessment and that, consequently, it has acted consistently with 
Article 5.1 of the SPS Agreement .  Dr. Cogliano's statement, in the paragraph cited by the European 
Communities, is not directly relevant in this context.  
6.108  Paragraphs 1021 through 1025 of the transcript of  the panel meeting with the experts report a 
discussion where both Drs. Boobis and Cogliano confir m that the fundamental difference between the 
JECFA study and the SCVPH Opinions is the willingn ess to assume a threshold and interpret the data 
from that standpoint.  The Panel has now cited these interventions in the new paragraphs 7.455-7.456 
and paragraph 7.502.   
6.109  In its comments on the interim report, the Eur opean Communities argues that if the Panel had 
properly looked at Dr. Cogliano's interventions in th ese paragraphs of the transcript the Panel would 
have had to conclude that the European Communities' risk assessm ent has followed one side of a 
legitimate debate while JECFA has followed another.276  The European Communities seems to imply 
that if the Panel recognizes this it would also c onclude that the European Communities' ban on the 
importation of meat and meat products from cattle treated with oestradiol-17 β for growth promotion 
purposes was based on a risk assessment within the m eaning of Article 5.1 and Annex A(4) of the 
                                                      
273 EC's comments on interim report, paras. 56-58. 
274 Because the specific paragraph references by th e European Communities in its comments on the 
interim report frequently tend to differ from the versio n in Annex G, the Panel believes that the European 
Communities must have prepared its interim comments with  a different version of the transcript than the one 
contained in Annex G.  In each instance of mistaken citation, the Panel has read the paragraphs in the transcript 
surrounding those cited by the European Communities to en sure that it has correctly identified and is responding 
to the concerns expressed by the European Communities.   
275 Paragraph 870 is the Chairman giving the floor to Dr. Cogliano. 
276 EC's comments on interim report, paras. 57-64. WT/DS321/R 
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  SPS Agreement .  The Panel does not see the issue in quite the same manner as the European 
Communities.  The issue is not whether a risk assessment following the four steps as defined by 
Codex could or should have been completed.  Th e issue is whether the European Communities has 
conducted a risk assessment within the meani ng of Article 5.1 and Annex A(4) of the SPS Agreement .   
6.110  The Panel does not take a position on the science or  on how to evaluate da ta when a particular 
substance exhibits no threshold.277  However, whatever approach  the European Communities adopts 
in its assessment of the risks, it is obligated to co nduct a risk assessment that is consistent with the 
definition set forth in Annex A(4) of the SPS Agreement .  The Panel finds that the SPS Agreement  
requires an analysis that goes beyo nd the identification of a potential adverse effect.  The analysis 
must include an examination of the potential for that adverse affect to come into being, originate, or 
result from the presence of the specific substance under review in food, beverages, or feedstuffs, in 
this case oestradiol-17 β in meat and meat products derived fro m cattle treated with the hormone for 
growth promotion purposes.  The Pa nel will not prescribe a particular manner or approach for how the 
analysis should be conducted, but  the analysis must be conducted. 
6.111  The intervention by Dr. Sippell in paragra ph 576 of Annex G cited by the European 
Communities mentions a scientific study cited in the 1999 Opinion wh ich posits that the radioimmuno 
assays originally used to calculate daily endoge nous production levels of the hormones may have 
overestimated these levels.  The Panel addressed this issue by inserting in paragraph 7.507 quotations 
from the 1999 SCVPH Opinion on this issue directly, and a new paragraph 7.508. 
6.112  Additionally, the Panel felt that more direct quotation from the Opinions with respect to the 
other identified potential adverse effects would provide greater clarity.  Therefore, the Panel modified paragraphs 7.506  and 7.507. 
6.113  The European Communities also refers to a statement by Dr. Boobis at paragraph 725 of 
Annex G. 
278  The Panel has reviewed the surrounding para graphs and found that, like Dr. Guttenplan, 
Dr. Boobis had engaged in an exchange with th e European Communities about the concept of zero 
risk.  Again, Dr. Boobis confirms that science cannot provide absolute assu rance of the absence of 
risk or an absolute guarantee of safety.  Dr. Boobis  also states "it is not clear to me how you would 
ever conduct a risk assessment and guarantee that, w ithout ensuring zero exposure, and of course that 
would cease all use of all compounds where there is any risk whatsoever, and they all have some 
risk."279 
6.114  As with the citations to Dr. Guttenplan's statemen ts at the meeting with the Panel, the Panel is 
unclear what the European Commun ities believes this reference to certain statements by Dr. Boobis 
will add to the Panel's reasoning on whether it c onducted a risk assessment consistent with the 
definition set forth in Annex A(4) of the SPS Agreement .  The Panel notes again that the purpose of a 
risk assessment is to evaluate th e possibility that an identified a dverse effect comes into being, 
originates, or results from the pr esence of the identified additives,  contaminants, toxins or disease-
causing organisms in food, beverages or feedstuffs, not to guarantee that said possibility will be below 
a Member's appropriate level of protection or indeed will be zero.280   
                                                      
277 EC's comments on interim report, para. 78. Contra ry to the assertion of the European Communities, 
the Panel does not endorse any one particular way to approach risk assessment. 
278 Paragraph 725 is an interjection by Canada.  See transcript of the Panel meeting with the experts, 
Annex G, para. 725.   
279 Transcript of the Panel meeting with the experts, Annex G, paras. 723 and 729. 
280 The Panel notes that the Appellate Body in para. 186 of its report on EC – Hormones , asked "if a 
risk is not ascertainable, how does a Member ever know or demonstrate that it exists?"  WT/DS321/R 
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  6.115  The European Communities argues that in paragr aphs 7.525-7.534 the Panel relies solely on 
the responses of Drs. Boobis and Boisseau and does not reflect the opinions of the other experts.281 
6.116  The Panel notes that the relevant section is from paragraphs 7.520-7.540  and that the Panel 
cites Dr. Cogliano and Dr. Guttenplan in pa ragraph 7.536 and Dr. Guttenplan again in 
paragraph 7.537.  Nevertheless, the Panel has examin ed the written answers of the other experts to the 
same questions of the Panel as well as the transcript of the Panel meeting with the experts and made 
additional references to  experts' statements. 
6.117  The European Communities argues that the Panel is  in error in paragraph 7.538 when it states 
that the only study cited with respect to su sceptible populations was one having to do with in utero  
exposure to DES, which is banned in the United States.282  The Panel has reviewed the paragraphs in 
the 1999 Opinion referenced by the European Co mmunities.  Although the European Communities is 
correct that other studies regarding susceptible popul ations are referenced in section 2.2.2.4 entitled 
"Potential adverse effects of exogenous sex hor mones on growth and puberty upon exposure of 
prepubertal children," the Panel, in paragraph 7.53 8, was specifically referring to the link between 
cancer and consumption of hormone treated meat.  With  respect to that specific identified potential 
adverse effect, the only study mentioned in section 2.3.2.4 under susceptible populations with respect 
to oestrogen is one involving in utero  exposure to DES.  The Panel modified the third sentence of 
paragraph 7.538. 
6.118  Additionally, based on the European Communitie s' comment, the Panel also reviewed the 
paragraphs in the interim report wh ich dealt with section 2.2.2.4 of the 1999 Opinion.  In order to 
ensure that the Panel fully reflect s the science the European Communiti es relied upon in this section, 
the Panel amended paragraph 7.505. 
6.119  The European Communities argues with respect to paragraph 7.540  that, because the Panel 
based its findings on the views expressed by the "most convincing" experts,  the Panel has failed to 
make an objective assessment of the matter, failed to  take properly into account the totality of the 
available evidence and failed to give proper weight  to different scientific views which are based on 
genuine and legitimate scientific grounds.  The Eu ropean Communities also argues that the Panel's 
"most convincing" experts are the ones it ha d alleged had a conflict of interest.   
6.120  The Panel bases its analysis in this section on its  own reading of the plain language in the 
Opinions which was corroborated by the views expr essed by the experts and this combination leads 
the Panel to its conclusions.  Additionally, the Pa nel disagrees with the European Communities that it 
fails to examine the totality of the evidence or to give proper weight to  particular scientific views.  As 
the Panel notes, it does not disregard any of the statem ents by the experts.  However, the Panel could 
not possibly provide full quotations of every answer or  statement of every expert.  The fact that the 
Panel may have cited specific passages from speci fic experts does not mean that the Panel did not 
consider and weigh all of the responses.   
6.121  The Panel, after reading the Opinions, the expert s' answers to questions, the transcript of the 
meeting with the experts, and the parties submis sions and comments, made a determination about 
which experts had provided the Pane l with answers that responded to the questions asked in a clear 
and consistent manner supported by  expertise and evidence.  This determination is the essence of 
weighing the evidence.  As the Panel noted above , in paragraphs 7.520-7. 540, the section to which 
paragraph 7.540 belongs, th e Panel cited Dr. Boisseau, Dr. Boobis, Dr. Cogliano, and Dr. Guttenplan.  
These are the experts who answered the relevant qu estions and who had identified expertise in risk 
                                                      
281 EC's comments on interim report, footnote 11. 
282 EC's comments on interim report, footnote 11. WT/DS321/R 
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  assessment, toxicology, studies of carcinogens, and biochemistry.283  The Panel regrets if it caused 
any confusion by using the phrase "most convinc ing" and accordingly clarified paragraph 7.540.   
6.122  The European Communities fails to  see why the Panel, after having concluded that there is no 
risk assessment, goes on to examine whether the scien ce supports the conclusions in the Opinions and 
asks for more explanation than previously provided fo r.  The Panel modified paragraph 7.510 in order 
to provide additional explanation. 
(v) Comments on the Panel analysis regarding the other five hormonal substances 
6.123  The European Communities argues that paragra ph 7.583 is unclear and seems irrelevant for 
the further analysis of the Panel.  The European Co mmunities first argues that, in its oral statement, it 
spoke about whether a risk assessment can reach a definitive conclusion, not whether or not it is 
possible to perform a definitive risk assessment.  Firs t, the Panel recalls that the EC reference to a 
"definitive risk assessment" is found in the EC second written submission.284  Second, the Panel does 
not see any real difference between "reach[ing] a de finitive conclusion" and making a "definitive risk 
assessment".  Its reasoning in paragraph 7.583  thus applies equally to both statements.   
6.124  Second, the European Communities considers that the Panel should have referred to what the 
experts said at the hearing about the issue of whet her scientific data can ever allow for a definitive 
conclusion to be reached.  This seems to suggest that the European Communities no longer argues that 
what matters in order to justify the application of Ar ticle 5.7 is whether a definitive conclusion can be 
reached or whether a definitive ri sk assessment can be made. If this is correct, the Panel does not 
believe that it is entitled to address new argument s at the interim review stage.  The Panel 
nevertheless reviewed the comments of Dr. Cogliano  referred to by the Eu ropean Communities. In 
paragraph 776 of Annex G, Dr. Cogliano suggests that there can be different types of risk assessments, depending on the specificity of the risk one wishes to identify.  The Panel fails to see in 
what respect this statement affects its finding in paragraph 7.583.  As recalled by the Panel in its 
findings
285, the type of risk assessment requested under  Article 5.1 is a risk assessment within the 
meaning of Annex A(4) of the SPS Agreement , which is not one of the types of risk assessment 
identified by Dr. Cogliano.  It is in the context of the completion of a risk assessment within the 
meaning of Article 5.1 and Annex A(4) of the SPS Agreement  that the Panel discussed the EC 
argument regarding a "definitive risk assessment" or a "risk asse ssment reach[ing] a definitive 
conclusion".  The other comment of Dr. Cogliano referred to by the European Communities286 
suggests that data may be sufficient to do one type  of risk assessment (e.g. "the JECFA-style ADI") 
but not one based on a theory according to which it is not possible to identify a dose below which 
there is no risk, because there is a risk at an y dose level, even the low doses one might find in 
hormone-treated meat.  The Panel notes in this rega rd that this is different from arguing that one 
should be able to invoke Article 5.7 because one cannot make a "definitive risk assessment".  As 
mentioned by the Panel, the Appellate Body in Japan – Apples  did not say that relevant scientific 
evidence would become insufficien t if a Member could not perform a particular type of risk 
assessment, but only if it would be unable to perform a risk assessment within the meaning of 
Article 5.1 and Annex A(4) of the SPS Agreement . 
6.125  The Panel did not deem it necessary to delete or modify paragraph 7.583. 
6.126  The European Communities make s a general reference to its second written submission and 
takes issue with the assessment of th e Panel in paragr aphs 7.627-7.698  by stating that the Panel did 
                                                      
283 Transcript of the Panel meeting with the experts, Annex G, paras. 54-72.   
284 Inter alia  in paras. 137 and 143. 
285 See paras. 7.432-7.433. 
286 Annex G, para. 871.  WT/DS321/R 
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  not properly and fully examine the reasons contained in the Opinions and relied exclusively on certain 
statements of a minority of the experts it had chosen  to advise it, while ignoring pertinent statements 
of the other experts.  The Panel notes that it addressed the EC comments on its findings where they were directed at precise aspects of the interim report.  This was the case regarding comments on the Panel's reliance on the views expressed by some  of the experts it consulted and for comments 
regarding the existence of sufficient relevant scientific evidence. The Panel does not deem it 
necessary to address those issues in general terms here. 
6.127  The European Communities finds the Panel refere nce to a risk assessment "in substance" in 
paragraph 7.606 to be "entirely unclear".  In the opinion of the Panel, one can always follow each of 
the Codex steps provided for the gathering and analysis  of scientific evidence. However, in order to 
be a risk assessment within the meaning of Article 5.1, that exercise must reach scientific conclusions 
that are supported by the scientific evidence therein.
287  Thus, the possibility to complete a risk 
assessment depends on whether the relevant scientific  evidence is sufficient to support a conclusion 
on whether the identified adverse effect arises from, comes into being, or occurs as a result of the 
presence of the substance at issue in  food, beverages, or feedstuffs. 
6.128  The European Communities seems to suggest, in  substance, that whether a risk assessment 
can be completed depends on the level of protec tion chosen by a given Member.  The European 
Communities seems to link the conduct of the risk assessment with the desired outcome of a given 
SPS measure; i.e. to ensure zero risk.  The Panel believes that this is not what the SPS Agreement  
requires.  The Panel considers that the European Communities' interpretation is not supported by the 
text of Article 5.7, which only refers to the insuffi ciency of relevant scientific evidence.  There is no 
indication that this insufficiency is to be assessed in relation to the Member's level of protection.  
Otherwise the negotiators would have stated "in cases where relevant scientific evidence is 
insufficient in the light of the level of protecti on chosen by the Member adopting of maintaining a 
sanitary measure".  Nothing in the context of Ar ticle 5.7 suggests this interpretation either.  
Articles 2.2, 3.3 and 5.1 provide relevant contextual support for th e proposition that the purpose of the 
SPS Agreement was to ensure that Member's SPS measures are "objectively justified"288 by science.  
This purpose would be defeated if a Member could invoke Article 5.7 whenever relevant scientific 
evidence is insufficient to objectiv ely justify the type of measure that would achieve a particular 
desired level of protection.  The Panel modified pa ragraph 7.606 in order to clarify what it meant. 
6.129  Regarding paragraphs 7.608-7.615, the Eur opean Communities argues that the Panel's 
discussion does not do justice to the role genuine sci entific uncertainty plays in risk assessment.  It 
contests the Panel's exclusive reliance on the opinion s of Dr. Boisseau and Dr. Boobis and refers to 
statements by experts other than those quoted by the Panel.  As far as the Panel's reliance on 
Dr. Boisseau and Dr. Boobis is concerned, it should be recalled that this is a risk assessment issue and 
these two scientists were selected by the Panel inter alia  because of their expertise on risk assessment.  
Yet, Dr. Boisseau and Dr. Boobis were not the only ones with the same view.  Dr. Tritscher's remarks 
on the subject also support the Panel's conclusion.289 
6.130  None of the interventions of experts cited by the European Communities in its comments 
contradicts the conclusions reached by the Panel in its interim report, which are clearly spelled out in 
paragraph 7.615.  More particularly, none of Dr . Cogliano's statements cited by the European 
Communities contradicts the Panel.  In the pa ragraphs cited by the European Communities, 
Dr. Cogliano mainly explains the role of IARC and whether there is uncertainly about genotoxicity.  
Similarly, in the paragraphs cited by the Europ ean Communities, Dr. Guttenplan says that there is 
uncertainty about certain scientific issues, but he does not address the role of uncertainty in risk 
                                                      
287 Panel Report on Japan – Apples (Article 21.5 – US) , para. 8.136. 
288 Appellate Body Report on EC – Hormones , para. 190. 
289 Annex G, para. 348. WT/DS321/R 
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  assessment.  Dr. Sippell addresses an issue unrelated to risk assessment.  Dr. De Brabander addresses 
the quality of data and improved methods.  Regardi ng the alleged misinterpretation of some of the 
statements of Dr. Boobis on the existence or not of  genuine scientific uncertainty, it seems that the 
paragraph referred to by the European Communities (Annex G, paragraph 1049) deals with a different 
issue:  that of scientific uncertainty in relation to U-shaped dose-response curves, not how scientific 
uncertainty is treated in risk assessment. 
6.131  The European Communities argues, with respect to paragraph 7.622 , that the risk assessments 
performed by JECFA do not contain the specific evidence that the Panel allegedly found to be missing in the EC Opinions and, therefore, cannot constitu te proper risk assessments.  The Panel notes that 
there is no reference to the JECFA risk assessment of oestradiol-17 β in the Panel's analysis of the 
consistency of the European Communities' perman ent ban on meat and meat products derived from 
cattle treated with oestradiol-17 β for growth promotion purposes, because the European Communities 
claimed that it completed its own risk assessment for oestradiol-17 β.  The Panel thus conducted an 
analysis of the SCVPH Opinions and sought to de termine whether they complied with the definition 
of a risk assessment in Annex A(4) and whether th e science contained therein supported the European 
Communities' decision to institute a total ban.  Unlik e the analysis under Article 5.7, with respect to 
oestradiol-17 β the Panel was not trying to determine whether there was sufficient scientific 
information to conduct a risk assessment.  The Panel r ecalls that the fault it found with the Opinions 
was not that any particular piece of evidence was missing, but rather that the Opinions did not 
specifically analyse the risk of  the identified adverse effects arising from  the presence of 
oestradiol-17 β in food, beverages, or feedstuffs.  Th erefore, whether JECFA relied on the same 
evidence as the European Communities in  its analysis of oestradiol-17 β is irrelevant.  The Panel notes 
that JECFA did take into account the dose levels in  meat and meat products an d attempted to calculate 
the risk to humans from consuming typical amounts of meat.  JECFA used a series of assumptions 
regarding meat consumption, circula ting levels of oestrogen in the bl ood for various sub-groups of the 
population, etc.  The European Communities may very  well be right that there are other ways to 
analyse the risk than those JECFA utilized.  The Pa nel does not take a position on that issue.  What 
the Panel has said, is that such an analysis is  required by Article 5.1 and Annex A(4) of the 
SPS Agreement .  
6.132  With respect to the Panel's reference to the con cept of "critical mass" in paragraph 7.626, the 
European Communities request that we provide an explanation of where this criterion comes from and 
whether it is in conformity with th e findings of the Appellate Body in EC – Hormones . 
6.133  The Panel used the term "critical mass" in full knowledge of its meaning.
290  It used it in the 
sense of a situation where evidence becomes quan titatively and qualitatively sufficient to call into 
question the fundamental precepts of previous know ledge and evidence.  The Panel does not mean 
that there must be sufficient evid ence to perform a new risk assessment.   Otherwise, Article 5.7 of the 
SPS Agreement  would become meaningless.  It used the term "critical mass" very much in its 
common scientific usage, i.e. the new scientific info rmation and evidence must be such that they are 
at the origin  of a change in the understanding of a scientific  issue.  We do not see in what respect this 
approach by the Panel, which applies to the speci fic situation in this case (i.e. one where a party 
alleges that previously sufficient scientific evidence has become insuffi cient) would be contrary to the 
findings of the Appellate Body in EC – Hormones.    
                                                      
290 In mathematics and physics "critical" is defined as  "constituting or relating to a point of transition 
from one state, etc. to another.  "C ritical size" or "critical mass" are de fined as the minimum size or mass of a 
body of a given fissile material which is capable of sustaining a nuclear chain reaction (Shorter Oxford English 
Dictionary, 5th edition (1993), p. 558). In other words, the Pane l assessed whether it had been provided with the 
minimum evidence necessary to conclude that knowledge has become quantitatively and qualitatively sufficient 
to call into question the fundamental precepts of previous knowledge and evidence.  WT/DS321/R 
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  6.134  The European Communities takes issue with paragraph 7.640.  The European Communities 
contests the Panel's approach in defining a list of general issues common to all five hormones.  The 
European Communities argues that it  has identified exactly, for each hormonal substance, the sections 
in the 1999 Opinion that deals i ndividually with that substance a nd suggests that the Panel's list of 
"general issues" common to all five hormones is arbitrary. 
6.135  The Panel first recalls that, as a general principle, panels are free to structure the order of their 
analysis as they see fit.291  The Panel does not deny that the EC Opinions addressed each hormone 
individually.  However, as explained in paragraphs  7.637-7.639, some issues were common to all five 
hormones and the evidence provided was not always su fficiently specific to address a particular issue 
in relation to each hormone individually. The Panel modified paragraphs 7.62 9-7.640 and the title to 
Section VII.C.3.(f)(vi) to reflect the fact that wh at is discussed are issues common to all hormones for 
which hormone-specific evidence was not provided. 
6.136  The Panel also clarified that certain insuffici encies identified in the EC Opinions had not as 
such been discussed by the Europ ean Communities in its submissions.  The Panel concluded that the 
European Communities was not arguing that these pa rticular insufficiencies were what made it 
impossible to complete a risk assessment.  Ther efore, the Panel decided not to address these 
insufficiencies.  This may have prompted the EC comment that the Panel analysis on the individual 
hormonal substances in paragraphs 7.699-7.816 was incomplete.  The clarification brought by the 
Panel demonstrates that it did not draw a random lis t of issues common to all hormones and explains 
the reasons why a more limited number of issues was discussed compared with what had been 
identified in the Opinions.  The Pa nel has also clarified this point in the sections relating to each 
hormone individually and did not fo llow the request of the European  Communities that it address each 
and every issue of insufficien cy raised in the Opinions.292  
6.137  The European Communities contests the c onclusions of the Panel in paragraph  7.642 , 
footnote 739  as inaccurate, but without specifying why.  In that footnote, the Panel refers to a new 
method and new assays to detect small amounts of ho rmones in meat, mentioned in the 2002 Opinion. 
From what is mentioned in the 2002 Opinion, the studies were on the subject of hormone levels in 
meat, not in people.  Whereas it might be possible to apply these method and assays to detect 
endogenous levels of hormones in humans, the Eu ropean Communities does not argue this in its 
comments, and this is not what the method and assays  are about.  It also app ears that, according to the 
2002 Opinion, the method and assays mentioned were  not exactly successful or trustworthy. The 
conclusion in section 4.1.1 of the 2002 Opinion, where the new met hod is discussed, reads: "[D]espite 
a number of positive analytical results in this study, the low number of samples does not allow a 
qualified validation of typical characteristics such as sensitivity, specificity, accuracy and 
reproductibility." (2002 Opinion, page 9). The c onclusion of section 4.1.2, where the bioassays are 
discussed, is that: " [T]he obtained results suggest that the use of recombinant yeast and rainbow trout hepatocytes to detect oestrogenic compounds is not justified in view of their lack of sensitivity". 
(2002 Opinion, page 9).  It seems that, even if they  were relevant in the c ontext of paragraph 7.642 
this new method and assays do not contribute to a critical mass of evidence that would put into 
question existing knowledge.  The Panel,  therefore, did not modify footnote  739. 
6.138  With respect to paragraphs 7.644-7.647, th e European Communities argues that the Panel 
reduces the discussion to only two quot ations and draws a conclusion th at is not based on the debate 
with the experts at the hearing.  The European Communities argues that "much more was said about 
this issue" at that hearing.
293  The Panel notes, however, that the discussion related to the sensitivity of 
children to hormones in general, without drawing an y direct link with any of the five hormones at 
                                                      
291 Appellate Body Report on Canada – Wheat Exports and Grain Imports , para. 126. 
292 EC's comments on Sections VII.C.3(f)(vii), (viii), (ix), (x), (xi). 
293 Annex G, para. 561 et seq . WT/DS321/R 
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  issue in this section, and to the validation of met hods, particularly of the new ultrasensitive assay (the 
"Klein" methodology).  The only hormone expr essly discussed in relation to this assay was 
oestradiol-17 β.  The Panel notes that it concludes in this section that (a) the studies using the new 
ultrasensitive assay were limited to oestradiol-17 β; and (b) that the ultrasensitive assay had not been 
validated.  Thus, the  Panel does not agree with th e European Communities that its conclusions are not 
based on the debate referred to above.   
6.139  The European Communities requests that we clar ify the first sentence in paragraph 7.647.  
More particularly, the European Communities requ ests that we specify whether this is a legal 
argument or a scientific argument.  The Panel consid ers that the finding that the evidence relates only 
to oestradiol is not an argument but a factual cons ideration.  The Panel considers that, since the new 
detection method measured oestradiol only294 and since no evidence was pr ovided that suggested that 
extrapolation had been made or could be made to  other hormones, the evidence is insufficient to 
conclude, with respect to the five hormones subj ect to a provisional ban under Article 5.7 of the 
SPS Agreement , that existing knowledge has been put into question. 
6.140  With respect to the EC comment on the second sentence of paragraph 7.647, the Panel 
confirms that, indeed, its understanding is that th e ultrasensitive detection method used by Klein and 
subsequently relates only to oestradiol and has not  been validated.  This has been confirmed by 
Dr. Boobis at the hearing.295  As a result, the Panel cannot c onclude that existing knowledge and 
evidence have been put into questio n by the results of the ultrasen sitive assay with regard to the 
impact of the five hormones on prepubertal chil dren if the available evidence relates only to 
oestradiol. 
6.141  Even if the ultrasensitive assay had been validated  and had demonstrated lower levels of the 
five hormones at issue in this section – and not only oestradiol – in sensitive populations, the Panel 
notes that the 1999 Opinion itself states that "[A] corollary is that perhap s the hormones residues in 
beef, which are also low and which have also been  determined by RIA are equally variable and over 
representative of the actual hormone concentrations."296 
6.142  In its comments regarding paragraphs 7.649-7.652  the European Communities considers that 
the Panel's approach to the issue of dose response is flawed and circular. 
6.143  The European Communities bases its contention th at the Panel's reasoning is circular on the 
assumption that the Panel rejected the EC approach  based on an absence of a dose response analysis.  
Even though it rejected that approach in  this particular case for oestradiol-17 β, the Panel did not 
exclude that there could be situations where dose response would not apply.  The Panel believes, on 
the contrary, that it is the European Communities that is making contradictory arguments. The European Communities cannot argue that "the Appella te Body clearly judged that a risk assessment 
[could] be either qualitative or quantitative"
297 and that a dose response is not required  in order to 
complete a risk assessment and, at the same time, ar gue for the five hormones at issue that relevant 
scientific evidence is insufficient to perform a risk assessment because the data available do not allow 
a dose response assessment.  Yet, this is what app ears to be concluded in the 1999 Opinion as far as 
the five hormones are concerned.  The Panel none theless clarified the paragraphs at issue.   
6.144  The European Communities argues that, in pa ragraph 7.654, the Panel declines to discuss 
bioavailability on the basis that the studies relied upon by the European Communities do not relate to the five hormones in question, but only to oestradiol and that there is no indication that the 
                                                     
 
294 See para. 7.645 quoting Dr. Sippell. See, also, Dr. Sippell's statement in Annex G, para. 588. 
295 Annex G, para. 572. 
296 1999 Opinion, section 3.2, p. 30. 
297 See EC's reply to question 26 of the first series of questions of the Panel, para. 153, Annex B.  WT/DS321/R 
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  conclusions can be applied to hormones other than  oestrogens.  The European Communities considers 
that this assertion by the Panel is without foundation. 
6.145  In order to reach its conclusion, the Panel examin ed most particularly the portions of the 1999 
and 2002 Opinions quoted by the European Communities in its reply to question 28 of the questions of the Panel after the first substantive meeting
298 and in its second written submission.299  The two 
extracts quoted by the European Communities addr ess only oestradiol, while making references to 
oestrogens.  Furthermore, the extract of the 199 9 Opinion quoted by the European Communities is 
part of the section of the Opinion regarding oestradiol.  The Panel notes that the European Communities argued that "similar findings [had been] made for all the other five hormones."
300 
However, the European Communities did not specify  where such findings had been made.  This 
allegation has to be considered in relation to th e comments of the experts.  The Panel nonetheless 
deemed it necessary to clarify the section on bioavailability. 
6.146  In its comments on the interim report, the Europ ean Communities also refers to the experts' 
replies to question 43.  The Panel first notes that th is question concerns bioavailability in general, not 
the sufficiency of evidence regarding bioavailabili ty.  The Panel has included quotations of the 
relevant passages of the experts' replies in its findings.  The Eur opean Communities also refers to 
paragraphs 132 et seq.  of the transcript of the hearing (Annex G).  The Panel reviewed the comments 
of the experts on bioavailability and found that t hose comments address neither the bioavailability of 
the five hormones at issue, nor the sufficien cy or insufficiency of evidence on it.   
6.147  With respect to paragraphs 7.662 to 7.677, the European Communities argues first that the 
discussion on long latency of cancer and confounding f actors should have been in the Panel's analysis 
under Article 5.1 of the SPS Agreement .  We note that the Panel addressed this question to the extent 
this was necessary for its analysis under Article 5.1.   The question of the latency period of cancer and 
of the epidemiological survey of  the occurrence of cancer in various populations was addressed in 
paragraphs 7.535  et seq.   The Panel also deemed it necessary to address the latency of cancer in its 
section under Article 5.7 because the European Comm unities argued that the long latency period of 
cancer made it impossible to demonstrate positively th e existence of clear harm in relation to the 
hormones at issue.  The Panel first determined wh ether long latency of cancer was relevant for the 
performance of a risk assessment for the hormones at issue.  It then proceeded to determine whether 
relevant scientific evidence in relation to the latenc y of cancer was insufficient to the point of making 
it impossible to perform a risk assessment within th e meaning of Article 5.1 and Annex A(4) of the 
SPS Agreement .  In order to do this, it assessed whether it could be considered that a "critical mass" of 
new information or evidence was now available wh ich could unsettle the way long latency of cancer 
has been taken into account in risk assessment so far.  The Panel clarified the part of 
Section VII.C.3.(f)(vi) dealing with long latency of cancer and confounding factors in order to better 
present its analysis.  
6.148  The European Communities also  argues that the section on long latency of cancer and 
confounding factors is evidence that we applied a "double standard" of evid ence for the removal as 
compared to the approval of the hormones at issue.  We did not argue that JECFA or the respondent 
performed the epidemiological studi es necessary to demonstrate an absen ce of long term effect of the 
hormones at issue in terms of cancer.  We not e that the long latency of cancer has been 
acknowledged.  We also note that confounding factors make it difficult to assign a particular cancer to 
specific circumstances of ingestion of hormone resi dues.  We recall that JECFA's risk assessments 
take into account the long latency of cancer thr ough the ADI.  To the extent that the European 
                                                      
298 Annex B-1, paras. 155-159. 
299 Paras. 131-166. 
300 EC's reply to question 28 of the questions of the Panel after the first substantive meeting, 
Annex B-1, para. 158. WT/DS321/R 
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  Communities disagrees with the approach followed by  JECFA, it is for the European Communities to 
provide a "critical mass" of evidence – not a "posi tive evidence" – that this approach is no longer 
valid.301  We conclude that, in these proceedings, the European Communities has not pointed at 
evidence suggesting that long latency of cancer h as not been appropriately taken into account in 
existing risk assessments. 
6.149  The European Communities also takes issue with the Panel's discussion on the immunological 
effect of the five hormones in paragraphs  7.678-7.685.  The European Communities seems to raise 
two issues in its comments.  The first one is relate d to the question of whether a threshold approach 
must be followed.  The second one is whether the Pa nel dismissed the EC arguments on the basis that 
the scientific evidence relates to oestrogens only. 
6.150  Regarding the first issue, the Panel notes that  all three experts who answered question 59302 
stated that there is no evidence of effects on th e immune system from doses such as those resulting 
from consumption of meat from treated animals.  If the point the Europ ean Communities wishes to 
make in its comments is that the approach based on a "threshold" is not required to assess the effect of 
the five hormones at issue on the immune system, th en the Panel fails to unde rstand why, under those 
circumstances, the relevant scientific evidence on the effect of the five hormones on the immune 
system is insufficient for the European Communities to perform a risk assessme nt for those hormones.  
6.151  With respect to the second issue, the Panel notes that Dr. Boobis and Dr. Guttenplan address 
the effect of oestrogen/oestradiol on the immune system (Dr. Boobis refers to "hormones such as 
oestradiol").  As the Panel mentions in paragraph 7.681, the main reason for dismissing the EC arguments on insufficiency of evid ence regarding the effect of hormones on the immune system is the 
fact that the evidence made available to the Panel re lates exclusively to the effect of oestrogens.  The 
European Communities has not identified any eviden ce that specifically addresses any of the five 
hormones at issue in this section.  The European Communities has not explained either to the Panel 
why it thinks the evidence on oestrogens would be relevant for the other hormones.  The Panel notes in this respect that the Opinions do not identify an y evidence with respect to the five hormones that 
residue levels in meat might have an effect on the immune system.  The Panel nonetheless clarified 
paragraphs 7.683-7.684. 
6.152  Regarding paragraphs 7.686-7.698, the Europ ean Communities argues that the Panel quotes 
Dr. Sippell as identifying adverse effects, but does not discuss his statement.  The European 
Communities adds that there is also no discussion of  the other experts' views put forward at the 
hearing. 
6.153  Regarding Dr. Sippell's statement in paragra ph 7.691, the Panel has further discussed the 
points raised by the experts on this matt er in paragraphs 7.692 through 7.698. 
6.154  With respect to paragraphs 7.674 to 7.687 of  the interim report, the European Communities 
argues that the Panel's discussion of the potential misuse and abuse in the administration of hormones is in the wrong place, to the extent that this is an  aspect of risk assessment, in the sense of Article 5.1 
to 5.3 of the SPS Agreement , that is applicable across all iden tified potential risks and for all six 
hormones.  The Panel agrees with the European Communities that the question of misuse and abuse in 
the administration of hormones may apply to all six hormones at issue and is an element that can be 
taken into account in risk assessment, as set forth in Article 5.2 of the SPS Agreement  and confirmed 
by the Appellate Body in EC – Hormones .  However, the Panel did not deem it necessary to address 
this question in the section regarding the conform ity with Article 5.1 of the definitive ban on 
                                                     
 
301 In this respect, the Panel inserted a footnote in para. 7.626  to address the EC argument on standard 
of proof. 
302 Annex D, paras. 443-448.  WT/DS321/R 
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  oestradiol-17 β, to the extent that the question whether misu se or abuse exists in the administration of 
hormones did not have an impact on the issues addr essed by the Panel under Article 5.1. Indeed, the 
question of misuse or abuse in the administration of hor mones is relevant to the extent that it can lead 
to higher concentrations of hormone residues in meat and meat products than would occur if good 
veterinary practices are applied.  As stated by the 1999 Opinion, it is an aspect of exposure 
assessment.  In this case, the Panel found that  the European Communities had not evaluated 
specifically the possibility that the a dverse effect that it had identified in its risk assessment come into 
being, originate, or result from the consumption of meat or meat products which contain veterinary 
residues of oestradiol-17 β as a result of the cattle being treated with this hormone for growth 
promotion purposes.  Therefore, whether the concentrations of hormone residues in meat and meat products could be higher as a result of misuse or ab use did not have to be addressed.  The Panel does 
not deem it necessary to move this secti on to another part of its findings. 
6.155  Having regard to the point made by the Europ ean Communities that misuse and abuse in the 
administration of hormones is an aspect of risk asse ssment within the meaning of Article 5.1 to 5.3, 
the Panel reflected further on whether this issue re lated at all to the question of insufficiency of 
relevant scientific evidence under Article 5.7.  In the view of the Panel, the question of whether 
JECFA properly took into account misuse and abuse in  its risk assessments is irrelevant to the 
question whether the European Communities can ta ke this matter into account in its own risk 
assessment, since it has full discretion to do so pursuan t Article 5.2 and to the Appellate Body finding 
in EC – Hormones .  In that context, whether evidence exists  of misuse or abuse in the administration 
of hormones is not as such a scientific issue likely to make a risk assessment within the meaning of 
Article 5.1 and Annex A(4) of the SPS Agreement  impossible. 
6.156  For these reasons, the Panel decided to delete th e section regarding misuse or abuse in the 
administration of hormones from its fina l report and modified paragraph 7.578. 
6.157  The European Communities argues that the Panel' s analysis on the issue of carcinogenicity of 
progesterone in Section VII.C.3(f)(vii) is flawed .  However, the European Communities does not 
explain specifically in what respect it is flawed.  The Panel therefore did not modify its reasoning. 
6.158  The European Communities argues that the Panel' s analysis on the issue of carcinogenicity 
and genotoxicity of testosterone in Section VII. C.3(f)(viii) is clearly incorrect and flawed. The 
European Communities refers to a statement by Dr . Tritscher allegedly admitting that JECFA found 
that there was scientific uncertainty about genotoxicity of testosterone.
303  The Panel consulted the 
transcript and noted that Dr. Tritcher discussed the genot oxicity of oestradiol, not that of testosterone.  
She did say that "all information is being looked  at, in particular with compounds that have a 
genotoxic potential", but she did not mention that progesterone had a genotoxic potential. 
6.159  The European Communities argues that the approach  and analysis of the Panel on the issue of 
metabolism and carcinogenicity of trenbolone acet ate in Section VII.C.3(f)(ix) is flawed, inter alia , 
because JECFA's assessment defended by Dr. Boobi s and Dr. Boisseau dates back to 1988 and is 
clearly outdated.  The Panel has already discussed th is argument and considers that a risk assessment 
does not become invalid merely because it is "old".  The Panel believes that, in order to demonstrate 
that a risk assessment is "outdated", a party must pr ovide studies showing that the data on which the 
risk assessment is based are no longer valid. 
6.160  The European Communities argues that the reasoning of the Panel regarding carcinogenicity 
of zeranol is flawed, inter alia , because if the extrapolation to meat consumption mentioned by 
Dr. Guttenplan was necessary, as the Panel seems to  require in paragraph 7.783, this would have 
amounted to a complete risk assessment in the sense of Article 5.1 of the SPS Agreement .  The 
                                                      
303 Statement of Dr. Tritcher, Annex G, para. 463. WT/DS321/R 
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  European Communities argues that this is not the releva nt standard in the context of Article 5.7.  We 
agree with the European Communities that being able  to perform a risk assessment compatible with 
Article 5.1 is not the standard applicable in the cont ext of Article 5.7 and we do not consider that we 
applied any such standard in this case.  Indeed, the reason why the Panel paraphrased 
Dr.  Guttenplan's statement was not to say that the European Communities could demonstrate that 
relevant scientific evidence was insufficient only if it  were able to extrapolate some genotoxic effect 
of zeranol to meat consumption.  The point that th e Panel wanted to make was that the extrapolation 
of the study commented by Dr. Guttenplan woul d have entailed, according to Dr. Guttenplan, a 
"myriad of uncertainties".  As a result, this stud y could hardly serve as a basis to put in question 
existing knowledge.  We clarif ied this in paragraph 7.783. 
6.161  As regards the alleged application of a similar standard in paragraphs 7.787-7.788, the Panel 
recalls that what has to be demonstrated for Article  5.7 to apply is that no risk assessment within the 
meaning of Article 5.1 and Annex A(4) of the SPS Agreement  can be performed.  Our reference to 
Dr. Guttenplan means that we consider, as mentioned in paragraph 7.615, that not just any form of 
scientific uncertainty can justify a recourse to Article 5.7.  As previously noted, we consider that when 
scientific evidence has been  sufficient, it may only be considered as insufficient if a critical mass of 
scientific information and evidence exists, in terms of quantity and quality, to put into question 
existing knowledge and evidence.  We therefor e did not consider it necessary to modify our 
reasoning. 
6.162  In paragraph 7.798, the European Communities expresses its disagreement with the Panel's 
approach consisting of applying a presumption of conformity with the SPS Agreement  to JECFA's risk 
assessment on melengestrol acetate (MGA), even t hough that risk assessment has not yet been 
endorsed by Codex.  The Panel has explained in  paragraph 7.799 why some degree of relevance 
should be given to JECFA's work, even though it is not formally a "standard, guideline or 
recommendation" within the meaning of Article 3.2 of the SPS Agreement .  The Panel also notes that 
the European Communities does not sp ecify in which respect the Panel's analysis of the issue of the 
residue data used by JECFA on carcinogenicity is fl awed, except for suggesting that the residue data 
is "outdated", a question already addressed by  the Panel in paragraphs 7.800-7.803.   
6.163  Finally, the European Communities requests the Pa nel to clarify the meaning and extent of its 
conclusion in paragraph 7.823.  Th is paragraph simply states that, because relevant scientific evidence 
is not insufficient, the European Communities cannot invoke Article 5.7.  The corollary is that the 
European Communities should be able to complete a risk assessment under Article 5.1.  The European 
Communities argues that the Panel should clarify fu rther how the risk assessment could be completed 
in the presence of the gaps identified in the EC Opinions with respect to oestradiol-17 β.  The gaps 
identified in the EC Opinions for oestradiol-17 β are: 
(a) that the European Communities has not eval uated specifically the possibility of the 
adverse effects related to the association between excess hormones and neurobiological, developmen tal, reproductive and immunological effects, as well as 
immunotoxicity, genotoxicity and carcinogenici ty coming into being, originating or 
resulting from the consumption of meat or meat products which contain veterinary 
residues of oestradiol-17 β as a result of the cattle being treated with this hormone for 
growth promotion purposes; 
(b)
 The scientific evidence referred to in th e Opinions does not support the European 
Communities' conclusions on  genotoxicity, or the conclusion that the presence of 
residues of oestradiol-17 β in meat and meat products as a result of cattle being treated 
with the hormone for growth promotion pur poses leads to increased cancer risk.  The 
scientific evidence does not support the EC conclusions on the adverse  WT/DS321/R 
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  immunological and developmental effects of consuming meat and meat products 
from cattle treated with oestradiol-17 β for growth promotion purposes. 
6.164  Thus, the problems identified by the Panel are not  related to the fact that a risk assessment 
cannot be performed, but rather that the Europ ean Communities did not conduct a risk assessment 
pursuant to Article 5.1 and Annex A(4) and th at the scientific evidence did not support the 
conclusions which the European Communities re ached.  The European Communities' comment 
apparently underlines an approach to risk assessment that seems to consist of identifying a risk from a 
particular substance and if there is any possib ility, no matter how remote, of that risk occurring 
because of that substance, deciding that there is no need to further study whether the risk could arise 
from the levels of that substance found in food , beverages, or feedstuffs.  As discussed in 
paragraph 6.107 above, the purpose of a risk assessm ent under Article 5.1 and Annex A(4) is not to 
provide guarantees that risks will be below a particul ar appropriate level of protection or even zero, 
but to objectively determine the possibility for the risk to arise from the presence of the substance 
under review in food, beverages, or feedstuffs.  The Panel therefore, does not believe that the 
European Communities' approach to  risk assessment, whereby the desired level of protection informs 
the risk assessment rather than the risk assessment providing objec tive data to be utilized by a 
government in determining how to achieve its appropri ate level of protection, is consistent with the 
object and purpose of Article 5 of the SPS Agreement.   
(b) Comments by Canada 
6.165  Canada points out that the first sentence of paragraph 7.509 states that "the European 
Communities has assessed  the general risk  of the identified potential adverse health effects ..." 
(emphasis added).  Canada requests, given th e specific definition of risk assessment in the 
SPS Agreement , that the Panel replace the phrase "has assessed  the general risk" with the phrase "has 
identified a hazard in relation to".304  The European Communities, in its comments of 19 October 
2007305, argues that the Appellate Body has already found, in EC – Hormones , that the EC risk 
assessment at that time had indeed shown the "existence of a general risk of cancer".306 
6.166  Considering that it was necessary to ensure  clarity, the Panel decided to modify 
paragraph 7.509.  However, the Panel will not use the term "has identified a hazard in relation to" as 
this too has very specific meanings as set fort h in the Codex Procedural Manual and cited in 
paragraph 7.437.  Instead, it will modify paragraph 7.509 to read: 
"All of the statements of the experts, a nd indeed statements from the Opinions, 
indicate that the European Communities has evaluated the potential for the identified 
adverse effects to be associated with oest rogens in general, but has not provided 
analysis of the potential for these effects to arise from consumption of meat and meat products which contain residues of oestradiol-17 β as a result of the cattle they are 
derived from being treated with the hor mone for growth promotion purposes." 
6.167  The Panel also considers this correction to be in  line with the finding of the Appellate Body in 
paragraph 200 of its report on EC – Hormones  referred to above by the European Communities. 
6.168  Canada also requests that we replace, in para graph 7.842(a), the phrase "to the extent that" by 
the term "because". The Panel does not deem it appr opriate to accept Canada's suggestion since the 
reason for the violation of Article 22.8 in this case is only one of the reasons that can lead to a violation of that Article. 
                                                     
 
304 Canada's comments on interim report, p. 4. 
305 Para. 23. 
306 Appellate Body Report on EC – Hormones , para. 200.