WORLD TRADE  
ORGANIZATION  WT/DS392/R 
29 September 2010 
 (10-4731) 
 Original:   English 
  
 
     
 
UNITED STATES – CERTAI N MEASURES AFFECTING 
IMPORTS OF POULTRY FROM CHINA 
 
 
Report of the Panel 
 
  WT/DS392/R 
 Page i 
 
 
  TABLE OF CONTENTS 
Page  
I. INTRODUCTION ................................................................................................................... .1 
II. FACTUAL ASPECTS ..............................................................................................................2  
A. BACKGROUND .............................................................................................................................2  
B. THE MEASURE AT ISSUE ..............................................................................................................2  
C. THE UNITED  STATES ' REGIME FOR THE IMPORTATION OF POULTRY ..........................................3  
1. First Stage: Initial equivalence determination .......................................................................4  
(a) Document review................................................................................................................ ........5  
(b) On-site audit.................................................................................................................. ..............5  
(c) Publication in the Federal Register ............................................................................................ .5 
2. Second Stage: Certification of establishments  for export by the eligible exporting 
country ........................................................................................................................ ...............5  
3. Third Stage: Ongoing equi valence verification......................................................................6  
D. CHINA 'S REQUEST FOR EQUIVALENCE .........................................................................................6  
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS.........................9  
IV. ARGUMENTS OF THE PARTIES ......................................................................................10  
A. EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF CHINA ...................................10  
1. Introduction................................................................................................................... ..........10  
2. The measures at issue .......................................................................................................... ...10 
(a) Section 727 of the Agriculture Appropriations Act 2009 .........................................................10  
(b) Ongoing moratorium on the establishment or implementation of authorization for the 
importation of poultry products from China.............................................................................11  
3. US regulations and procedures applicable to the authorization of poultry products ....................................................................................................................... ............11
 
(a) US regulations and procedures .................................................................................................1 1 
(b) Application of procedures before  and after the moratorium.....................................................12  
(i) China.......................................................................................................................... ...............12  
(ii) All other WT O Members .......................................................................................................... .12 
4. Legal analysis and argument .................................................................................................12  
(a) Section 727 and the moratorium each violate Article I:1 of GATT 1994.................................12  
(b) Section 727 and the moratorium each violate Article XI:1 of GATT 1994..............................13  
(c) Section 727 and the moratorium each violate Article 4.2 of the Agreement on 
Agriculture ............................................................................................................................... .13 
(d) Claims under the Agreement on the Application of Sanitary and Phytosanitary 
Measures ............................................................................................................................... ....13  
(i) To the extent they are SPS measures, the meas ures are inconsistent with Article 2.3 of 
the SPS Agreement.............................................................................................................. ......13  WT/DS392/R 
Page ii  
 
  (ii)
 To the extent they are SPS measures, the meas ures are inconsistent with Article 5.5 of 
the SPS Agreement.............................................................................................................. ......14  
(iii) To the extent they are SPS measures, the me asures are inconsistent with Article 5.1 
and 5.2 of the SPS Agreement................................................................................................... 14 
(iv) To the extent they are SPS measures, the meas ures are inconsistent with Article 2.2 of 
the SPS Agreement.............................................................................................................. ......15  
(v) To the extent they are SPS measures, the meas ures are inconsistent with Article 5.6 of 
the SPS Agreement.............................................................................................................. ......15  
(vi) To the extent they are SPS measures, the meas ures are inconsistent with Article 8 of 
the SPS Agreement.............................................................................................................. ......15  
5. The US Preliminary Ruling Request must fail, as consultations pursuant to the 
SPS Agreement  were requested and held ..............................................................................16  
(a) China's consultations request clearly invoked Article 11 of the SPS Agreement .....................16  
(b) Pursuant to its consultations request, China actually consulted regarding the 
SPS Agreement , and in a manner fully consistent  with Article 4 of the DSU ..........................16  
B. EXECUTIVE SUMMARY OF THE FIRS T WRITTEN SUBMISSION OF THE UNITED  STATES .............17  
1. Introduction................................................................................................................... ..........17  
2. Section 727 is the only measure at issue in this dispute.......................................................18  
3. China mischaracterizes the legal effect of  Section 727 in US domestic law.......................19  
4. Of the three claims presented by China,  the Panel need only consider the claim 
under Article XI of the GATT 1994 ......................................................................................20  
5. Section 727 is justified pursuant to GATT Article XX(b)...................................................21  
6. China has not made a prima facie case in support of its claims under the SPS Agreement .........................................................................................................................25
 
7. Reply to China's response and third party comments on US Preliminary Ruling 
request of 1 October........................................................................................................... .....25  
C. EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF CHINA AT THE FIRST 
SUBSTANTIVE MEETING OF THE PANEL .....................................................................................26  
1. Introduction and background................................................................................................26  
2. Section 727 of the Agriculture Appropriations Act 2009 ....................................................27  
(a) Section 727 is inconsistent with  Articles 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, and 8 of the  
SPS Agreement ..........................................................................................................................27  
(i) Relationship between the SPS Ag reement and GATT Article XX(b).........................................27  
(ii) Section 727 is inconsistent with Artic les 5.5 and 2.3 of the SPS Agreement ............................27  
(iii) Section 727 is inconsistent with Articles 2.2, 5.1, and 5.2 of the SPS Agreement ....................28  
(iv) Section 727 is inconsistent with Article 5.6 of the SPS Agreement...........................................28  
(v) Section 727 is inconsistent with Article 8 of the SPS Agreement..............................................28  
(b) Section 727 is inconsistent w ith Article I:1 of GATT 1994 .....................................................28  
(c) The United States concedes that Section 727 is inconsistent with GATT Article XI:1 
and Article 4.2 of the Agreement on Agriculture ......................................................................29   WT/DS392/R 
 Page iii 
 
 
  (d) Inconsistency of Section 727 with GATT 1994  and the Agreement on Agriculture  
cannot be justified on the basis of GATT Article XX(b)..........................................................29  
(i) Section 727 is not "necessary" within  the meaning of GATT Article XX(b) .............................29  
(ii) Section 727 does not comply with the chapeau  of GATT Article XX ........................................30  
3. Section 743 of the Agriculture Appropriations Act of 2010................................................30  
4. Request for enhanced third party rights...............................................................................30  
D. EXECUTIVE SUMMARY OF THE CLOSING STATEMENT OF CHINA AT THE FIRST 
SUBSTANTIVE MEETING OF THE PANEL .....................................................................................30  
E. EXECUTIVE SUMMARY OF THE ORAL STATEMENT OF THE UNITED  STATES AT THE 
FIRST SUBSTANTIVE MEETING OF THE PANEL ...........................................................................34  
F. EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF CHINA ...............................39  
1. Introduction and summary ....................................................................................................39  
2. The United States cannot sustain its argument that China and the United States 
did not consult under the SPS Agreement .............................................................................39  
3. China has established prima facie claims under Articles I:1 and XI:1 of 
GATT 1994  and the Agreement on Agriculture ....................................................................40  
(a) China's claims under Article I:1 of GATT 1994.......................................................................40  
(b) China's claims under Article  XI:1 of GATT 1994....................................................................40  
(c) China maintains its claim under Article 4.2 of the Agreement on Agriculture .........................40  
4. The United States has not established that Section 727 falls within the exception 
under Article XX(b) of GATT 1994 ......................................................................................40  
(a) Introduction................................................................................................................... ............40  
(i) Section 727 is not "necessary" to the pr otection of human life and health under 
paragraph (b) of  Article XX.................................................................................................... ..40 
(ii) Section 727 does not fulfil the requirements of the chapeau  to Article XX ...............................41  
(b) Various US Arguments related to its Ar ticle XX(b) defence are unsupported by the 
evidence and legally erroneous................................................................................................. 41 
(i) China did not  have access to normal PPIA/FSIS pro cedures, by the explicit terms of 
Section 727 and its predecessor................................................................................................ 41 
(ii) Section 727 was not necessary because there were no "imminent" imports of Chinese 
poultry at the time it was enacted ............................................................................................. 42 
(iii) FSIS equivalence procedures for poultry a re not inherently more risky for human life 
and health than non-equivalence sa fety and inspection procedures ........................................43  
(iv) US arguments alleging a fear of a breach of APHIS Regulations and avian influenza 
do not support a conclusion t hat Section 727 is necessary.......................................................43  
(v) The United States references anecdotal news  reports on eggs and animal feed, but 
provides no evidence of food safety prob lems related to processed poultry.............................44  
(vi) The United States fails to demonstrate that china is different than all other countries 
in a manner that justifies ar bitrary discrimination...................................................................44  
Pool of countries to assess whet her "same conditio ns" prevail ............................................................... 44  WT/DS392/R 
Page iv  
 
  Issue of "imminent" imports  of Chinese poultry ................................................................................. .... 45 
Applicability of US – Shrimp .................................................................................................................. 45  
Poultry risk factors in countries seekin g to export poultry to the United States...................................... 45  
5. China's claims under the SPS Agreement .............................................................................46  
G. EXECUTIVE SUMMARY OF THE SEC OND WRITTEN SUBMISSION OF THE UNITED  STATES .........46  
1. Introduction................................................................................................................... ..........46  
2. Section 727 is justified under GATT Article XX(b).............................................................47  
3. China has failed to show that Section 727 results in a breach of any obligation 
under the SPS Agreement .......................................................................................................52  
H. EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF CHINA AT THE SECOND 
SUBSTANTIVE MEETING OF THE PANEL .....................................................................................55  
1. Section 727 is inconsistent with the SPS Agreement .............................................................55  
(a) Section 727 is not an intermediate step in FSIS equivalence procedures .................................55  
(b) 727 is subject to Articles 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, and 8 of the SPS Agreement ...................55  
(c) China has sustained its burden of proving a violation of Article 5.5 of the 
SPS Agreement ..........................................................................................................................56  
(i) The two situations identified by China are comparable under Article 5.5 of the 
SPS Agreement.................................................................................................................. ........56  
(ii) The United States applies distinct ALOPs to comparable situations........................................56  
(d) In addition to Article 5.5, Section 727 is inc onsistent with Articles 2.2, 2.3, 5.1, 5.2, 
5.6, and 8 of the SPS Agreement ...............................................................................................57  
(e) SPS violations cannot be justified on the basis of GATT Article XX(b) .................................57  
(i) Violations of GATT 1994 and of the Agr eement on Agriculture cannot be justified 
under Article XX(b)............................................................................................................ .......57  
(f) Section 727 was not "necessary" ..............................................................................................57  
(i) Section 727 did not materially contribute to its objective ........................................................57  
(ii) FSIS procedures are a reasonably availa ble alternative to Section 727..................................58  
(g) Section 727 is inconsistent with the requ irements of the Article XX chapeau.........................58  
I. CLOSING STATEMENT OF CHINA AT THE SECOND SUBSTANTIVE MEETING OF THE 
PANEL ............................................................................................................................... ........58  
J. EXECUTIVE SUMMARY OF THE ORAL STATEMENT BY THE UNITED  STATES AT THE 
SECOND SUBSTANTIVE MEETING OF THE PANEL .......................................................................60  
V. ARGUMENTS OF THE THIRD PARTIES ........................................................................64  
A. EUROPEAN UNION .....................................................................................................................64  
1. Executive summary of the third party written submission by the 
European Union ................................................................................................................. .....64  
(a) Concerning the existence of  the alleged measures....................................................................64  
(i) On the notion of "future cl osely-related measures"..................................................................64  
(ii) On the notion of the "moratorium" ...........................................................................................65   WT/DS392/R 
 Page v 
 
 
  (iii) On the expiry of Section 727 and the letter of 12 November 2009 ...........................................65  
(b) Claims relating to the application of the GATT .......................................................................66  
(i) On the application of GATT XI.................................................................................................6 6 
(ii) On the relation between GATT XX(b) and the SPS Agreement ................................................67  
(c) Claims relating to the application of the SPS Agreement .........................................................68  
(d) Request for enhanced third party rights ....................................................................................70  
B. KOREA ............................................................................................................................... ........70  
1. Executive summary of the third- party submission of Korea..............................................70  
C. CHINESE TAIPEI .........................................................................................................................71  
1. Oral statement by Chinese Taipei .........................................................................................71  
D. TURKEY ............................................................................................................................... ......72  
1. Oral statement by Turkey......................................................................................................7 2 
VI. INTERIM REVIEW...............................................................................................................73  
A. GENERAL ............................................................................................................................... ....73  
B. CHINA 'S COMMENTS ON THE INTERIM REPORT .........................................................................73  
1. Factual aspects ................................................................................................................ ........73  
2. Whether Section 727 is an SPS measure...............................................................................74  
3. Miscellaneous .................................................................................................................. ........75  
C. UNITED  STATES ' COMMENTS ON THE INTERIM REPORT ............................................................75  
1. General comments on judicial economy ...............................................................................75  
2. Factual aspects ................................................................................................................ ........80  
3. Whether Article 4 is the only provision of the SPS Agreement  applicable to 
Section 727.................................................................................................................... ...........81  
4. Whether Section 727 is based on scienti fic principles and is not maintained 
without sufficient scientific evidence as required by Article 2.2 of the SPS Agreement .........................................................................................................................82
 
5. Whether Section 727 is inconsistent with Article 5.5 of the SPS Agreement ......................84  
6. Miscellaneous .................................................................................................................. ........84  
VII. FINDINGS....................................................................................................................... ........84  
A. PRELIMINARY ISSUES ................................................................................................................84  
1. Terms of reference of the panel .............................................................................................84  
(a) Introduction................................................................................................................... ............84  
(b) Request for a preliminary ruling by the United States..............................................................85  
(i) Background..................................................................................................................... ..........85  
(ii) Arguments of the parties ....................................................................................................... ....87  
(iii) Analysis by the Panel.......................................................................................................... ......91  WT/DS392/R 
Page vi  
 
  The relevance of the consultations request and the holding of consultations to a panel's terms 
of reference................................................................................................................... ........................... 92  
Whether China has requested consultations pursuant to the SPS Agreement .......................................... 94  
(iv) Conclusion ..................................................................................................................... ...........97  
2. Whether the Panel may rule on an expired measure...........................................................97  
(a) Background..................................................................................................................... ..........97  
(b) Arguments of the parties....................................................................................................... ....97  
(c) Analysis by the Panel.......................................................................................................... ......98  
(d) Conclusion ..................................................................................................................... ...........99  
3. European Union's request for enhanced third party rights................................................99  
B. ORDER OF ANALYSIS OF CHINA 'S CLAIMS AND THE UNITED STATES ' DEFENCE .......................99  
C. WHETHER SECTION 727 IS AN SPS MEASURE WITHIN THE SCOPE OF THE 
SPS A GREEMENT ......................................................................................................................102  
1. Background ..................................................................................................................... ......102  
2. Arguments of th e parties......................................................................................................1 02 
3. Analysis by the Panel.......................................................................................................... ..104  
(a) The concept of SPS measure under the SPS Agreement .........................................................104  
(i) Definition of SPS measures..................................................................................................... 104 
(ii) Directly or indirectly affect [s] international trade.................................................................106  
(b) Whether Section 727 is an SPS measure under the SPS Agreement .......................................106  
(i) The measure at issue........................................................................................................... ....106  
(ii) Whether Section 727 falls within the definition of Annex A(1) ...............................................107  
Annex A(1)(a) through (d) ...................................................................................................... .............. 109  
Second part of Annex A(1) ...................................................................................................... ............. 111  
(iii) Whether Section 727 affects directly or  indirectly international trade...................................112  
(c) Conclusion ..................................................................................................................... .........112  
D. WHETHER ARTICLE 4 IS THE ONLY PROVISION OF THE SPS A GREEMENT  APPLICABLE 
TO SECTION 727 ......................................................................................................................113  
1. Background ..................................................................................................................... ......113  
2. Arguments of th e parties......................................................................................................1 13 
3. Analysis by the Panel.......................................................................................................... ..114  
E. ORDER OF ANALYSIS OF CHINA 'S CLAIMS UNDER THE SPS A GREEMENT ................................119  
F. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLES  2.2,  5.1 AND 5.2 OF THE 
SPS A GREEMENT ......................................................................................................................120  
1. Arguments of th e parties......................................................................................................1 20 
2. Analysis by the Panel.......................................................................................................... ..121  
(a) Relationship between Articles 2.2, 5.1 and 5.2 of the SPS Agreement  – Order of 
analysis....................................................................................................................... .............121   WT/DS392/R 
 Page vii 
 
 
  (b) Article 5.1 and 5.2 of the SPS Agreement ...............................................................................122  
(i) The concept of risk assessment pursuant to Annex A(4) of the SPS Agreement .....................123  
(ii) When is a measure "based" on a risk assessment?.................................................................124  
(c) Whether the United States has conducted a risk assessment and whether Section 727 
is based on such a risk assessment..........................................................................................125  
(d) Whether Section 727 is based on scientific principles and is not maintained without 
sufficient scientific evidence as required by Article 2.2 of the SPS Agreement .....................126  
(i) Arguments of the parties ....................................................................................................... ..126  
(ii) Analysis by the Panel.......................................................................................................... ....127  
(e) Conclusion ..................................................................................................................... .........129  
G. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  5.5 OF THE SPS A GREEMENT ........129  
1. Arguments of th e parties......................................................................................................1 29 
2. Analysis by the Panel.......................................................................................................... ..131  
(a) Article 5.5 of the SPS Agreement ...........................................................................................131  
(b) The importation of Chinese poultry products vis-à-vis  that of poultry products from 
other WTO Members .............................................................................................................. 133 
(i) Whether Section 727 results in distinctio ns in ALOPS in different yet comparable 
situations..................................................................................................................... ............133  
Whether different yet compar able situatio ns exist .............................................................................. .. 133 
Whether distinctions  in ALOPs exist ............................................................................................ ........ 135  
Conclusion..................................................................................................................... ........................ 138  
(ii) Arbitrary or unjustifiabl e differences in ALOPs.....................................................................139  
(iii) Discrimination or disguised restri ction on international trade..............................................142  
(iv) Conclusion ..................................................................................................................... .........146  
(c) The importation of Chinese poultry products vis-à-vis  that of other food products 
from China ..................................................................................................................... .........146  
Whether different yet compar able situatio ns exist .............................................................................. .. 146 
H. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  2.3 OF THE SPS A GREEMENT ........149  
1. Arguments of th e parties......................................................................................................1 49 
2. Analysis by the Panel.......................................................................................................... ..150  
(a) Article 2.3 of the SPS Agreement ...........................................................................................150  
(b) Conclusion ..................................................................................................................... .........151  
I. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  5.6 OF THE SPS A GREEMENT ........151  
1. Arguments of th e parties......................................................................................................1 51 
2. Analysis by the Panel.......................................................................................................... ..153  
(a) Article 5.6 of the SPS Agreement ...........................................................................................153  
(b) Conclusion ..................................................................................................................... .........155  
J. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  8 OF THE SPS A GREEMENT ...........155  WT/DS392/R 
Page viii  
 
  1.
 Arguments of th e parties......................................................................................................1 55 
2. Analysis by the Panel.......................................................................................................... ..156  
(a) Article 8 and Annex C(1)(a) of the SPS Agreement ...............................................................157  
(b) Whether the procedures applied by the FSIS  in the equivalence determination process 
are control, inspection and approval procedur es within the scope of Annex C(1) of the 
SPS Agreement ........................................................................................................................158  
(c) Whether Section 727 has resulted in an undue delay of the FSIS equivalence 
determination process in respect of poultry products from China within the meaning of Annex C(1)(a) of the SPS Agreement .................................................................................162
 
(d) Whether by failing to observe the provisions of Annex C(1)(a) of the SPS Agreement , 
the United States has acted inconsistently with Article 8 of the SPS Agreement ...................165  
(e) Conclusion ..................................................................................................................... .........165  
K. WHETHER SECTION 727 IS INCONSISTENT WITH ARTICLE  I:1 OF THE GATT 1994................165  
1. Arguments of th e parties......................................................................................................1 65 
2. Analysis by the Panel.......................................................................................................... ..166  
(a) Article I:1 of the GATT 1994 .................................................................................................16 6 
(b) Whether Section 727 is a measure subject to the disciplines of Article I:1 of the 
GATT 1994...................................................................................................................... .......167  
(c) Whether the United States confers an advantag e of the type covered by Article I:1 of 
the GATT 1994.................................................................................................................. .....168  
(d) Whether like products from other Members are granted an advantage within the 
meaning of Article I:1 of the GATT 1994 ..............................................................................169  
(e) Whether the United States confers an advantage that is not extended "immediately 
and unconditionally" to poultry products from China ............................................................172  
(f) Conclusion ..................................................................................................................... .........174  
L. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  XI:1  OF THE GATT 1994.............174  
1. Arguments of th e parties......................................................................................................1 74 
2. Analysis by the Panel.......................................................................................................... ..175  
(a) Article XI:1 of the GATT 1994 ..............................................................................................175  
(b) Section 727 as an "other measure"..........................................................................................175  
(c) Whether Section 727 is a "prohibition or restriction" within the meaning of 
Article XI:1 of the GATT 1994 ..............................................................................................176  
(d) Conclusion ..................................................................................................................... .........177  
M. WHETHER SECTION 727 IS JUSTIFIED UNDER ARTICLE  XX(B)  OF THE GATT 1994..............177  
1. Background ..................................................................................................................... ......177  
2. Relationship between Article XX(b) of the GATT 1994  and the SPS Agreement ...........178  
(a) Arguments of the parties....................................................................................................... ..178  
(b) Analysis by the Panel.......................................................................................................... ....178  
(c) Conclusion ..................................................................................................................... .........182   WT/DS392/R 
 Page ix 
 
 
  N. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  4.2 OF THE AGREEMENT ON 
AGRICULTURE ..........................................................................................................................182  
VIII.  CONCLUSIONS AND RECOMMENDATIONS..............................................................183  
 WT/DS392/R 
Page x  
 
  LIST OF REPORTS CITED IN THIS REPORT 
 
Short Title Full Case Title and Citation 
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 
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 Measures 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 
Argentina – Hides and Leather Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
Import of Finished Leather , WT/DS155/R and Corr.1, adopted 16 February 
2001, DSR 2001:V, 1779 
Border Tax Adjustments GATT Report of the Working Party on Border Tax Adjustments, L/3464, 
adopted 2 December 1970, BISD 18S/102 
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/R, adopted 20 August 1999, as modified by Appellate Body Report 
WT/DS46/AB/R, DSR 1999:III, 1221 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Brazil – Desiccated Coconut Panel Report, Brazil – Measures Affecting Desiccated Coconut , WT/DS22/R, 
adopted 20 March 1997, upheld by Appellate Body Report WT/DS22/AB/R, DSR 1997:I, 189 
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded 
Tyres , WT/DS332/AB/R, adopted 17 D ecember 2007, DSR 2007:IV, 1527 
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body 
Report WT/DS332/AB/R, DSR 2007:V, 1649 
Canada – Continued Suspension Appellate Body Report, Canada – Continued Suspension of Obligations in the 
EC – Hormones Dispute , WT/DS321/AB/R, adopted 14 November 2008 
Canada – Continued 
Suspension Panel Report, Canada – Continued Suspension of Obligations in the EC – 
Hormones Dispute , WT/DS321/R, adopted 14 November 2008, as modified 
by Appellate Body Report WT/DS321/AB/R 
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  WT/DS392/R 
 Page xi 
 
 
  Short Title Full Case Title and Citation 
Canada – Pharmaceutical 
Patents Panel Report, Canada – Patent Protection of Pharmaceutical Products , 
WT/DS114/R, adopted 7 April 2000, DSR 2000:V, 2289 
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 – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R, adopted 
23 October 2002, DSR 2002:VIII, 3045 (Corr.1, DSR 2006:XII, 5473) 
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to 
Certain Agricultural Products , WT/DS207/R, adopted 23 October 2002, as 
modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, 3127 
China – Publications and Audiovisual Products Appellate Body Report, China –  Measures Affecting Trading Rights and 
Distribution Services for Certain Publications and Audiovisual Entertainment 
Products , WT/DS363/AB/R, adopted 19 January 2010 
China – Publications and 
Audiovisual Products Panel Report, China –  Measures Affecting Trading Rights and Distribution 
Services for Certain Publications and Audiovisual Entertainment Products , 
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate 
Body Report WT/DS363/AB/R 
Colombia – Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of 
Entry , WT/DS366/R and Corr.1, adopted 20 May 2009 
Dominican Republic – Import 
and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted 
19 May 2005, DSR 2005:XV, 7367 
Dominican Republic – Import 
and Sale of Cigarettes Panel Report, Dominican Republic – Measures Affecting the Importation and 
Internal Sale of Cigarettes , WT/DS302/R, adopted 19 May 2005, as modified 
by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, 7425 
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, 
Add.1 to Add.9, and Corr.1, adopted 21 November 2006, DSR 2006:III-VIII, 
847 
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 (Ecuador) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by Ecuador , WT/DS27/R/ECU, adopted 
25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:III, 1085 
EC – Bananas III (Guatemala and Honduras) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by Guatemala and Honduras , 
WT/DS27/R/GTM, WT/DS27/R/HND, adopted 25 September 1997, as 
modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, 695 WT/DS392/R 
Page xii  
 
  Short Title Full Case Title and Citation 
EC – Bananas III (Mexico) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Banana s, Complaint by Mexico , WT/DS27/R/MEX, adopted 
25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, 
DSR 1997:II, 803 
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by the United States , WT/DS27/R/USA, 
adopted 25 September 1997, as modified by Appellate Body Report 
WT/DS27/AB/R, DSR 1997:II, 943 
EC – Bananas III (Article 21.5 – Ecuador II) / 
EC – Bananas III (Article 21.5 – US) Appellate Body Reports, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Second Recourse to 
Article 21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU, adopted 11 
December 2008, and Corr.1 / European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of 
the DSU by the United States , WT/DS27/AB/RW/USA and Corr.1, adopted 
22 December 2008 
EC – Bananas III 
(Article 21.5 – Ecuador II) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by 
Ecuador , WT/DS27/RW2/ECU, adopted 11 December 2008, as modified by 
Appellate Body Report WT/DS27/AB/RW2/ECU 
EC – Commercial Vessels Panel Report, European Communities – Measures Affecting Trade in 
Commercial Vessels , WT/DS301/R, adopted 20 June 2005, DSR 2005:XV, 
7713 
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 – Sardines Appellate Body Report, European Communities – Trade Description of 
Sardines , WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3359 
EC – Sardines Panel Report, European Communities – Trade Description of Sardines , 
WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by Appellate 
Body Report WT/DS231/AB/R, DSR 2002:VIII, 3451 
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries , WT/DS246/AB/R, adopted 
20 April 2004, DSR 2004:III, 925 
EC – Tariff Preferences Panel Report, European Communities – Conditions for the Granting of Tariff 
Preferences to Developing Countries , WT/DS246/R, adopted 20 April 2004, 
as modified by Appellate Body Report WT/DS/246/AB/R, DSR 2004:III, 1009 
EEC – Apples (US) GATT Panel Report, European Economic Community – Restrictions on 
Imports of Apples – Complaint by the United States , L/6513, adopted 
22 June 1989, BISD 36S/135  WT/DS392/R 
 Page xiii 
 
 
  Short Title Full Case Title and Citation 
EEC – Apples I (Chile) GATT Panel Report, EEC Restrictions on Imports of Apples from Chile , 
L/5047, adopted 10 November 1980, BISD 27S/98 
EEC – Animal Feed Proteins GATT Panel Report, EEC – Measures on Animal Feed Proteins , L/4599, 
adopted 14 March 1978, BISD 25S/49 
EEC – Dessert Apples GATT Panel Report, European Economic Community – Restrictions on 
Imports of Dessert Apples – Complaint by Chile , L/6491, adopted 
22 June 1989, BISD 36S/93 
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R, adopted 25 November 1998, 
DSR 1998:IX, 3767 
Guatemala – Cement I Panel Report, Guatemala – Anti-Dumping Investigation Regarding Portland 
Cement from Mexico , WT/DS60/R, adopted 25 November 1998, as modified 
by Appellate Body Report WT/DS60/AB/R, DSR 1998:IX, 3797 
India – Additional Import 
Duties Appellate Body Report, India – Additional and Extra-Additional Duties on 
Imports from the United States , WT/DS360/AB/R, adopted 17 November 
2008 
India – Additional Import 
Duties Panel Report, India – Additional and Extra-Add itional Duties on Imports from 
the United States , WT/DS360/R, adopted 17 November 2008, reversed by 
Appellate Body Report WT/DS360/AB/R 
India – Autos Appellate Body Report, India – Measures Affecting the Automotive Sector , 
WT/DS146/AB/R, WT/DS175/AB/R, adopted 5 April 2002, DSR 2002:V, 1821 
India – Autos Panel Report, India – Measures Affecting the Automotive Sector , 
WT/DS146/R, WT/DS175/R and Corr.1, adopted 5 April 2002, DSR 2002:V, 
1827 
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 
India – Quantitative 
Restrictions Appellate Body Report, India – Quantitative Restrictions on Imports of 
Agricultural, Textile and Industrial Products , WT/DS90/AB/R, adopted 
22 September 1999, DSR 1999:IV, 1763 
India – Quantitative Restrictions Panel Report, India – Quantitative Restrictions on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/R, adopted 22 September 1999, 
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, 1799 
Indonesia – Autos Panel Report, Indonesia – Certain Measures Affecting the Automobile 
Industry , WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 
and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, 2201 
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 WT/DS392/R 
Page xiv  
 
  Short Title Full Case Title and Citation 
Japan – Alcoholic Beverages I GATT Panel Report, Japan – Customs Duties, Taxes and Labelling Practices 
on Imported Wines and Alcoholic Beverages , L/6216, adopted 
10 November 1987, BISD 34S/83 
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 – Alcoholic 
Beverages II Panel Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/R, 
WT/DS10/R, WT/DS11/R, adopted 1 November 1996, as modified by Appellate Body Report WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, 
DSR 1996:I, 125 
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 – Semi-Conductors GATT Panel Report, Japan – Trade in Semi-Conductors , L/6309, adopted 
4 May 1988, BISD 35S/116 
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages , 
WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, 3 
Korea – Alcoholic Beverages Panel Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/R, 
WT/DS84/R, adopted 17 February 1999, as modified by Appellate Body Report WT/DS75/AB/R, WT/DS84/AB/R, DSR 1999:I, 44 
Korea – Commercial Vessels Panel Report, Korea – Measures Affecting Trade in Commercial Vessels , 
WT/DS273/R, adopted 11 April 2005, DSR 2005:VII, 2749 
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 
Mexico – Anti-Dumping 
Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted 
20 December 2005, DSR 2005:XXII, 10853 
Mexico – Anti-Dumping 
Measures on Rice Panel Report, Mexico – Definitive Anti-Dumping Me asures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R, adopted 20 December 2005, as 
modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 
11007 
Mexico – Corn Syrup (Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High 
Fructose Corn Syrup (HFCS) from the United States – Recourse to 
Article 21.5 of the DSU  by the United States , WT/DS132/AB/RW, adopted 
21 November 2001, DSR 2001:XIII, 6675 
Mexico – Corn Syrup (Article 21.5 – US) Panel Report, Mexico – Anti-Dumping Investigatio n of High Fructose Corn 
Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU  
by the United States , WT/DS132/RW, adopted 21 November 2001, upheld by 
Appellate Body Report WT/DS132/AB/RW, DSR 2001:XIII, 6717  WT/DS392/R 
 Page xv 
 
 
  Short Title Full Case Title and Citation 
Turkey – Textiles Appellate Body Report, Turkey – Restrictions on Imports of Textile and 
Clothing Products , WT/DS34/AB/R, adopted 19 November 1999, 
DSR 1999:VI, 2345 
Turkey – Textiles Panel Report, Turkey – Restrictions on Imports of Textile and Clothing 
Products , WT/DS34/R, adopted 19 November 1999, as modified by Appellate 
Body Report WT/DS34/AB/R, DSR 1999:VI, 2363 
US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, 4793 
US – 1916 Act (EC) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by the 
European Communities , WT/DS136/R and Corr.1, adopted 26 September 
2000, upheld by Appellate Body Report WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4593 
US – 1916 Act (Japan) Panel Report, United States – Anti-Dumping Act of 1916, Complaint by Japan , 
WT/DS162/R and Add.1, adopted 26 September 2000, upheld by Appellate 
Body Report WT/DS136/AB/R, WT/DS162/AB/R, DSR 2000:X, 4831 
US – Canadian Tuna GATT Panel Report, United States – Prohibition of Imports of Tuna and Tuna 
Products from Canada , L/5198, adopted 22 February 1982, BISD 29S/91 
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 
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, 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 – Continued Suspension Appellate Body Report, United States – Continued Suspension of Obligations 
in the EC – Hormones Dispute , WT/DS320/AB/R, adopted 14 November 
2008 
US – Continued Suspension Panel Report, United States – Continued Suspension of Obligations in the EC 
– Hormones Dispute , WT/DS320/R, adopted 14 November 2008, as modified 
by Appellate Body Report WT/DS320/AB/R 
US – Corrosion-Resistant Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping 
Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3  
US – Corrosion-Resistant 
Steel Sunset Review Panel Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan , WT/DS244/R, 
adopted 9 January 2004, as modified by Appellate Body Report WTDS244/AB/R, DSR 2004:I, 85  WT/DS392/R 
Page xvi  
 
  Short Title Full Case Title and Citation 
US – Customs Bond Directive Panel Report, United States – Customs Bond Directive for Merchandise 
Subject to Anti-Dumping/Countervailing Duties , WT/DS345/R, adopted 1 
August 2008, as modified by Appellate Body Report WT/DS343/AB/R, 
WT/DS345/AB/R 
US – FSC (Article 21.5 – EC II) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Second Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW2, adopted 14 March 2006, DSR 2006:XI, 
4721 
US – FSC (Article 21.5 – EC II) Panel Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Second Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/RW2, adopted 14 March 2006, upheld by Appellate 
Body Report WT/DS108/AB/RW2, DSR 2006:XI, 4761 
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3
US – Gasoline Panel Report, United States – Standards for Reformulated and Conventional 
Gasoline , WT/DS2/R, adopted 20 May 1996, as modified by Appellate Body 
Report WT/DS2/AB/R,  DSR 1996:I, 29 
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257 
US – Oil Country Tubular 
Goods Sunset Reviews Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on 
Oil Country Tubular Goods from Argentina , WT/DS268/R and Corr.1, 
adopted 17 December 2004, as modified by Appellate Body Report 
W/DS/268/AB/R, DSR 2004:VIII, 3421 
US – MFN Footwear  GATT Panel Report, United States – Denial of Most-Favoured-Nation 
Treatment as to Non-Rubber Footwear from Brazil,  DS18/R, adopted 
19 June 1992, BISD 39S/128 
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 
US – Section 337 Tariff Act GATT Panel Report, United States Section 337 of the Tariff Act of 1930 , 
L/6439, adopted 7 November 1989, BISD 36S/34 
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 – Shrimp 
(Article 21.5 – Malaysia) Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6481  WT/DS392/R 
 Page xvii 
 
 
  Short Title Full Case Title and Citation 
US – Shrimp 
(Article 21.5 – Malaysia) Panel Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/RW, adopted 21 November 2001, upheld by Appellate Body 
Report WT/DS58/AB/RW, DSR 2001:XIII, 6529 
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on Shrimp from 
Ecuador , WT/DS335/R, adopted on 20 February 2007, DSR 2007:II, 425 
US – Shrimp (Thailand) / 
US – Customs Bond Directive Appellate Body Report, United States – Measures Relating to Shrimp from 
Thailand / United States – Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties , WT/DS343/AB/R, 
WT/DS345/AB/R, adopted 1 August 2008 
US – Stainless Steel (Mexico) Appellate Body Report, United States – Final Anti-Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/AB/R, adopted 20 May 2008 
US – Stainless Steel (Mexico) Panel Report, United States – Final Anti-Dumping Measures on Stainless 
Steel from Mexico , WT/DS344/R, adopted 20 May 2008, as modified by 
Appellate Body Report WT/DS344/AB/R 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3 
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, 
Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, 299 
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, adopted 23 May 1997, 
and Corr.1, 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/DS392/R 
Page xviii  
 
  LIST OF ABBREVIATIONS 
 
AAA Agriculture, Rural Development, Food and Drug Administration, and Related 
Agencies Appropriations Act 
AI Avian influenza 
ALOP Appropriate Level of Protection 
APHIS Animal and Plant Health Inspection Service CCA Central Competent Authority CFR Code of Federal Regulations China People's Republic of China 
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes 
EU European Union FSIS Food Safety and Inspection Service  
HPAI Highly Pathogenic Avian Influenza JES Joint Explanatory Statement 
OIE World Organisation for Animal Health  (Office International des Epizooties) 
PPIA Poultry Products Inspection Act SPS Sanitary and Phytosanitary 
SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures  
US United States 
USC United States Code 
USDA United States Department of Agriculture  
VCLT Vienna Convention on the Law of the Treaties WTO World Trade Organization 
  WT/DS392/R 
 Page 1 
 
 
 I. INTRODUCTION 
1.1 On 17 April 2009, the People's Republic of China ("China") requested consultations with the 
United States pursuant to Article 4 of the Unde rstanding on Rules and Procedures Governing the 
Settlement of Disputes ("DSU"), Article XXII of the General Agreement on Tariffs and Trade  1994 
("GATT 1994") and Article 19 of the Agreement on Agriculture  concerning measures taken by the 
United States affecting the importation of poult ry products from China. In addition, in its 
consultations request, China indicated that, if it we re demonstrated that any such measure is an 
SPS measure, China also requested consultations with  the United States pursuant to Article 11 of the 
Agreement on the Application of San itary and Phytosanitary Measures ("SPS Agreement ").1 China 
and the United States held consultations on 15 May 2009. However, no mutually agreed solution was 
found. 
1.2 On 23 June 2009, China requested the establishmen t of a panel pursuant to Article 6 of the 
DSU, Article XXIII:2 of the GATT 1994, Article 19 of the Agreement on Agriculture , and Article 11 
of the SPS Agreement .2 
1.3 At its meeting on 31 July 2009, the DSB established a panel pursuant to the request of China 
in document WT/DS392/2, in accordance with Article 6 of the DSU. 
1.4 The Panel's terms of reference are the following:  
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the parties to the dispute, the matter referred to the DSB by China in document 
WT/DS392/2 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements." 
1.5 On 16 September 2009, China requested the Dire ctor-General to determine the composition 
of the panel, pursuant to paragraph 7 of Article 8 of the DSU. 
1.6 On 23 September 2009, the Director-General accordingly composed the Panel as follows: 
 Chairman: Mr Ole Lundby 
  
 Members:  Mr Felipe Lopeandía 
   Mr Mohammad Saeed  1.7 Brazil, the European Union
3, Guatemala, Korea, Chinese Taipei and Turkey reserved their 
rights to participate in the Panel proceedings as third parties. 
1.8 The Panel held its first substantive meeti ng with the parties on 15 and 16 December 2009. 
The session with the third parties was held on 16 December 2009. The second substantive meeting 
was held on 9 and 10 March 2010. 
1.9 On 1 October 2009, the United States submitted a request for a preliminary ruling pursuant to 
paragraph 11 of the Panel's working procedures on whether China had requested consultations on its 
                                                      
1 See also further clarification at footnote 1 to China's Panel Request, WT/DS392/2. 
2 WT/DS392/2, para. 3. 
3 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on Europe an Union and the Treaty 
establishing the European Commun ity (done at Lisbon, 13 December  2007) entered into force. On 
29 November 2009, the WTO received a Verbal Note (WT /L/779) from the Council of  the European Union and 
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union repla ces and succeeds the European Communities. WT/DS392/R 
Page 2  
 
 SPS claims. In its oral statement at the first substa ntive meeting of the Panel with the parties, China 
also requested a preliminary ruling from the Pane l on whether Section 743 of the Agriculture, Rural 
Development, Food and Drug Administration, an d Related Agencies Appropriations Act ("AAA") of 
2010 was within the Panel's terms of reference. In  a letter of 18 December 2009, the Panel informed 
the parties that it would not issue a separate deci sion on the two requests for a preliminary ruling on 
jurisdiction, but rather would defer its ruling on bot h requests until issuance of its Report. In response 
to the Panel's letter, China informed  the Panel in a letter dated 7 January 2010 (Exhibit CN-51) that it 
would not pursue a claim that Section 743 was inco nsistent with the United States' WTO obligations 
in this dispute, but reserved its right to ch allenge Section 743 in separate dispute settlement 
proceedings. 
1.10 On 3 May 2010, the Panel issued the descriptive part of its Panel Report to the parties. The 
Panel issued its interim report to the parties on 14 June 2010. The Panel issued its final report to the 
parties on 26 July 2010. 
II. FACTUAL ASPECTS 
A. B
ACKGROUND  
2.1 This dispute concerns China's pursuit of access to the US market for poultry. According to 
China, the possibility to access the US market was cut off by legi slation passed by the United States 
Congress ("US Congress") which, restricted the ability of the United States Department of Agriculture 
("USDA") and its agency, the Food Safety and Insp ection Service ("FSIS") to use funds allocated by 
the US Congress for the purpose of establishing or implementing a rule permitting the importation of poultry products from China into the United States.
4 
B. THE MEASURE AT ISSUE  
2.2 The measure at issue in this dispute is Section 727 of the AAA of 20095 which reads: 
"None of the funds made available in this Act may be used to establish or implement 
a rule allowing poultry products to be imported into the United States from the People's Republic of China."
6 
2.3 Section 727 was accompanied by a Joint Expl anatory Statement ("JES") which provides the 
following: 
"There remain very serious concerns about contaminated foods from China and 
therefore the bill retains language prohibiti ng FSIS from using funds to move forward 
with rules that would allow for the importation of poultry products from China into the U.S. It is noted that China has enacted  revisions to its food safety laws. USDA is 
urged to submit a report to the Committees on the implications of those changes on 
the safety of imported poultry products from China within one year. The Department 
is also directed to submit a plan for act ion to the Committees to guarantee the safety 
of poultry products from China. Such plan should include the systematic audit of inspection systems, and audits of all pou ltry and slaughter facilities that China would 
                                                     
 
4 The US Congress enacts annual appropriation bills which provide funding for the agencies and 
programmes previously authorized. The US Congress can determine the terms and conditions under which an appropriation may be used. Provisions in appropriations acts may be intended to prevent or restrict federal 
agencies from taking certain rulemaking or regulatory actions. See Exhibits US-2 and 4. 
5 China has stated that it was only challenging Section 727 of the AAA 2009. See China's response to 
Panel's question 12, and the letter China sent to the Panel on 7 January 2010. 
6 Section 727, AAA of 2009 (Exhibit CN-1).  WT/DS392/R 
 Page 3 
 
 
 certify to export to the U.S. The plan also should include the systemic audit of 
laboratories and other control operations, expanded port-of-entry inspection, and 
creation of an information sharing progr am with other major countries importing 
poultry products from China that have conduc ted audits and plant inspections among 
other actions. This plan should be made  public on the Food Safety and Inspection 
Service web site upon its completion."7 
2.4 As a matter of United States law, a JES serves to explain the purpose of a given provision in 
an appropriations bill.8  Section 727 expired on 30 September 2009. 
C. THE UNITED  STATES ' REGIME FOR THE IMPORTATION OF POULTRY  
2.5 On 28 August 1957, the US Congress adopted th e Poultry Products Inspection Act ("PPIA"), 
which is set forth in Title 21 of the United States Code ("USC").9 This statute has been subsequently 
amended on numerous occasions. In the PPIA, the US  Congress sets out the general legal framework 
governing all aspects of trade in poultry produc ts, both imported and domestically produced.10 
Because poultry, among other food products, falls within the competency of the USDA11, the 
US Congress delegated to the Secretary of Agricult ure ("the Secretary") the duty to set out detailed 
rules and regulations relating to the in spection of poultry and poultry products.12 The Secretary 
promulgated regulations13 establishing the conditions under whic h poultry products are allowed to be 
imported in the United States14 which are contained in the US C ode of Federal Regulations ("CFR").15   
2.6 The Secretary has established an "equivalence" based regime for gaining permission to import 
poultry into the United States. The FSIS, which is an agency of the USDA, implements and enforces 
the regulations on poultry importation.16 The FSIS authorizes the importati on of poultry products into 
the United States on a country-by-country basis.17 Countries wishing to export poultry products to the 
United States have to first request a determina tion of eligibility by the FSIS. The FSIS will then 
                                                      
7 JES, Division A of AAA of 2009, p. 82. (Exhibit CN-33). 
8 Congressional Research Service, Conference Reports and Joint Explanatory Statements, 
1 December 2004. p. 7. Exhibit US-58. 
9 United States' first written submission, para. 23. 
10 PPIA, 21 USC § 463. Rules and Regulations. (a) Storage and handling of poultry products; violation 
of regulations: The Secretary may by regulations prescribe conditions under which poultry products capable of 
use as human food, shall be stored or otherwise handled by any persona engaged in the business of buying, selling, freezing, storing, or transpor ting, in or for commerce, or impor ting, such articles, whenever the 
Secretary deems such action necessary to assure that su ch articles will not be adulterated or misbranded when 
delivered to the consumer. Violation of any su ch regulation is prohibited. (Exhibit CN-4). 
11 PPIA, 21 USC § 463 (a)-(c) (Exhibit CN-4).  
12 PPIA, 21 USC § 463 (b) (Exhibit CN-4). 
13 PPIA, 21 USC §§ 463 and 466 (Exhibit CN-4). 
14 9 CFR § 381.196 (Exhibit CN-6).  
15 The CFR is the codification of the general and permanent rules published in the Federal Register by 
the executive departments and agencies of the US Govern ment (United States' first written submission, para. 23, 
footnote 26). 
16 The Animal and Plant Health Inspection Service (" APHIS") is also a USDA agency which has some 
authority over the importation of poultry into the Un ited States. APHIS is responsible for preventing the 
introduction and dissemination of animal diseases, incl uding poultry diseases, into the United States. With 
respect to poultry imports, APHIS's main responsibility is to inspect particular shipments of poultry as they 
arrive at the border to ensure that they meet APHIS's requirements to prevent the introduction of disease into the 
United States. 
17 PPIA, 21 USC §466 (Exhibit CN-4), implemented through the rules detailed in 9 CFR § 381.196 
(Exhibit CN-6).  WT/DS392/R 
Page 4  
 
 establish whether an applicant's poultry inspection system  is equivalent to that of the United States in 
order to allow the importation of its poultry products.
18  
2.7 If the FSIS determines that an applicant country's  poultry inspection system is equivalent to 
that of the United States, it publishes rules allowi ng the importation of poultry products from that 
country in the Federal Register. Subsequent to th at initial determination, the FSIS also does annual 
reviews to determine if approved countries' poultry safe ty standards continue to be equivalent to those 
of the United States. The FSIS also re-inspects im ported products to ensure that they meet the 
United States' poultry safety standards. The procedur es followed by the FSIS in order to determine the 
equivalence between the countries' poultry inspec tion systems are explained in detail below. 
2.8 The equivalence process starts by an appli cant country making a request for eligibility to 
export poultry products to the United States.19 After the equivalence request has been submitted, the 
FSIS will evaluate the equivalence of the applicant country's poultry inspection system. If the FSIS determines that the applicant country's system is  equivalent, the applicant country must certify 
establishments as fit to export. After the app licant country commences exporting, the FSIS conducts 
ongoing equivalence verifications. The process includes:   
 (1) Initial equivalence determination:  In this first stage the FSIS determines whether the 
poultry inspection system of the applicant country is equivalent to the inspection 
system of the United States own poultry safety measures.
20  If FSIS makes a 
preliminary determination that the system s are equivalent, it publishes a proposed 
rule in the Federal Register. If, after re viewing the comments it receives, FSIS makes 
a final determination that the country's system is equivalent, the FSIS publishes a 
final rule in the Federal Register and adds  the applicant to the list in the CFR of 
countries eligible to export poultry products to the United States.21 
  (2) Certification of establishments : During this second stage,  the eligible applicant 
country must certify individual establishments as fit to export to the United States; 
and, 
  (3) Ongoing equivalence verification : In this third stage, the eligible applicant country 
submits to an ongoing (typically annual) equi valence process to maintain eligibility to 
export to the United States.
22 
 
2.9 These three stages are discussed in greater detail below. 
1. First Stage: Initial equivalence determination 
2.10 As explained above, in this initial stage, th e FSIS investigates whether the poultry inspection 
system of the applicant country is eq uivalent to that of the United States.23 This first stage is triggered 
by the request of an exporting country to obtain authorization to export poultry products to the 
                                                      
18 9 CFR § 381.196 (Exhibit CN-6).  
19 9 CFR § 381.196(a)(2)(iii) (Exhibit CN-6).  
20 9 CFR § 381.196(a)(2)(i)-(ii) (Exhibit CN-6) and USDA/FSIS, Process for Evaluating the Equivalence of 
Foreign Meat and Poultry Food Regulatory Systems (Exhibit CN-7), p. 10.  
21 USDA/FSIS Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory 
Systems , p. 10 (Exhibit CN-7). 
22 9 CFR § 381.196(a)(2)(iii) and USDA/FSIS, Process for Evaluating the Equivalence  of Foreign Meat and 
Poultry Food Regulatory Systems, p.10-14  (Exhibit CN-7). Both the initial equivalence determination and the ongoing 
equivalence verification require the active involvement of numerous FSIS employees.  
23 9 CFR §381.196 (Exhibit CN-6) and USDA/FSIS, Process for Evaluating the Equivalence of Foreign 
Meat and Poultry Food Regulatory Systems , p. 10 (Exhibit CN-7).   WT/DS392/R 
 Page 5 
 
 
 United States. The application has to include copies of all the laws and regul ations on which its own 
poultry inspection system is based.24   
2.11 Once eligibility for importation of poultry is re quested, an initial equivalency evaluation is 
conducted25 including three sequential steps: (a) a documen t review, (b) an on-site audit, and (c) the 
publication of the proposed and final rules in the Fede ral Register and the country's addition to the list 
in the CFR. 
(a) Document review 
2.12 The first step in the initial equivalence stage is  the evaluation of the applicant country's laws, 
regulations and other written info rmation related to the applicant's poultry inspection system. As 
indicated above, further to the application for authoriz ation to import, the applicant country is asked to 
provide the FSIS with copies of the laws and regul ations on which its poultry inspection system is 
based. Once this stage is successfully concluded, the FSIS moves onto the second stage of the process, 
the on-site audit. 
(b) On-site audit 
2.13 During the on-site audit, a team of FSIS experts verify that the applicant's regulatory system 
has satisfactorily implemented all the laws, regul ations, and other inspection or certification 
requirements that the FSIS had found to be equivalent during the document review step.26 
(c) Publication in the Federal Register 
2.14 The third step is the publication of the final rule allowing the importation of poultry products 
from certified establishments in the applicant country . After both the document review and the on-site 
audit steps have been satisfactorily completed, the FSIS publishes a draft rule in the Federal Register 
that announces the results of the first two steps and proposes to add the applicant country to the list of 
eligible exporters in the CFR. Upon receipt and co nsideration of public comments, the FSIS makes a 
final decision about equivalence based upon all ava ilable information and, if favourable, publishes a 
final rule in the Federal Register a nnouncing the applicant country's eligibility.27  
2. Second Stage: Certification of establishments  for export by the eligible exporting 
country 
2.15 Once the initial equivalence determination stage has been completed, the applicant country 
must conduct inspections of establishments wishing to export to the United States.28 Only those 
establishments that are determined by the applican t country's authorities to fully meet the entire 
equivalent sanitary requirements may be certified to export to the United States.29 The applicant 
country authorities must ensure ongoing compliance with the equivalent sanitary requirements, 
especially with respect to establishments  that are exporting to the United States.30 The applicant 
                                                      
24 9 CFR § 381.196(a)(iii) (Exhibit CN-6).  
25 USDA/FSIS, Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory 
Systems , p. 10  (Exhibit CN-7).  
26 USDA/FSIS, Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory 
Systems , pp. 11-12 (Exhibit CN-7). 
27 USDA/FSIS, Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory 
Systems , p. 12 (Exhibit CN-7). 
28 9 CFR § 381.196 (a)(3) (Exhibit CN-6).  
29 9 CFR § 381.196 (a)(3) (Exhibit CN-6).  
30 9 CFR § 381.196 (a)(2)(iv)(A)–(C), 9 CFR § 381.196 (a)(3) (Exhibit CN-6).  WT/DS392/R 
Page 6  
 
 country notifies the FSIS of the certification by tr ansmitting a certification list according to the form 
specified in the CFR.
31 This certification must be renewed annually.32 
3. Third Stage: Ongoing equivalence verification 
2.16 The regulations require that ongoing  reviews be conducted by the FSIS.33 The purpose of the 
ongoing equivalence verification is to maintain eligibility for exportation.34 Like an initial equivalence 
determination, the ongoing equivalence ve rification is conducted in three stages:35 (i) a recurring 
document analysis, (ii) further on-s ite audits, and (iii) continuous port-of-entry re-inspections of 
poultry products shipped to the United States from the eligible exporting country.36 
D. CHINA 'S REQUEST FOR EQUIVALENCE  
2.17 China requested an initial equivalence determ ination to export poultry products to the 
United States on 20 April 2004.37 Further to this request, the FSI S conducted an initial equivalence 
audit, the objective of which was to "evaluat e the performance of China's Central Competent 
Authority ('CCA') with respect to controls over the slaughter and processing establishments proposed 
for certification by the CCA as eligible to e xport poultry products to the United States."38  The final 
report concerning this audit was issued on 17 May 2005.39 The report found a number of deficiencies 
in some processing and slaughter plants40, and as a consequence, the FSIS sent a letter to China 
proposing a follow-up equivalence audit to check whet her the deficiencies identified in the slaughter 
system during the December 2004 audit had been corrected.41  The FSIS conducted the second initial 
equivalence audit on China's poultry slaughter insp ection system in July and August 2005, and on 
4 November 2005 issued its Final Report.42  
2.18 On the basis of the Report of the first on-site  audit, on 23 November 2005, the FSIS proposed 
to amend the Federal Poultry Products Inspection regulations43 to add China to the list of countries 
eligible to export processed poultry products to th e United States, provided that the poultry products 
processed in certified establishments  in China came from poultry slaughtered in the United States or 
certified establishments in other countries elig ible to export poultry to the United States.44   
                                                      
31 9 CFR § 381.196 (a)(3) (Exhibit CN-6).  
32 9 CFR § 381.196 (a)(2)(iii) (Exhibit CN-6).  
33 9 CFR § 381.196 (a)(2)(iii) (Exhibit CN-6).  
34 9 CFR § 381.196 (a)(3) (Exhibit CN-6).  
35 USDA/FSIS, Process for Evaluating the Equivalence  of Foreign Meat and Poultry Food Regulatory 
Systems , p. 15 (Exhibit CN-7).  
36 USDA/FSIS, Process for Evaluating the Equivalence  of Foreign Meat and Poultry Food Regulatory 
Systems , p. 14  (Exhibit CN-7).  
37 United States' first written submission, para. 33. 
38 Final Report of an Initial Equivalence Audit carried out in China covering China's Poultry Inspection 
System, 1 – 17 December 2004, p. 4 (Exhibit CN-13). 
39 Exhibit CN-13. 
40 In one laboratory test, FSIS found that sampling and handling procedures could have led to cross-
contamination. Deficiencies were also found in three establishments concerning preoperational, operational and other sanitation deficiencies. Further, it was found that the General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ) did not have adequate control and supervision over the establishments. See 
Final Report of an Initial Equivalence Audit carried out in China covering China's Poultry Inspection System, pp. 7, 9 and 11. Exhibit CN-13. 
41 Letter sent from FSIS to China (Exhibit US-7). 
42 Exhibit CN-16. 
43 These regulations refer to the United States' CFR. 
44 Exhibit CN-14.  WT/DS392/R 
 Page 7 
 
 
 2.19 On 24 April 2006, the FSIS published notification in the Federal Register that it would be 
adding China to the list in the CFR of countries e ligible to export processed poultry products not 
slaughtered in China as described above. As noted above, China also applied for equivalence with 
respect to its inspection system for slaughtered poultry. The April Federal Register Notice only 
covered processed poultry and did not propose allo wing the importation of poultry slaughtered in 
China.45   
2.20 Two weeks after publication of the Federal Register Notice, on 9 May 2006, the FSIS sent 
China a letter outlining the remaining two steps that  had to be completed before China could export 
processed poultry products to the United States.46 According to this letter, China needed to: (i) submit 
to the FSIS a list of establishments certified by  the Chinese inspection services as satisfying the 
requirements for exporting processed poultry products  to the United States, and (ii) submit product 
labels by certified establishments in China for revi ew by the Labelling Consumer Protection Staff of 
the FSIS.47   
2.21 In June 2006, based in part on previous on-s ite audit of the slaughtered poultry operations in 
China, the FSIS made a preliminary determinat ion that China's poultry inspection system for 
domestically slaughtered  poultry was e quivalent to United States standards.48  Notwithstanding, the 
FSIS did not publish a draft rule in the Federa l Register requesting public comments on China's 
slaughtered poultry operations or announcing the results  of the document review and the on-site audit.  
2.22 At this point, the FSIS had thus determined that China's poultry production system was 
equivalent to that of the United States for processed poultry products from the United States or 
another country that the FSIS had determined was e quivalent to the United States. At the same time, 
FSIS had determined that China's inspection sy stem for slaughtered poultry was preliminarily 
equivalent pending further evalua tion through the rulemaking process. 
2.23 On 20 December 2007, the FSIS sent a letter to China requesting the annual certification of 
establishments eligible to export processed m eat or poultry products to the United States.49  Six days 
later, on 26 December 2007, the Consolidated A ppropriations Act of 2008 entered into force.50  
2.24 This Act contained the AAA of 2008 which provided the funds for the USDA and its 
agencies, such as the FSIS, to execute their activities.51 In particular, Section 733 of the AAA of 2008 
restricted the use of funds to establish or implem ent any rule allowing poultry products from China to 
be imported into the United States.52  Section 733 which expired on 30 September 2008, is not a 
measure at issue in this dispute.53   
                                                      
45 Exhibit CN-14. 
46 Exhibit US-20. 
47 9 May 2006. Exhibit US-20. 
48 USDA, Office of Inspector General Northeast Region. Audit Report: Follow up Review of Food and 
Safety Inspection Service's Controls Over Imported Meat and Poultry Products, August 2008. p. 14. Exhibit CN-17. 
49 Exhibit CN-19. 
50 Exhibit CN-8. 
51 House Report 110-258, 24 July 2007. p. 54 (Exhibit US-42). 
52 Section 733 provides: "None of the funds made ava ilable in this Act may be used to establish or 
implement a rule allowing poultry products to be imported into the United States from the People's Republic of China." 
53 China's response to Panel question No. 17. WT/DS392/R 
Page 8  
 
 2.25 The funding restriction established by Section 733 was maintained by Division A of the 
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009.
54  
2.26 Nearly two years after the United States' first request, on 12 March 200855, China sent the list 
of certified establishments to the FSIS.56 On 23 July 2008, the FSIS published the list of countries 
eligible to export poultry products to the United States. China was included as eligible to export 
processed poultry products. For certain countries, indi cated with shading in the table, eligibility was 
suspended for animal health reasons (directing re aders to see country specific notes) or pending 
equivalence re-verification. The country specific note for China states that "FY 2008 appropriation 
legislation bars FSIS from spending funds on import of poultry from China."57   
2.27 On 28 February 2009, China' s National People's Congress Standing Committee enacted a new 
food safety law.58  
2.28 On 11 March 2009, the US Congress enact ed the Omnibus Appropriations Act.59 This Act 
contained the AAA of 2009. Section 727 of the A AA of 2009, which is the measure being challenged 
by China in this dispute, shared the same wording of Section 733 and thus restricted the use of funds 
to establish or implement any rule allowing poultr y products from China to be imported into the 
United States.  
2.29 Upon its expiry at the end of the 2008-2009 Fiscal Year on 30 September 2009, the funding 
restriction instituted by Section 727 was conti nued by Division B of the Legislative Branch 
Appropriations Act (Continuing Appr opriations Resolution) of 2010.60 Division B also expired once 
the AAA of 2010 entered into force on 21 October 2009.61 This new AAA of 2010 included 
Section 743 a measure that also relates to funding of FSIS activities relating to China's application for 
equivalency of its poultry inspection system. In particular, Section 743 allows that funding to 
establish or implement a rule permitting the impor tation of poultry products from China can be 
restored if the Secretary complies with certain conditions set forth in that provision. As noted above, 
China has decided not to pursue a claim with  respect to Section 743 in this dispute.62  
2.30 As noted in paragraph 2.3 above, Section 7 27 was accompanied by a JES which listed two 
actions that the US Congress expected the FSIS to ta ke.  In particular, the JES urged the USDA to 
submit a report to the Committees on the implications of the recent changes to China's food safety law 
within one year. The JES also "directed" the USDA to submit a plan for action to the Committees to 
guarantee the safety of poultry products from China and stated that the plan should be made public on 
the FSIS web site upon its completion.  
2.31 With respect to how it complied with the request s in the JES, the United States noted that two 
months after the passage of Section 727, the FSIS had sent a letter to the Chinese authorities 
requesting "information to understand  the nature and implication of revisions in food safety laws, 
regulations, and inspection and cont rol procedures enacted since 2006."63 At the first substantive 
                                                      
54 Exhibit CN-9. 
55 9 May 2006. Exhibit US-20. 
56 Exhibit CN-20. 
57 Exhibit CN-21. 
58 Exhibit US-40. 
59 Exhibit CN-1. 
60 Exhibit CN-2. 
61 Exhibit CN-3. 
62 On 7 January 2010, China sent a letter to the Panel indicating that it would not argue the WTO 
inconsistency of Section 743 of the AAA 2010 and reserved  its rights to do so in separate dispute settlement 
proceedings. 
63 Exhibit US-44.  WT/DS392/R 
 Page 9 
 
 
 meeting of the Panel with the parties, China indi cated that it did not respond to this letter because it 
had already initiated dispute settlement proceedings at the WTO.  
2.32 Additionally, the United States informed the Pa nel that the USDA had sent a document to the 
US Congress which it argues is the action plan calle d for in the JES. The one-page document, which 
is undated and not on official USDA letterhead, is entitled "FSIS Action Plan for Creation of 
Congressionally-Mandated China Poultry Inspection System Reports".64 According to this document, 
the FSIS had to review the changes to the Chinese food safety law, and develop a plan of action to guarantee the safety of poultry products from China.  
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS 
3.1 China requests the Panel to find that Section 727 is inconsistent with: 
 (i) Article I:1 of the GATT 1994, because it fails to extend the advantage of the 
opportunity to export to the United States immediately and unconditionally to like poultry products from China
65; 
  (ii) Article XI:1 of the GATT 1994, because it imposes import restrictions that limit 
competitive opportunities for poultry products from China
66; 
  (iii) Article 4.2 of the Agreement on Agriculture , because it imposes a quantitative 
restriction on poultry products from China
67; 
  (iv) Article 2.3 of the SPS Agreement
68, because it arbitrarily and unjustifiably 
discriminates against China69; 
  (v) Article 5.5 of the SPS Agreement , because the higher level of sanitary protection 
applied to China is arbitrary and unju stifiable, resulting in discrimination
70; 
 
 (vi) Article 5.1 and 5.2 of the SPS Agreement, because it is not based on a risk assessment 
within the meaning of Article 5.1 that ta kes into account the factors in Article 5.271; 
  (vii) Article 2.2 of the SPS Agreement, because it is not maintained based on scientific 
evidence
72; 
 
 (viii) Article 5.6 of the SPS Agreement , because it is inconsistent  with the obligation that 
SPS measures not be unduly trade-restrictive73; and 
 
                                                      
64 Exhibit US-43. 
65 China's first written submission, para. 191, China's second written submission, para. 114. 
66 China's first written submission, para. 191, China's second written submission, para. 114. 
67 China's first written submission, para. 191, China's second written submission, para. 114. 
68 China first requested findings on its SPS claims "to the extent that the measure constituted a sanitary 
and phytosanitary measure within the meaning of the SPS Agreement ", See China's first written submission, 
para. 192. Further to its first oral statement, on the grounds that it had been demonstrated that Section 727 is an 
SPS measure within the meaning of the SPS Agreement , China removed that qualification from its requests for 
findings regarding the SPS Agreement  in further submissions. 
69 China's first written submission, para. 192, China's second written submission, para. 114. 
70 China's first written submission, para. 192, China's second written submission, para. 114. 
71 China's first written submission, para. 192, China's second written submission, para. 114. 
72 China's first written submission, para. 192, China's second written submission, para. 114. 
73 China's first written submission, para. 192, China's second written submission, para. 114. WT/DS392/R 
Page 10  
 
  (ix) Article 8 of the SPS Agreement , because the delay resulting from its application is 
unjustifiable, or undue.
74 
 3.2 Given that Section 727 has expired, China further requests the Panel to issue a 
recommendation that the United States does not revert to  language similar to that in Section 727 in its 
future legislation.
75 
3.3 The United States requests that the Panel rejects China's claims in its entirety.76 
IV. ARGUMENTS OF THE PARTIES 
A. EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION OF CHINA  
1. Introduction  
4.1 A series of US measures over the past three years have grossly violated China's most 
fundamental rights under the GATT 1994, i.e. the ri ghts to most-favoured nation treatment and to 
trade without quantitative restrictions. The resu lt of these measures is that the US rules and 
procedures regulating the import of poultry products are applied to every WTO Member except China. 
The United States has enacted these measures despite the fact that Chinese poultry is eligible for 
export to a number of WTO Members with high leve ls of sanitary and phytosanitary protection, such 
as Japan, Korea, and the European Communities, and was found by the United States authorities, in 
April 2006, as deserving inclusion among an elite list of countries eligible to export poultry to the US .  
4.2 China emphasises that it has not initiated this dispute to force  the United States to import its 
poultry products. However, in preventing China from even being considered  under the normal 
approval rules and procedures, the United States is arbitrarily discriminating against Chinese poultry 
and violating a number of its obligations under WTO rules.  
2. The measures at issue 
(a) Section 727 of the Agriculture Appropriations Act 2009 
4.3 The first set of measures challenged in this dispute is Section 727 of the Agriculture 
Appropriations Act 2009  and any replacement measures, subsequent closely-related measures or 
future closely-related measures. Among such m easures are the 2010 Continuing Appropriations 
Resolution, and Section 743 of the Agriculture Appropriations Act 2010 . As Section 743 had not yet 
been signed into law at the time China submitted  its First Written Submission, China does not fully 
address it in this submission, but is of the initia l view that Section 743 violates the same WTO 
provisions as Section 727 and the moratorium. China reserves the right to more fully challenge, in later submissions, the compliance of Section 7 43 with the United States' WTO obligations.  
4.4 Section 727 is contained in an appropriations act  that allocated 'funds' for fiscal year 2009 
(1 October 2008 – 30 September 2009) . It prohibits appropriated funds
 from being used to establish or 
implement  a rule  allowing poultry products to be imported from China.77 
4.5 A 'rule' is first used to formally establis h a given country's eligibility to export poultry 
products to the United States.78  Rules then also provide the basis for the procedures used to 
                                                      
74 China's first written submission, para. 192, China's second written submission, para. 114. 
75 China's closing oral statement at the second substantive meeting, para. 7. 
76 United States' first written submission, para. 165, United States' second written submission, 
para. 125. 
77 Section 727, Agriculture Appropriations Act 2009  (Exhibit CN-1).  WT/DS392/R 
 Page 11 
 
 
 implement and maintain eligibility. They are established and implemented by the sole government 
department competent to establish or implement ru les relating to the importation of poultry – the US 
Department of Agriculture (USDA) and its subor dinate food safety agency, the Food Safety 
Inspection Service (FSIS). As Section 727 means that no funds can be expended by the sole executive 
branch department responsible for creating a nd implementing these rules on poultry imports from 
China, Section 727 limits the competitive opportun ities for Chinese poultry products and effectively 
restricts imports of Chinese poultry products to zero. 
4.6 Yet, at the same time, the USDA and FSIS can expend funds to implement existing rules and 
establish new rules permitting the import of poultry from  all other WTO Members. It is this arbitrary 
and blatant discrimination against China as compared to other WTO Members (and US poultry 
producers) that violates a number of WTO provisions. 
(b) Ongoing moratorium on the establishment or implementation of authorization for the 
importation of poultry products from China 
4.7 The second measure at issue is th e ongoing moratorium on: (a) the consideration  of 
applications for approval, (b) the granting  of approval, and (c) the implementation  of approval, for the 
import of poultry products from China under the US system for regulating the importation of poultry 
products. The moratorium was initiated followi ng the enactment of Section 733 of the Agriculture 
Appropriations Act  2008  and has been maintained by several su ccessive measures. It has operated on 
a multi-year basis in much the same way as Se ction 727 has operated during the 2009 fiscal year. 
Thus, the practical effect of the moratorium is to limit China's competitiv e opportunities for Chinese 
poultry products, and to restrict imports of Chin ese poultry products to zero, as compliance with the 
rules is a legal pre-requisite for the importation of poultry products into the United States. As the 
ongoing moratorium denies only China the right to benefit from the opportunity to export poultry 
products to the United States, the moratorium is  inconsistent with a number of WTO provisions. 
3. US regulations and procedures applicable to  the authorization of poultry products 
(a) US regulations and procedures 
4.8 The Poultry Products Inspection Act  (PPIA) constitutes the legislative basis for the import 
and inspection procedures relating to the import of p oultry products into the United States. Under the 
PPIA, the Secretary of Agriculture is author ized to make rules to implement the PPIA.79  These rules 
are detailed in section 381.196 of Title 9 of the Code of Federal Regulations  (CFR), and are enforced 
by FSIS. 
4.9 In accordance with 9 CFR § 381.196, elig ibility to export poultry products to the 
United States requires completing three sequential steps. First , in a 3 – 5 year procedure known as an 
"initial equivalence determinati on", the FSIS investigates whether the food safety measures of the 
exporting country are equivalent  to those employed by the United States.80  The FSIS investigation 
includes a document review stage and on-site audits. If equivalence is confirmed, this step culminates 
in the establishment of a rule in the CFR stating th at the country is eligible to export poultry products 
to the United States. Second , the eligible exporting country must certify individual establishments as 
fit to export to the United States. Finally , the third step involves a procedure known as "ongoing 
                                                                                                                                                                     
78 This occurs following an extensive, 3-5 year e quivalence determination that establishes whether an 
exporting country's poultry regulatory procedures are equivalent  to US poultry regulatory procedures. Process 
for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory Systems  (Exhibit CN-7). 
79 All imported poultry products are within the juri sdiction of the USDA. See the PPIA (Exhibit CN-4). 
80 Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory Systems , p. 
12 (Exhibit CN-7). WT/DS392/R 
Page 12  
 
 equivalence verification" whereby the eligible e xporting country submits to an ongoing program to 
maintain  eligibility to export to the United States. Li ke the initial equivale nce determination, it 
involves document reviews and on-site audits; it also  involves port-of-entry re-inspection of goods at 
the US border by FSIS.  
(b) Application of procedures before and after the moratorium 
(i) China 
4.10 China completed its first initial equivalen ce determination in April 2006. FSIS then 
established a rule placing China on the list of eligible importing countries for processed poultry products. This rule related only to poultry slaughter ed elsewhere and processed in China, as the 
equivalence determination did not extend to Chinese slaughter  inspection systems. However, the 
measures at issue prevent the FSIS from using any f unds to implement this rule, and thus no action 
has been taken by FSIS on its ongoing equivalence procedures.  
4.11 A second initial equivalence dete rmination concerning poultry slaughtered  in China was 
ongoing when the moratorium began in 2007. Review s and audits had been completed, and FSIS 
concluded that China's poultr y slaughter inspection system was equivalent to the US system. 
However, FSIS never issued a proposed rule due to the measures at issue. 
(ii) All other WTO Members 
4.12 While China's progress through its initial equi valence determination on slaughtered poultry 
was halted, FSIS imposed no similar moratorium for other WTO Members. There are nearly 20 other  
Members currently in various stages of their equiva lence determinations. Furthermore, there are nine 
other countries and territories currently authorized to export poultry products to the United States.
81  
FSIS has remained very active with respect those countries, including, e.g. conducting audits in 
eligible exporting countries. 
4. Legal analysis and argument 
4.13 The United States' refusal to apply its norm al FSIS approval procedures for imported poultry 
products with respect to China, while continuing to  consider, grant, and implement authorization to 
import poultry products from other WTO Memb ers, constitutes arbitrary and unjustifiable 
discrimination. Section 727 and the ongoing moratori um, which form the basis for the non-application 
of normal approval procedures, eliminate any competitive opportunities for China's poultry products in the United States. These measures, including the replacement measures, subsequent closely-related 
measures, and future closely-related measures, violate a number of WTO provisions. 
(a) Section 727 and the moratorium each violate Article I:1 of GATT 1994 
4.14 By denying only Chinese poultry products the opportu nity to be exported to the United States 
(through blocking Chinese access to FSIS procedures ), the measures at issue fail to accord poultry 
products originating in China immediately and unconditionally  the advantages  accorded to like 
poultry products  originating in all other Members. Consequently, they violate GATT Article I:1. 
4.15 Advantage : Poultry products from all WTO members have the competitive opportunity to be 
exported to the United States (the advantage), if pr oduced under an equivalent food safety system and 
if that finding is maintain ed by ongoing FSIS procedures – except Chinese poultry products. This is a 
denial of an advantage within the meaning of Article I:1.  
                                                     
 
81 Australia, Canada, Chile, France, Great Britain, Hong Kong, Israel, Mexico, and New Zealand.  WT/DS392/R 
 Page 13 
 
 
 4.16 Like Product : Section 727 and the moratorium apply exclusively to poultry products imported 
from China – i.e. they apply an origin-based produc t distinction. A hypothetical like product analysis 
is appropriate for measures that impose an origin-based distinction.82  
4.17 Unconditionally : Section 727 and the moratorium apply their conditions solely to Chinese 
poultry products, removing Chinese poultry from a ny chance to access the US market. Section 727 
and the moratorium thus do not operate on an  MFN basis, and do not unconditionally accord 
advantages to the like products of all WTO Members, in violation of Article I:1. 
(b) Section 727 and the moratorium each violate Article XI:1 of GATT 1994 
4.18 GATT Article XI:1 requires Members to eliminat e any 'prohibitions' or 'restrictions' on the 
importation of any product from any other Member. Section 727 and the moratorium each violate 
Article XI:1 because they impose restrictions on importation that negatively impact the competitive 
opportunities for poultry products from China. Each me asure also violates Article XI:1 by instituting 
de facto  prohibitions on imports of poultry from China. 
4.19 While other WTO Members may seek and obtain authorization under FSIS rules in order to 
export poultry products to the United States, Chin a cannot, as a result of the measures at issue. FSIS 
authorization is a necessary precondition for th e importation of any poultry products into the 
United States. Thus, the measures at  issue each eliminate China's co mpetitive opportunities in the US 
poultry market, constituting "restrictions" on Chinese impor ts within Article XI:1. Also, to the extent 
that the practical impact of the measures is an  import ban on Chinese poultry products, the measures 
each institute import prohibitions in violation of Ar ticle XI:1, by precluding the possibility of gaining 
the necessary FSIS authorization, therefore restric ting the importation of such products from China to 
zero. 
(c) Section 727 and the moratorium each violate Article 4.2 of the Agreement on Agriculture  
4.20 Article 4.2 of the Agreement on Agriculture  prohibits Members from instituting quantitative 
restrictions on agricultural products including pou ltry products. Section 727 and the moratorium are 
both inconsistent with Article 4.2 of the Agreement on Agriculture  because the measures result in the 
maintenance of quantitative restrictions on the importation of poultry products from China. The 
measures at issue each prohibit the application of  FSIS approval procedures to China, making it 
impossible for China to obtain the authorization th at is required in order to export poultry products. 
Thus, the volume of Chinese poultry products that ma y be imported is set at zero, and the practical 
impact is the maintenance of restrictions equivale nt to an import ban, a violation of Article 4.2. 
(d) Claims under the Agreement on the Application of Sanitary and Phytosanitary Measures  
4.21 China understands that the United States has not not ified the measures at issue to the WTO, as 
it would have been expected to do under Article 7 of the SPS Agreement  if it considered them 
SPS measures. Nevertheless, to the extent that th e measures may be considered to be sanitary and 
phytosanitary (SPS) measures within the SPS Agreement , China advances the following arguments. 
(i) To the extent they are SPS measu res, the measures are inconsistent with Article 2.3 of the 
SPS Agreement 
4.22 Article 2.3 of the SPS Agreement  prohibits Members from arbitrarily or unjustifiably 
discriminating between Members where identical or  similar conditions prevail. As Section 727 and 
                                                      
82 Panel Report, Colombia – Ports of Entry , para. 7.356; Appellate Body Report , Canada – Periodicals , 
pp. 20-21. WT/DS392/R 
Page 14  
 
 the moratorium discriminate between China and all other WTO Members without justification, 
Section 727 and the moratorium violate Article 2.3. 
4.23 There is a three-part test to establish a violation of Article 2.3. First,  the measure 
discriminates between the territory of the Member imposing the measure and that of another Member, or between two other Members. In this case, the measures at issue restrict only China from seeking 
and obtaining authorization to export poultry produc ts to the United States – clear discrimination 
against China. Second , the discrimination is arbitrary or unjustifiable. In this case, there is no 
scientific evidence, risk assessment, or other justification for treating Chinese poultry products 
differently from those of other WTO Members.  
4.24 Third, identical or similar conditions prevail in  the territory of the Members compared
83, 
i.e. China and all other poultry-exporting WTO Member s. A key "condition" that is "identical" is the 
scope and effectiveness of FSIS procedures, as a pplied to poultry products from all WTO Members. 
These rules are capable of determining whether poultry products from any Member are safe for 
importation into the United States. There is nothing unique to China with respect to the functioning and effectiveness of these rules. Thus, the measures at issue arbitrarily and unjustifiably discriminate 
against China in violation of Article 2.3. 
(ii) To the extent they are SPS measu res, the measures are inconsistent with Article 5.5 of the 
SPS Agreement 
4.25 Article 5.5 of the SPS Agreement  prohibits Members from applying different levels of 
sanitary protection to comparable situations. Th e higher level of SPS protection applied by the 
United States to China, reflected in Section 727 an d the moratorium, is arbitrary and unjustifiable and 
results in discrimination, in violation of Article 5.5 . 
4.26 There are three cumulative conditions that must be met in order to establish a violation of 
Article 5.5. First , the Member applies different levels of prot ection in different situations. In this case, 
the 'different situations' are (a) the importati on of poultry products from China, to which the 
United States applies restrictions resulting in an import ban; and (b) the importation of poultry 
products from all other WTO Members, to which the United States applies the FSIS equivalence 
procedures, reflective of a lower level of SPS protection. Second , the levels of protection show 
arbitrary or unjustifiable differences in their treatme nt of different situations. The application of such 
a high level of sanitary protection to China alone is arbitrary and unjustifiable. China could have the 
world's best food safety system, but the measures at issue would still operate to exclude Chinese 
poultry products from the consideration, granting, or implementation of authorization to export to the 
United States. Thus, the distinction in levels of sanitary protection is arbitrary and unjustifiable. Third , 
these arbitrary or unjustifiable differences lead to di scrimination or a disguised restriction on trade. 
Because the United States applies FSIS equivalen ce procedures to every other WTO Member while 
applying restrictions resulting in an import ban to China, the difference in sanitary protection results 
in "discrimination", fulfilling the third cumula tive element and establishing a violation of 
Article 5.5.
84  
(iii) To the extent they are SPS measures, the measures are inconsistent with Article 5.1 and 5.2 of 
the SPS Agreement 
4.27 Article 5.1 requires Members to ensure that any SPS measures are based on a risk assessment, 
and Article 5.2 sets out the criteria which Members must take into account when conducting said risk 
assessment. There is no publicly-available documen tation indicating that Section 727 and the 
                                                      
83 Panel Report, Australia – Salmon (Article 21.5 – Canada),  para. 7.111. 
84 Appellate Body Report, EC – Hormones, paras. 214-215.  WT/DS392/R 
 Page 15 
 
 
 moratorium are based on any risk assessment addressing Chinese pou ltry, let alone a risk assessment 
within the meaning of Article 5.1 and 5.2. Furtherm ore, available evidence suggests that the measures 
at issue would not be supported by the likely c onclusions of a risk assessment conducted pursuant to 
Article 5.1 and 5.2. Indeed, the USDA had concluded in 2006, prior to the moratorium, that Chinese 
poultry products are safe for importation. In add ition, since December 2007, Chinese poultry has been 
exported to other Members applyi ng high levels of SPS protection, including the EC, Japan and 
Korea. 
(iv) To the extent they are SPS measu res, the measures are inconsistent with Article 2.2 of the 
SPS Agreement  
4.28 Article 2.2 requires that Members ensure that  SPS measures are maintained on the basis of 
sufficient scientific evidence. As Section 727 and the moratorium are maintained without any 
scientific basis, the measures violate Article 2.2. The Appellate Body has interpreted Article 2.2 to 
require "a rational and objective relationship between the SPS measure and the scientific evidence".85  
Nothing in the texts or legislative contexts of th e measures, or in publicly-available documentation, 
indicates that the measures at i ssue were enacted on the basis of  any scientific evidence, let alone 
evidence sufficient to meet the st andards of Article 2.2 of the SPS Agreement.  
(v) To the extent they are SPS measu res, the measures are inconsistent with Article 5.6 of the 
SPS Agreement 
4.29 Article 5.6 requires that SPS measures are not more trade-restrictive than necessary. The 
measures at issue are inconsistent with the obligation in Article 5.6, as they are significantly  more 
trade-restrictive than necessary. The footnote to Ar ticle 5.6 clarifies that a measure is more trade-
restrictive than required if: First, there is another measure reasonably available to the Member 
imposing the SPS measure. In this case, the alternativ e measure is the FSIS equivalence procedures. It 
is technically and economically feasible, as it is a pplied on a regular basis to all other WTO Members. 
Second , the alternative measure achiev es the Member's appropriate level of SPS protection. The FSIS 
procedures clearly meet the US' "appropriate level of  protection" for poultry imports as the US applies 
it to all WTO Members except for China. Third,  the alternative measure is significantly less restrictive 
to trade than the contested measure.86  The application of the FSIS procedures would be significantly 
less trade-restrictive than the measures at issue, as it would provide the possibility  of obtaining 
authorization to export to the US instead of a restricti on automatically resulting in an import ban. As 
the alternative measure meets all three criteria,  the measures at issue violate Article 5.6. 
(vi) To the extent they are SPS measures, the measur es are inconsistent with Article 8 of the 
SPS Agreement 
4.30 Article 8 requires that Members observe the provisions of Annex C when applying control, 
inspection, and approval procedures. The United Stat es, in unduly delaying the application of the 
FSIS procedures to Chinese poultry imports by in stituting Section 727 and the moratorium, has 
violated Article 8 of the SPS Agreement . Annex C(1)(a) obliges Members to "undertake and 
complete" the procedures for assessing compliance with  an SPS requirement "without undue delay" or 
"with no unjustifiable loss of time ".87 Section 727 and the moratorium  unduly delay the application of 
the normal FSIS procedures to China. The delay cannot be justified on any ground, constituting a 
violation of Article 8.  
                                                      
85 Appellate Body Report, EC – Hormones , paras. 180, 193. 
86 This approach was affirmed by the Appellate Body in Australia – Salmon , para. 194. 
87 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1495. Emphasis added. WT/DS392/R 
Page 16  
 
 5. The US Preliminary Ruling Request must fail, as consultations pursuant to the 
SPS Agreement  were requested and held 
4.31 In its Preliminary Ruling Request, the United Stat es contends that any claims made by China 
pursuant to the SPS Agreement  are outside the scope of the Panel's terms of reference, as the claims 
were presented in the alternative/conditionally. Ho wever, China's consultations request specifically 
invoked Article 11 and devoted fully 303 of the 9 89 words of the request to claims under the 
SPS Agreement . Alternative claims are also "very common in WTO dispute settlement".
88  
Furthermore, had China's claims under the SPS Agreement  been raised without presenting them in the 
alternative/conditionally, it could have been u sed as an admission against China's interests. Any 
efforts by the United States to place China in that  untenable position must fail, as must any reading 
that would render over 30% of this critical document entirely meaningless. 
4.32 Furthermore, nowhere in its preliminary ruling request does the United States allege that its 
due process rights have been impacted by China's c onsultations request and in fact, the United States 
seems to acknowledge that its request h as nothing to do with due process rights.89 Given that a key 
purpose of a consultations request is that a r esponding member "is fully informed about [the 
complainant's] intention" (providing for due process)90, this is a notable admission.  
(a) China's consultations request clearly invoked Article 11 of the SPS Agreement  
4.33 Consultations in this dispute were, in f act, requested pursuant to Article 11 of the 
SPS Agreement . The core of the US argument appears to re late to China's use of the phrase "if it were 
demonstrated that any such measure is an SPS m easure". However, that phrase simply shows that 
China was contemplating a "bilateral diplomatic di alogue" to better delineate the dispute. Also, under 
Article 4.2 of the DSU, "sympathetic consideration" must be given to " any representations" made by 
China – including  those framed as alternative arguments. 
4.34 Contrasting the requirements of Article 4.4 of the DSU (on consultations requests) with the 
heightened requirements of Article 6.2 (on pane l requests) also shows China has fully met its 
obligations under Article 4.4 states that  a consultations request "shall give ... an indication  of the legal 
basis for the complaint". In contrast, 6.2 states that  a panel request must "provide a brief summary of 
the legal basis of the complaint sufficient to present the problem clearly ". The heightened burden for 
panel requests reflects the understanding that the legal bases of a claim often evolve during 
consultations. The Article 4.4 requirement to provide an " indication " (a "hint, suggestion"91) was 
clearly met, as by devoting over 30%  of the document to SPS claims, there is no doubt that China 
provided the United States with the requisite "hint" that the SPS Agreement  was at issue in 
consultations. 
(b) Pursuant to its consultations request, China actually consulted regarding the SPS Agreement , 
and in a manner fully consistent with Article 4 of the DSU 
4.35 China actually  consulted on the SPS Agreement . China provided the United States with over 
40 questions to be answered during consultation, includ ing at least 8 that sought to clarify whether the 
measures at issue were considered  SPS measures by the United States.92  The panel in Korea – 
                                                      
88 Panel Report, Korea – Commercial Vessels , para. 7.2 at subparagraph 29. 
89 US Preliminary Ruling Request, para. 17. 
90 Panel Report, Chile – Price Band System , para. 7.120. 
91 Lesley Brown, (ed.), The New Shorter Oxford English Dictionary , Clarendon Press, 1993, Vol. 1, 
p. 1348. 
92 (Exhibit CN-39).  WT/DS392/R 
 Page 17 
 
 
 Commercial Vessels  accepted questions posed in consultati ons as "alone ... sufficient for us to 
conclude that the parties consulted on the entirety of the measure".93 
4.36 Furthermore, the US assertion that its representa tives explained during c onsultations that the 
United States "was not  consulting pursuant to Article 11 of the SPS Agreement "94 is irrelevant to the 
Panel's terms of reference. A responding party can no t unilaterally control the jurisdiction of a panel. 
Indeed, Article 4.3 of the DSU provides that wher e a respondent refuses consultations a complainant 
may proceed more  quickly  to a panel. It does not indicate that a refusal somehow makes it impossible 
for the complainant to establish a panel with terms of reference that encompass measures stated in 
their consultations requests. 
4.37 For the foregoing reasons, China requests the Pa nel to reject the US preliminary ruling 
request and determine that China's claims under the SPS Agreement  are properly within the Panel's 
jurisdiction. 
B. EXECUTIVE SUMMARY OF THE FIRS T WRITTEN SUBMISSION OF THE UNITED  STATES  
1. Introduction 
4.38 In 2007, adulterants added to pet food ingredie nts by Chinese producers led to the deaths of 
thousands of US domestic animals. In 2008, adulte rants added to milk by Chinese processors sickened 
hundreds of thousands of persons, and led to the de aths of over a dozen children. The contamination 
of these products was not allowed under China's food safety laws. Rather, these food safety crises arose from massive failures in China's system of food safety enforcement. Earlier this year China 
attempted to address these and other enforcement failures by adopting a comprehensive overhaul of 
its food safety regime.  
4.39 In response to failures of food safety enforcemen t in China, and in the context of pending 
administrative proceedings concerning the authorizati on of the import of poultry products from China, 
the US Congress enacted Section 727. Section 727 impo sed a six and a half month funding restriction 
that prevented the establishment or implementa tion of rules approving the importation of poultry 
products from China, thereby ensuri ng an additional time period for review of food safety issues 
relating to China. Section 727 expired on 30 Sept ember 2009, and the funding restriction has been 
lifted as of 12 November 2009. Accordingly, US food safety regulators no longer face any restriction on the establishment or implementation of such rules.  
4.40 The temporary, now-expired, funding restriction was a measured reaction to China's major 
problems of food safety enforcement. Section 727 falls squarely within the GATT Article XX(b) 
exception for measures necessary to protect human or an imal life or health and meets the elements of 
the Article XX chapeau. It imposes no arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail; indeed, no othe r country subject to a US poultry-product safety 
assessment had major crises of food safety enfor cement. And Section 727 was not an instance of a 
disguised restriction on trade. In fact, the US pou ltry industry opposed it. Thus, Section 727 is not 
inconsistent with any US oblig ations under the GATT 1994.  
4.41 The United States disagrees with most of the factual and legal assertions in China's first 
written submission and has two over-arching comments . First, China's submission repeatedly asserts 
that "This is a case about arbitrary discriminati on."  China, however, is well aware of its own 
problems of food safety enforcement, and of the food safety rationale for the temporary restriction imposed by Section 727. Yet, China's submission addresses none of these issues – indeed, it 
                                                     
 
93 Panel Report, Korea – Commercial Vessels , para 7.2, at subparagraph 11. 
94 US Preliminary Ruling Request, para. 9. WT/DS392/R 
Page 18  
 
 misleadingly implies that Section 727 was adopted only for "budgetary" reasons. Thus, despite its 
repeated assertions of "arbitrary discrimination," Ch ina's submission fails to explain why any alleged 
discrimination resulting from Section 727 was arbitr ary or unjustifiable. Instead, China runs away 
from the food safety issues that lie at the core of this dispute.  
4.42 Second, China's submission repeatedly mi scharacterizes Section 727 as "denying access" to 
the US procedures for authorizing the import of pou ltry products. Yet Section 727 had no such effect. 
Instead, it allowed ongoing work on the evaluation of food safety issues involving poultry products from China, and only restricted the establishment or  implementation of rules authorizing importation. 
Even in the absence of Section 727, China has no  basis for asserting that China necessarily would 
have succeeded in obtaining such authorizations. In  any event, the restriction on the establishment or 
implementation of rules authorizing importation has now been removed, and the ongoing work 
continues. Thus, China overstates the effect of Section 727.  
4.43 Finally, any claims by China under the SPS Agreement  are not within the Panel's terms of 
reference. In its submission, China fails to rebut  the fundamental point that China did not request 
consultations on any claims under the SPS Agreement . The United States has offered to cooperate on a 
procedural way forward in the event China would wish to consult on any SPS claims. However, China 
– perhaps for the same reason that its submission fails even to acknowledge any relationship between 
Section 727 and food safety – has denied the offer. This is China's choice. But China cannot have it 
both ways – it cannot refuse to consult on SPS issues, while at the same time request that the Panel 
issue findings under the SPS Agreement . 
2. Section 727 is the only measure at issue in this dispute 
4.44 The argumentation in China's submission is a ddressed to alleged inconsistencies between 
Section 727 and provisions of the WTO Agreemen t. However, China also asserts that two other 
measures – an alleged "moratorium" and Section 743 of the 2010 appropriations bill – are inconsistent 
with the WTO Agreement. These assertions do not a nd cannot expand the scope of this proceeding. 
The alleged "moratorium" does not exist, and the subsequent appropriations provision is not in the 
Panel's terms of reference.  
4.45 China alleges the existence of "the moratorium". In particular, China alleges the existence of a 
measure that " indefinitely  suspends: (a) the consideration of app lications for approval, (b) the granting 
of approval, and (c) the implem entation of approval for the import of poultry products from China 
under the United States system for regulating the impor tation of poultry products". No such measure 
ever existed.  
4.46 China puts forth only two types of evidence to support its allegation, and neither shows the 
existence of an indefinite moratorium. First, Chin a cites two related pieces of legislation: Section 733 
(affecting fiscal year 2008) and Section 743 (affe cting fiscal year 2010). Section 733 contains the 
same language as Section 727 and is also of lim ited duration. The fact that a time-limited funding 
restriction was created twice does not show the existence of an "indefinite" suspension of approvals. 
There is no basis for deriving a separate, distinct measure from the existence of discrete, time-limited 
measures. Moreover, Section 743 lifts any funding rest riction. Thus, China fails to show the existence 
of an indefinite moratorium on approvals. The only other evidence China cites to support its 
allegation is that FSIS has not yet authorized the importation of poultry from China. This absence of 
an authorization is not separate from Section 727.  
4.47
 Finally, the alleged second measure was not identif ied in China's consultations request. As the 
Appellate Body has explained, DSU Articles 4 a nd 6 "set forth a process by which a complaining 
party must request consultations, a nd consultations must be held, befo re a matter may be referred to 
the DSB for the establishment of a panel". Although  these provisions do not "require a precise and  WT/DS392/R 
 Page 19 
 
 
 exact identity between the specific measures that were the subject of consultations and the specific 
measures identified in the request for the estab lishment of a panel", the Appellate Body has 
emphasized that any such measures not precisely identified must not "change the essence of the [measures identified in the request for consultati ons]". The so-called "moratorium" of indefinite 
duration does not, however, constitute such a measure whose "essence" is the same as the explicitly 
time-limited restriction in Section 727.  
4.48 China's attempt to bring this second measure before  this Panel also runs afoul of the Appellate 
Body's concern that a complaining party must "not  expand the scope of the dispute" in its panel 
request beyond the matter identified in the consulta tions request. The allegation of the "moratorium" 
would indeed expand the scope of the dispute beyond the measure identified in the request for 
consultations. Accordingly, the United States respectf ully requests the Panel to find that the alleged 
"moratorium" is outside the terms of reference of this Panel proceeding. 
4.49 China's submission states that China has the "initial view" that Section 743 violates WTO 
provisions, and "that [China] reserves the right to more fully challenge, in later submissions, the 
compliance of Section 743 with the United States' WTO obligations". The States does not understand 
how or why China would argue that Section 743 is WTO-inconsistent as Section 743 has resulted in a 
removal
 of the funding restriction contested by China. In any event, however, Section 743 is not 
within the Panel's terms of reference.  
4.50 Here, China issued its consultation request on April 17, 2009, and Section 743 was adopted 
on 21 October 2009 – over six months later. Furtherm ore, the language of 743 evolved over time. The 
version enacted differed from versions under cons ideration at the time of panel establishment. 
Accordingly, China's request for consultations  did not (and could not) specifically identify 
Section 743, and it was impossible for the parties to consult on its provisions.  
4.51 Finally, although Section 743 is generally rela ted to Section 727 in that it also involves 
funding for the implementation and establishment of  rules governing importation of poultry products 
from China, Section 743 plainly changes the essence of Section 727. While Section 727 imposed a 
temporary funding restriction, the enactment  of Section 743 has resulted in a removal  of the 
restriction. Indeed, the fact that China's first subm ission only manages to state cursory, "initial views" 
on the WTO-consistency of Section 743 highlights the fundamental differences between the newly 
adopted Section 743 and Section 727. 
3. China mischaracterizes the legal effect of Section 727 in US domestic law 
4.52 China asserts that Section 727 has the effect of banning imports of poultry from China. 
Further, China asserts "This funding restriction mean s that FSIS cannot engage in activities related to 
the establishment or implementation of any rule allowing Chinese poultry to enter the United States". 
China's characterization of the measure is incorr ect as it fails to take account of the "scope and 
meaning" of legislative conditions contained in appr opriations legislation in US law generally, and of 
the particular conditions containe d in Section 727 specifically.  
4.53 When Congress inserts funding restrictions into appropriations legislation, it is exercising its 
oversight power over the executive branch. As such, each funding restriction is limited to its terms 
and only applies to the fiscal year covered by the appropriation. In addition, the funding restriction 
does not amend or modify the permanent law administ ered by an executive agency, and therefore, it 
does not prevent the agency from taking actions re lated to the prohibited act as long as the agency 
does not take the prohibited act itself.  
4.54 Accordingly, Section 727 was limited to  preventing USDA from "establishing" or 
"implementing" a rule allowing the import of poultry from China for a temporary period during the WT/DS392/R 
Page 20  
 
 2009 fiscal year. Section 727 did not create a permanent funding restriction or prohibit FSIS from 
using funds to implement or establis h a rule after its expiration. Th ere are no longer any restrictions 
on FSIS's ability to "use funds to implement or establish a rule allowing poultry products to be 
imported from China". 
4.55 Section 727 also did not ban imports of poultry from China. Even without Section 727, 
USDA procedures required a review of the prior equivalence determinati on before imports of 
processed poultry could have been authorized due  to a substantial time period between the 2006 
processed poultry rule and China's designation of f acilities eligible to export to the United States. 
With respect to slaughtered poultry, USDA had not  completed an equivalen ce determination. Thus, 
the most that China can allege is that Section 727 prevented USDA from taking final actions during 
fiscal year 2009 that might  have otherwise occurred; China has no basis for alleging how, if at all, any 
final actions would have di ffered during that period.  
4.56 Finally, Section 727 did not prevent FSIS from engaging in activities under the Poultry 
Products Inspection Act ("PPIA") related to the estab lishment or implementation of a rule allowing 
China to export poultry to the United States. Rath er, Section 727 directed FSIS to engage in work 
related to China's equivalency application, and FSIS did in fact engage in this work during the 2009 
fiscal year.  
4. Of the three claims presented by China, the Panel need only consider the claim under 
Article XI of the GATT 1994  
4.57 The Panel's consideration of China's Artic le XI claim (and any needed defense under 
Article XX(b)) would serve to resolve this dispute.  Accordingly, the Panel should not and need not 
make substantive findings under China's Article I or Agreement on Agriculture  claims.  
4.58 China has not provided any basis for the Panel to make a finding under Article I:1. China's 
Article I claim misses the point, because it fails to  recognize that Section 727 has no independent 
meaning, but only has meaning in the context of the overall operation of an equivalency-based food-
safety regime under the PPIA. China does not
 challenge the PPIA, nor the right of a WTO Member to 
establish such equivalency-based regimes for the purposes of ensuring food safety. Yet, under an 
equivalency-based regime, products  of different WTO Members are necessarily treated differently. 
Products of Members found to be equivalent may be imported, while  similar products of Members not 
yet found equivalent may not be imported.  
4.59 Section 727 temporarily prevented USDA from im plementing or establishing a rule finding 
equivalence for poultry imports from China to ensure that additional safety issues could be evaluated. 
Section 727 is specific to one WTO Member, but so  are many actions taken in implementing an 
equivalency-based food-safety regime. For example – a finding of equivalence, a failure to make a 
finding of equivalence, and a delay in making a fi nding to allow for further evaluation – all affect 
products of some WTO Members differently than apparently similar produc ts of others. Thus, 
Section 727 is not inconsistent with MFN obligati ons because any differential treatment results from 
the underlying adoption of an equivalency-based  regime that differentiates among WTO Members 
based on each Members' particular food safety status.  
4.60 China's Article I claim also lacks essential lega l and factual argumentation. China provides no 
explanation for why poultry products from China ar e "like products" to poultry products from other 
WTO Members, including those authorized to expo rt poultry products to the United States. While 
China correctly notes that some panels have consid ered that a measure that distinguishes between 
products solely on the basis of origin can be consid ered to provide less favourable treatment to certain 
like products without the need for a separate "like pr oduct" analysis, none of those reports has applied 
this approach to a situation like this one. Health and safety systems vary from country to country and  WT/DS392/R 
 Page 21 
 
 
 equivalency-based regimes respond to this fact. To be sure, China may believe that its poultry 
products present no particular safety issues as compared to products from any other WTO Member. But if so, that is an unsupported factual allegati on which the United States does not accept, and there 
is no basis to assume it is true. Moreover, Ch ina conveniently igno res disputes such as EC-Asbestos, 
in which a panel examined issues of "likeness" in the context of products with different levels of 
safety. 
4.61 However, the Panel need not address factual and legal issues under Article I to reach a 
resolution of this dispute. In particular, the core  of this dispute involves whether Section 727 is 
justified by legitimate concerns with human and anim al life and health. The most appropriate analytic 
framework to consider these is sues is to examine the measure under Article XI, followed (if 
necessary) by findings under Article XX(b). If the me asure is justified by Article XX(b), such a 
finding would excuse any alleged br each of Article I. It would not promote the resolution of this 
dispute to venture into issues under Article I c oncerning its application to equivalency-based 
regulatory regimes or to the likeness of produc ts with different levels of safety.  
4.62 China has the burden of establishing the elemen ts of the alleged breach of Article XI:1. 
However, if the Panel were to find the existence of  an import restriction, such a finding would not be 
unusual or a matter of systemic concern. The natu re of many health and safety regulations is to 
impose import restrictions. As Article XX(b) states , "nothing in [the GATT 1994] shall be construed 
to prevent the adoption or enforcement ... of measure s necessary to protect human, animal or plant life 
and health". Section 727 meets all of the requirements of Article XX(b).  
4.63 Article 4.2 of the Agreement on Agriculture  prohibits certain measures with respect to 
agricultural products. Article 4.2 provides that, with certain exceptions not relevant here, "Members 
shall not maintain, resort to, or revert to any m easures of the kind which have been required to be 
converted into ordinary customs duties". Footnote 1 to the Agreement on Agriculture  provides an 
illustrative list of measures subject to the prohibiti on in Article 4.2, as well as an illustrative list of 
measures to which the prohibition does not apply. 
4.64 Footnote 1 specifically excludes from the scope of  Article 4.2 "measures maintained under ... 
general, non-agriculture-specific provisions of [t he] GATT 1994". Section 727 is a measure that the 
United States maintains consistently with GATT Ar ticle XX(b), which is a "general, non-agriculture-
specific provision" of the GATT 1994. Therefore, Article 4.2 does not apply to Section 727, and the United States did not act inconsistently with Article 4.2. 
5. Section 727 is justified pursuant to GATT Article XX(b) 
4.65 To justify a measure under Article XX(b), th e Appellate Body has explained that the 
responding party must demonstrate the measure (1) falls under the scope of the Article XX(b) 
exception and (2) satisfies the requirements of the Ar ticle XX chapeau. Two elements must be met for 
a measure to fall under the scope of the Article XX (b) exception: (1) the policy in respect of the 
measure for which the provision is invoked must fall  within the range of policies designed to protect 
human, animal, or plant life or health; and (2) th e inconsistent measure for which the exception is 
invoked must be necessary to fulfil the policy objective. 
4.66 To determine whether a measure pursues a polic y objective of protecting human and animal 
life and health, the Panel should first consider whet her a risk to human and animal life and health 
exists. If a risk is found to exist, the Panel s hould determine whether the policy objective underlying 
the measure is to reduce that risk. If so, the Pane l should conclude that the measure's policy falls 
within the range of policies designed to protect hu man and animal life or health in accordance with 
Article XX(b).  WT/DS392/R 
Page 22  
 
 4.67 It is clear that there is a risk to human and animal life and health from the importation of 
poultry products from China. This risk results from the inherent danger of consuming poultry not 
produced under sanitary conditions or inspected for contaminants, the risk from the import of poultry 
infected with avian influenza, and the particular risk that exists when importing food from China due 
to China's history of food safety scanda ls and longstanding systemic issues.  
4.68 First, notwithstanding country of origin, it is well established that poultry products can 
contain pathogenic bacteria and contaminants wh ich can pose a potential risk to human life and 
health. Because it is impossible for FSIS to test all products at the border, FSIS's equivalence process 
is designed to ensure that poultry products ar e "subject to inspection, sanitary, quality, species 
verification, and residue standards that achieve a level of sanitary protec tion equivalent to that 
achieved under US standards and have been processe d in facilities and under c onditions that achieve a 
level of sanitary protection equivale nt to that achieved under US standa rds" before they are allowed to 
be imported into the United States. It is notewor thy that FSIS's equivalence process under the PPIA is 
not being challenged by China. 
4.69 It is also well established that imported poultr y can pose a risk to human and animal life and 
health if the poultry is infected with a serious di sease, such as avian influen za. If poultry or poultry 
products infected with this disease entered the Unite d States, this could significantly threaten human 
and animal life and health. Again, it is noteworthy that China is not challenging APHIS's restrictions 
on the import of poultry from regions such as China that are classified as a region where the highly 
pathogenic avian influenza HPAI subtype H5N1 is considered to exist.   
4.70 Third, the risk is exacerbated by significan t problems with China's food safety system. 
China's food safety issues have been the subject  of numerous studies by international agencies, 
governmental bodies, and academics noting China's disorganized governmental structure and its 
ongoing systemic problems with smuggling, corrup tion, and the inadequate enforcement of food 
safety laws. China has also been the source of mu ltiple food safety scandals, many of which have 
occurred recently and have been directly related to China's systemic problems.  
4.71 FSIS's experience with China during the equiva lency process also highlighted problems with 
China's food safety system. FSIS found deficiencies in two of the four processing plants and serious sanitation problems in all three slaughter plants it visi ted in 2004. In addition, all four slaughter plants 
FSIS visited during 2005 failed to meet US standards.  
4.72 Section 727 was enacted with the policy objective of protecting against th is risk to human and 
animal life and health posed by the importation of  poultry products from China. The first sentence of 
the Joint Explanatory Statement ("JES") accompanying Section 727 makes that clear: "There remain 
very serious concerns about contaminated foods from China and therefore the bill retains language 
prohibiting FSIS from using funds to move forward w ith rules that would allow for the importation of 
poultry products from China into the U.S.". Sim ilarly, the Committee Report accompanying the 
FY 2008 appropriations act also clearly demonstrates  that Section 727's purpose is to protect human 
and animal life and health. 
4.73 Statements by Section 727's author, Representa tive DeLauro, also indicate the measure was 
enacted to address this risk: "It is clear that the 2006 FSIS declaration that China's safety and 
inspection system was, quote, equivalent to the US system for processed poultry products, was based 
on trade goals. From a public health and safety persp ective, the equivalency determination was deeply 
flawed and cannot be relied on to pr otect US consumer's safety."   
4.74 Section 727 was also necessary to protect human and animal life and health from this risk. 
Imports of poultry from China pose a severe risk as a result of the broad systemic problems with 
China's food safety system. These problems include  smuggling, corruption, and the inadequate  WT/DS392/R 
 Page 23 
 
 
 enforcement of China's food safety laws, issues that  FSIS is not typically faced with when making 
equivalency determinations . Moreover, many food safety scandals ha ve originated in China in recent 
years, including the melamine scandal that occurre d in 2008 after FSIS issued a final rule on the 
equivalency of China's poultry processing sy stem. Finally, some members of Congress were 
concerned about the process FSIS followed and believed that FSIS had not spent enough time 
considering the particular problems with food safety in China.  
4.75 Given this situation, it was necessary to pause the equivalency process so that FSIS could 
thoroughly consider the particular risks posed  by poultry products from China as well as the 
implications of recent food safety scandals and the overhaul of China's food safety regime that 
resulted from them.  
4.76 The congressional enactment of Section 727 play ed a role analogous to an administrator or 
supervisor in a governmental agency who has the responsibility of reviewing (and, where appropriate, 
questioning) a decision made within the agency and as king for it to be considered at greater length in 
light of recent developments before moving forwar d. In fact, had a USDA administrator taken the 
same action as Congress did here to pause the proces s and evaluate the facts after becoming aware of 
new food safety scandals, it is unlikely that th is dispute would be before this Panel. The 
administrator's action would have been viewed as reasonable and routine. 
4.77 Likewise, Section 727 was reasonable and routin e. Congress had many legitimate health and 
safety reasons to be concerned about the import of  poultry products from China and was taking the 
necessary action to ensure that all of these issu es were addressed before FSIS moved further. 
Accordingly, Section 727 was necessary to pr otect human and animal life and health.  
4.78 The Panel should reach the same conclusion if it follows the method used by past panels 
when faced with the question of whether a measure  is necessary. Other panels have engaged in "a 
process of weighing and balancing a series of fact ors," which include (1) the importance of the 
interests or values at stake; (2) the contribution made  by the measure to its objective; and (3) the trade 
restrictiveness of the measure.  
4.79 The first factor strongly weighs in favour of a determination that Section 727 was necessary. 
Section 727 was enacted to protect human and anim al life and health from the risk posed by the 
import of poultry from China, including protection from the risks of eating poultry products not prepared in sanitary conditions or contaminated with disease. In Brazil-Tyres , the panel noted "the 
objective of protecting human health and life agai nst life-threatening diseases ... is both vital and 
important in the highest degree."  The United States agrees. The risks posed to human life and health 
by consuming potentially contaminated poultry from China is of utmost importance as is the need to 
protect animal life and health from the threat of avian influenza.  
4.80 The second factor also favours a determination that Section 727 was necessary. Section 727 
has directly contributed to the protection of human and animal life and health by ensuring FSIS did not implement or establish a rule without focusing on the risks posed by China's food safety system or 
reexamine the issue in light of China' recent food safety scandals. Further, Section 727 also directed 
FSIS to develop an action plan to address food safet y issues with China. As  a result, Section 727 
materially contributed to its objective of protecti ng human and animal life and health from the risk 
posed by consuming imported poultry products from China. 
4.81 Section 727's limited trade restrictiveness also favours a determination that it was necessary. 
Because Section 727 was an appropriations measure,  it did not change the un derlying law and only 
applied temporarily. As the funding restriction has b een lifted, FSIS is now able to move forward on 
implementing the rule for processed poultry produc ts or establishing a rule for cooked poultry 
products if it determines that this is the a ppropriate action to take under the PPIA.  WT/DS392/R 
Page 24  
 
 4.82 Section 727 also only applied to the implementa tion or establishment of a rule regarding the 
importation of poultry products from China. It  did not restrict FSIS from taking actions related  to the 
importation of poultry products, such as the developm ent of an action plan that contemplated the 
possibility of future imports and was designed to a llow FSIS to move forward expeditiously when the 
funding restriction was lifted.  
4.83 Additionally, even in Section 727's absence, it is highly unlikely that China could have 
exported any significant quantity of poultry products to the United States. While FSIS's equivalency determination for China's processed poultry inspec tion system would allow imports of processed 
poultry product from China (including raw process ed as well as cooked processed poultry product), 
China would only be able to export poultry that w as fully cooked due to APHIS's restrictions on 
countries with avian influenza. Moreover, since FSIS has not found China's slaughter inspection 
system equivalent, any cooked poultry exports fro m China would have to be produced from poultry 
slaughtered in the United States or another country with an equivalent slaughter inspection system. 
Trade under these circumstances is likely to be limited. 
4.84 To justify a measure under Article XX(b), th e responding party must also show that the 
measure meets the requirements of the Article XX chapeau. To do so, the Appellate Body has 
explained that the responding party must demonstrate that its measure (1) is not a means of arbitrary 
or unjustifiable discrimination between countries wher e the same conditions prevail; or (2) a disguised 
restriction on international trade. 
4.85 Previous Appellate Body reports have explained that a measur e will be considered to be 
applied in a manner that results in arbitrary or unju stifiable discrimination if: (1) the application of the 
measure results in discrimination; (2) the discrimination is arbitrary or unjustifiable in character; and 
(3) the discrimination occurs between count ries where the same conditions prevail.  
4.86 These conditions are not met. Although Section 727 only applies to imports from China, it did 
not discriminate against Chinese products in an arb itrary or unjustifiable way. To show that any 
discrimination to a particular country is not "arbitr ary or unjustifiable," past panels have required the 
responding party to show that its action is not "capricious or random."  The panel in Brazil-Tyres  also 
noted that an analysis under this element should focus "on the cause of the discrimination, or the rationale put forward to explain its existence."  T hus, a responding party must provide a rationale for 
the measure that is not caprici ous, random, or indefensible.  
4.87 There was a strong rationale for Section 727.  There are many legitimate concerns about 
China's food safety system, and the equivalency pro cess needed to be paused to give FSIS additional 
time to consider and address these concerns, includi ng the food safety scandals that occurred after the 
final determination was made on a rule for processed poultry. Given this situation, it was certainly not 
arbitrary or capricious for Congress to exercise its oversight role.  
4.88 In addition, there is no other country where the same conditions prevailed as they did for 
China at the time Section 727 was enacted. Besides China, there w as no other country as far along in 
the equivalency process with recent food safety sca ndals and systemic pr oblems with smuggling, 
corruption, and enforcement. Since no other country has presented the same set of challenges that the 
US government faced with regard to China at the time of Section 727's enactment, there is no other 
country where it can be said that the same conditions prevail.  
4.89 Finally, the evidence clearly demonstrates that Section 727 is not a disguised restriction on 
trade. The text of the measure, which states "There  remain very serious concerns about contaminated 
foods from China and therefore the bill retains la nguage prohibiting FSIS from using funds to move 
forward with rules that would allow for the impor tation of poultry products from China into the U.S."  WT/DS392/R 
 Page 25 
 
 
 clearly indicates that the measure's policy objective, or intent, was to protect human and animal life 
and health from the risk of poultry from China. 
4.90 Further, the fact that the JES directs FSIS to take actions related to the rulemaking also 
demonstrates the measure was not enacted with protectionist intent. If Section 727's intent were to 
restrict trade, it would not have included language  setting the stage for expeditious action on China's 
equivalency application as soon as it expired. Statem ents by members of Congress further support the 
view that the policy objective of the measure was to  protect human and animal life and health, not to 
protect a domestic industry. In this respect, th e widespread opposition to the measure from the US 
poultry industry is relevant. On 30 April 2009, 56 companies and trade associations representing the 
domestic industry wrote a letter to President  Obama asking him to oppose Section 727. If 
Section 727's purpose were to protect the domestic indus try, it is unlikely that many of the industry's 
most influential members would be opposed.  
6. China has not made a prima facie case in support of its claims under the SPS Agreement   
4.91 China's SPS claims are outside the Panel's terms of reference. Further, China fails to make a 
prima facie case in support of its claims. 
4.92 In particular, China fails to demonstrate – or even to assert – that Section 727 is an 
SPS measure subject to the SPS Agreement . To demonstrate that a measure is inconsistent with a 
particular provision of the SPS Agreement , it is necessary first to show that the measure is an 
SPS measure that is subject to the particular provisi on with which an inconsis tency is claimed. China 
makes no such showing with respect to Section 727 or any of SPS provisions it cites. 
4.93 Indeed, China frames its complaint by asserting that, "to the extent  that Section 727 and the 
moratorium may  be considered to be sanitary and phytosan itary measures within the meaning of the 
SPS Agreement , such measures would  be inconsistent with Articles 2.3, 5.5, 5.1, 5.2, 2.2, 5.6 and 8 of 
the SPS Agreement ."  In other words, China claims merely that if  Section 727 is subject to the cited 
provisions of the SPS Agreement , then it would be inconsistent with them. But China does not assert 
that Section 727 is, in fact, subject to any of th ese provisions. Rather, China expressly avoids making 
such any assertion.  
4.94 China explains that it framed its claims under the SPS Agreement  as conditional claims or 
claims in the alternative. According to China, it considered that the United States might invoke 
Article 2.4 of the SPS Agreement  in order to defend Section 727,  and if so, it would be for the 
United States to "meet the threshold requirement of demonstrating that the measures at issue are sanitary or phytosanitary measures."  The Unite d States does not agree that the invocation of 
Article 2.4 by a responding party in a dispute would shift the burden of proof with respect to the 
complaining party's claims, as China appears to assert.  However, the Panel need not decide this issue 
since the United States is not invoking Article 2.4 of the SPS Agreement . 
4.95 Because China has chosen not to assert, let alone prove, one of the essential elements of a 
prima facie case in support of its claims, the Un ited States does not address those claims. However, 
the United States reserves its right to respond to an y further assertions in this regard, should China 
choose to make them. 
7. Reply to China's response and third party comments on US Preliminary Ruling request 
of 1 October 
4.96 Although China states that it intended to make claims under the SPS Agreement  in the 
alternative (that is, if the United States invoked Article 2.4 of the SPS Agreement  as a defense), it is 
undeniable that China's consultations request does not request consultations to pursue alternative WT/DS392/R 
Page 26  
 
 claims, but makes the request for consultations condi tional on future developmen ts. This is the defect 
in China's consultations request with respect to the SPS Agreement , and China's subsequent attempts 
at clarification cannot cure the jurisdictional requirement set forth in DSU Article 1.1 that 
consultations must be requested pursuant to the consultation and dispute settlement provision of each 
covered agreement for which dispute settlement is sought. 
4.97 Many other Members have properly invoke d the consultation and dispute settlement 
provisions of a covered agreement to pursue alterna tive claims under that agreement. Canada recently 
requested consultations with the United States pursuant to a number of provisions, including 
Article 11 of the SPS Agreement , in order to pursue claims that certain measures were inconsistent 
with, "in the alternative, Articles 2, 5 and 7 of the SPS Agreement ."  The United States had no 
objection to the invocation of the consultation and dispute settlement provision of a covered 
agreement in order to pursue an alternative claim unde r that agreement. It is the failure actually to 
invoke the consultation and dispute settlement provision of a covered agreement that gives rise to the 
jurisdictional problem with China's consultation and panel request here. 
4.98 There is no basis for China's assertion that the United States is pursuing a preliminary ruling 
merely to delay the proceedings. The United Stat es alerted China to the deficiency in China's 
consultation request at the earliest possible moment , at which point China could have submitted an 
amended consultation request clearly reques ting consultations under Article 11 of the SPS Agreement  
and indicating that it was raising its SPS claims in the alternative. That would have been the end of 
the matter. Even if China did not agree with the United States, China could have nonetheless decided 
that the most pragmatic way forward would be to am end its consultations request to put an end to the 
matter once and for all.  
4.99 The issue presented by China's consultations requ est is not a mere technicality. In raising the 
deficiency of China's consultations request, the United States is pursuing an important systemic 
concern. If China's approach were to be accepte d, it could lead to more and potentially greater 
confusion in future disputes. A responding party and potential third pa rties would be unable to divine 
what the exact legal issues will be in a dispute.  The DSU provisions are clear and were agreed – a 
complaining party's consultations request "sha ll give the reasons for the request, including 
identification of the measures at issue and an indi cation of the legal basis for the complaint."  A 
complaining party is not free to say that it is not
 using as the basis for its complaint a particular 
covered agreement only to say later that it is. Clarit y in the request for consultations is important for 
the overall operation of the dispute settlement system.  
4.100  Finally, China argues that it provided an "indication" of the legal basis for its complaint under 
the SPS measures. While the United States does not ag ree with that assertion, more fundamentally, 
that is not the relevant issue before the Panel. Th e core issue before the Panel is whether, in its 
consultations request, China brought this dispute "p ursuant to the consultation and dispute settlement 
provisions" of the SPS Agreement . China did not.  
C. EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF CHINA AT THE FIRST 
SUBSTANTIVE MEETING OF THE PANEL  
1. Introduction and background 
4.101  This is a case about arbitrar y discrimination. A series of measures over the past two years 
have prevented only China from accessing US poultry impor t approval procedures. These include 
Section 733 and Section 727 of the  Agriculture Appropriations  Acts of 2008 and 200995, respectively, 
both of which have prohibited the relevant governme nt agency from using any funds to "establish or 
                                                      
95 Exhibits CN-1 and CN-8.  WT/DS392/R 
 Page 27 
 
 
 implement a rule allowing poultry products to be imported into the United States from the People's 
Republic of China ". Sections 733, 727, and the latt er's replacement, Section 743 of the Agriculture 
Appropriations Act 2010, reference the "establishment or im plementation of a rule". This phrase 
implicates all of the Food Safety Inspection Service's (FSIS) "equivalence" procedures – the 
procedures that are essential  prerequisites for exporting poultry to the United States. During the past 
two years, Section 727 and Section 733 have for eclosed any opportunity for China to secure and 
maintain such status, therefor e denying China the opportunity to access the US poultry market. 
4.102  FSIS is the only US entity with both the legal authority  and the institutional capability  to 
evaluate the food safety regime for poultry in exporting countries. It does so by examining five broad risk areas. FSIS, after applying its procedures to China, determined that it met all FSIS requirements 
and established  a rule permitting imports of processed poultr y products, making China one of just 10 
countries to have successfully completed these procedures. FSIS was in the process of both 
maintaining that approval and applying the initial procedures to China's poultry slaughter  inspection 
system when Congress abruptly removed China's ac cess to the procedures. This all occurred as the 
United States was steadily increasing  its consumption of Chinese food products, importing $5.2 
billion worth in 2008 alone.
96  This discrimination violates various provisions of the WTO 
Agreements and cannot be cured by recour se to the exception in GATT Article XX(b). 
2. Section 727 of the Agriculture Appropriations Act 2009 
(a) Section 727 is inconsistent with Articles 2.2,  2.3, 5.1, 5.2, 5.5, 5.6, and 8 of the  
SPS Agreement  
4.103  Having stated repeatedly in its first written s ubmission that the purpose of Section 727 is the 
protection of human life and health97, there is no doubt that the United States has demonstrated that 
Section 727 is an SPS measure as defined in the SPS Agreement.98 
(i) Relationship between the SPS Agreement and GATT Article XX(b) 
4.104  Both the SPS Agreement  and GATT Article XX(b) prohibit the enactment of health-related 
measures in a manner that arbitrarily or unjustifiably discriminates among WTO Members. As the 
European Union correctly points out in its third-party submission99, the provisions of the 
SPS Agreement  provide relevant and immediate context for interpreting Article XX(b). Thus, the 
evidence and arguments supporting China's claims under the SPS Agreement  are highly relevant and 
applicable to the rebuttal of the US defence under XX(b).  
(ii) Section 727 is inconsistent with Ar ticles 5.5 and 2.3 of the SPS Agreement 
4.105  Article 5.5 of the SPS Agreement  prohibits Members from applying different levels of 
sanitary protection to comparable situations withou t justification. The higher level of SPS protection 
applied by the United States to Chinese poultry produc ts, reflected in Section 727, is arbitrary and 
unjustifiable and results in discrimina tion, in violation of Article 5.5. 
4.106  In particular, Section 727 requires the United States to apply an "ALOP" to Chinese poultry 
that is different from the ALOP that is applied to, first, other food products imported from China and, 
second , to poultry products imported from any othe r WTO Member. This distinction in ALOPs in 
                                                      
96 Exhibit US-24, p. 5. Processed poultry would amount to 0.2% of China's total food exports 
(Exhibit CN-41). 
97 United States' first written submission, paras. 119, 121, 122. 
98 See, e.g., Panel Report, EC – Hormones , para. 8.40. 
99 Third party written submission by the European Union, paras. 35-40. WT/DS392/R 
Page 28  
 
 both situations is arbitrary and unjustifiable, and it results in discrimination against China. The ALOP 
that the United States applies to Chinese poultry produc ts is stricter than zero tolerance, whereas the 
ALOP applied by the United States to both other  Chinese food imports and poultry imports from 
other WTO Members is significantly lower. With respect to the rationale for applying an ALOP of less than zero tolerance to Chin ese poultry products, the United States has provided no scientific 
evidence or justification for singling out poultry  products from China  for different treatment. This 
distinction in ALOPs results in discrimination, confirmed on the basis of the various warning signs developed by the Appellate Body. Having demonstrated Section 727's inconsistency with Article 5.5, 
China requests that the Panel also find a violation of  Article 2.3, in accordance with Appellate Body 
case law.
100   
(iii) Section 727 is inconsistent  with Articles 2.2, 5.1, and 5.2 of the SPS Agreement 
4.107  Article 5.1 of the SPS Agreement requires that SPS measures be ba sed on the conclusions of a 
scientific risk assessment that tak es into account the factors in Article  5.2. As discussed in China's 
first written submission101, there is no publicly available indication th at Section 727 was enacted on 
the basis of scientific evidence  demonstrating that Chinese poultry products pose any specific  health 
threat, as required under Article 2.2, or on the basis of an Article 5.1-consistent risk assessment. 
Therefore, China requests the Panel fi nd that Section 727 is inconsiste nt with Articles 2.2, 5.1 and 5.2 
of the SPS Agreement.  
(iv) Section 727 is inconsistent with  Article 5.6 of the SPS Agreement 
4.108  Article 5.6 requires that Members' SPS measures not  be more trade restrictive than required to 
achieve their appropriate level of sanitary protection. To establish a vi olation of Article 5.6, a Member 
must demonstrate that there is an alternative SPS measure that is reasonably available, achieves the 
Member's appropriate level of protection, and is significantly less trade restrictive.102  An alternative 
measure that meets all of these criteria is the application to China of the normal FSIS poultry import approval procedures.  
(v) Section 727 is inconsistent with  Article 8 of the SPS Agreement  
4.109  Section 727 is inconsistent  with Article 8 of the SPS Agreement  because it leads to "undue 
delay" in the completion of conformity assessment  procedures for the importation of  Chinese poultry 
products. Section 727, together with its predec essor Section 733, delayed the application of FSIS 
procedures to China by 2 years. The prohib ition imposed under Section 727 on Chinese access to 
FSIS approval procedures is without scientific or ot her justification, and it results in arbitrary and 
unjustifiable discrimination against Chinese poultry pr oducts. The delay created by Section 727 in the 
application of FSIS procedures to China is therefore unjustifiable, or "undue".  
(b) Section 727 is inconsistent w ith Article I:1 of GATT 1994  
4.110  Section 727 violates Article I of GATT 1994 as it has denied only Chinese poultry products 
the possibility of obtaining the necessary import approval under FSIS procedures.  
4.111  Hypothetical like product analyses are appropriate when a measure imposes a de jure  origin-
based distinction.
103 Thus, the "like products" for the purposes of this analysis are the "poultry 
                                                      
100 Appellate Body Report, Australia – Salmon , para. 109. 
101 China's first written submission, paras. 137-147. 
102 Appellate Body Report, Australia – Salmon , para. 194. 
103 Panel Report, Colombia – Ports of Entry , para. 7.356, Appellate Body Report , Canada – 
Periodicals , pp. 20-21.  WT/DS392/R 
 Page 29 
 
 
 products" of any other Member whose poultry product s inspection system could have been evaluated 
(and possibly found to be equivalent) under the FSIS pro cedures. To the extent th at the United States 
claims104 that Chinese processed poultry is not "like"  processed poultry produced in any other WTO 
Member due to alleged vague "differences in safe ty", it has presented no evidence to support that 
assertion. 
(c) The United States concedes that Section 727 is  inconsistent with GATT Article XI:1 and 
Article 4.2 of the Agreement on Agriculture  
4.112  China demonstrated in its first written submissi on that Section 727 violates Article XI:1 and 
Article 4.2 . The United States appears to concede these violations105, but argues that they can be 
justified under Article XX(b) of GATT 1994.  This defence, however, must fail. 
(d) Inconsistency of Section 727 with GATT 1994  and the Agreement on Agriculture  cannot be 
justified on the basis of GATT Article XX(b)  
4.113  To justify a measure under the exceptions in Article XX, it must meet the requirements of 
both the specific exception invoked and the chapeau.106  The requirements of neither are met in this 
case.  
(i) Section 727 is not "necessary" within the meaning of GATT Article XX(b)   
4.114  The United States has not met its burden of dem onstrating that Section 727 falls within the 
scope of the exception in paragraph XX(b). The Appella te Body has identified the factors that must be 
considered when determining  whether a measure at issue is "necess ary" for the achievement of its 
stated objective under the relevant exception in Article XX.107  Analysis of these factors demonstrates 
that Section 727 was not necessary for its objective – the protection of human life and health from 
"contaminated foods".  
4.115  First , any contribution of Section 727 to this objective was insignificant. The United States 
claims that Section 727 was necess ary to protect against contaminated foods, but it targets only one 
product – a product for which the United States gave  no evidence of China-specific problems and 
which was expected to be imported in low quantiti es. While blocking the import of Chinese poultry, 
the United States continued to import massive quan tities of other foods from China, any of which 
could have in theory been contaminated. Moreove r, the FSIS procedures were entirely capable of 
identifying any problems with Chinese poultry and prev enting importation if ther e was cause to do so. 
Second , Section 727's insignificant contribution does not  outweigh its extreme trade-restrictiveness. 
The Appellate Body has confirmed that a measure as trade-restrictive as an import ban may be justified under Article XX(b), but only if its c ontribution to its stated objective is "material".
108  Third , 
there is an alternative measure available to the United States – the FSIS procedures. This alternative 
measure is reasonably available and would allow th e United States to achieve the level of sanitary 
protection normally applied to imported poultry. Finally , the United States illogically instituted 
Section 733 in December 2007, just when Chin a was scheduled to undergo an equivalence 
maintenance audit – a process that would have requi red FSIS to examine any allegedly "unique" risk 
posed by Chinese poultry that the United States claims justified Sections 733 and 727. Based on the 
                                                      
104 United States' first written submission, para. 98. 
105 United States' first written submission, paras. 101-105. 
106 Appellate Body Report, US – Gasoline , Section IV; Appellate Body Report, Brazil – Retreaded 
Tyres , para. 139; Appellate Body Report, US – Shrimp , para. 139. 
107 Appellate Body Report, Brazil – Retreaded Tyres , para. 82. 
108 Appellate Body Report, Brazil – Retreaded Tyres , paras. 150-151. WT/DS392/R 
Page 30  
 
 above, Section 727 was not "necessary" and ther efore does not fall within the exception in 
paragraph (b). 
(ii) Section 727 does not comply with the chapeau  of GATT Article XX  
4.116  The United States has also not met its burden of demonstra ting that Section 727 fulfils the 
requirements of the chapeau
 of Article XX. The application of Section 727 has resulted in both 
unjustifiable discrimination and arbitrary discriminat ion between countries where similar or identical 
conditions prevail, within the meaning of Article XX. Section 727 has blatantly discriminated against 
China, as compared to every other WTO Member  similarly seeking to obtain FSIS approval for 
poultry products. The discrimination resulting from Sec tion 727 is arbitrary for several reasons. First, 
there is no indication that it was enacted based on any scientific evidence regarding risks posed by 
Chinese poultry. Also, the United States has failed to demonstrate why it singled out poultry, as 
opposed to other food products  from China, or why it singled out Chinese poultry, as opposed to 
poultry from other WTO members . China is one of just 10 countries with a poultry inspection system 
that has been deemed equivale nt, yet its poultry is treated as more dangerous than poultry from all 
other WTO Members, including those without any or without any effective  food safety laws. 
3. Section 743 of the Agriculture Appropriations Act of 2010  
4.117  China believes that Section 743 is a subsequent , closely-related measure to Section 727 that 
continues the US policy embodied in Section 727 of subjecting the import of only Chinese poultry products to discriminatory restrictions. On bala nce, Section 727 and Section 743 have the same 
substance, essence, and/or legal implications. The Panel should find that Section 743 is within its 
jurisdiction, and then provide China with the opportuni ty to detail the substantive violations caused by 
Section 743. 
4.118  The US first written submission challenges Chin a's assertion that Section 743 is within the 
Panel's terms of reference. China thus believes that it would be in the interest of all of the participants 
in this proceeding for the Panel to make a prelimin ary ruling with respect to whether Section 743 is 
within the Panel's jurisdiction.  
4. Request for enhanced third party rights 
4.119  China does not believe that this disput e merits enhanced third party rights. 
D. E
XECUTIVE SUMMARY OF THE CLOSING STATEMENT OF CHINA AT THE FIRST SUBSTANTIVE 
MEETING OF THE PANEL  
4.120  Mr Chairman, distinguished Members of the Panel, during the past two days, China has 
explained that Section 727 and Section 733 served to  prevent the experts at FSIS from doing their job 
for nearly two years, but only with respect to China. Because FSIS is the only US government entity 
with both the legal authority  and institutional capability  to evaluate the food safety regime of Chinese 
poultry and to authorize poultry imports, these meas ures have served to for eclose China from having 
even the possibility  of importing poultry into the United States. And they have done so without any 
regard to the actual safety and health risks of Ch inese poultry, the facilities in which that poultry is 
processed, or the Chinese poultry inspection system.  
4.121  At the same time, every other WTO Member  that wished to import poultry into the 
United States continued to have full access to the standard FSIS procedures, including countries in 
which there was actual evidence of specific pr oblems with poultry processing and safety. For 
example, as I mentioned yesterday, Mexico contin ued to access the FSIS procedures even after audits 
revealed a number of unsanitary conditions in  Mexican poultry processing and slaughter  WT/DS392/R 
 Page 31 
 
 
 establishments that pointed to the systemic failure  by Mexican officials to enforce food safety laws.109  
n fact, US-origin poultry has its own risks, and China has identified a survey finding Salmonella  
and/or Campylobacter  in about two-thirds of chickens tested in the United States.110 Scientific and 
other evidence does not support the conclusion that  there is a health threat specific to poultry from 
China  that is not also present in any other  WTO Members.  
4.122  China has explained in great detail why Sections  727 and 733 are inconsistent with the US 
obligations under the SPS Agreement , the GATT 1994, and the Agreement on Agriculture , based on 
the total absence of scientific evid ence or risk assessment supporting th ese measures, the fact that they 
were not "necessary" within the meaning of Ar ticle XX(b), and the arb itrary and unjustifiable 
discrimination inherent in, and resulting from, these measures. 
4.123  In response, the United States has argued that Section 727 was "adopted in the context  of an 
ongoing food safety equivalency process" and that it was an " intermediate " "step in an ongoing 
review of the equivalency of China's food safet y enforcement system as applicable to poultry 
products."111 Mr Chairman, distinguished members of the Pa nel, this is an incredible statement. As 
China has explained, it is FSIS that performs th e "ongoing food safety equivalency processes" with 
respect to poultry for the US Government, and it is FSIS that performs all of the steps in those 
ongoing reviews of equivalency, incl uding reinspection of products at the US border. In stark contrast, 
Section 727 and its predecessor were extraordinary actions taken by the US Congress that suddenly 
and unexpectedly terminated  any "ongoing" process that FSIS was conducting with respect to China, 
by taking away FSIS's funding fo r these purposes for several years.  
4.124  In attempting to justify Sections 727 and 733 as qualifying as an exception under GATT 
Article XX(b), the United States repeated its allega tions about generalized problems with China's food 
safety regime, citing to a number of reports on the topic.112  Yet, given that the value of imports of 
food products from China has increased dramatically  from $1 billion in 1999 to $5.2 billion in 
2008113, the United States is in no position to argue that the treatment of Chinese poultry is not 
arbitrary when it fails to present any evidence demo nstrating why such pou ltry is somehow riskier 
than the other Chinese food products that are imported in massive quantities. 
4.125  Next, the United States dedicated a substantial portion of its opening statement yesterday to 
telling us about alleged problems with Chinese-origin  spinach, baby formula, seafood, turbot fish, 
pork, pet food, milk, and eggs, and cited to ten exhibits in support.114 But these allegations are 
completely irrelevant to this case – which is a dis pute about arbitrary measures that are specifically 
targeted at poultry , and only poultry .  
4.126  The United States does mention generalized concer ns related to the avian flu and its impact 
on poultry115, but again does not explain why China should be treated differently than every other 
country that has avian flu issues, all of which ha ve access to the normal FSIS procedures. Nor did it 
provide any evidence whatsoever – other than  the unsupported statements in a Congressional 
Committee Report – to contradict the finding by FSIS that China was fully capable of exporting 
poultry that was not affected by the avian flu, findi ngs that FSIS made when it first promulgated the 
                                                      
109 Final Report of an Audit Covering Mexico's Meat and Poultry Inspection System FY 2008-1 
(Exhibit CN-27). See also  Exhibits CN-28 and CN-29. 
110 Chicken survey finds two-thirds harbour salmonella, campylobacter  (Exhibit CN-46). 
111 United States' oral statement at the first substan tive meeting of the Panel, paras. 3, 6 (emphases 
added). 
112 United States' oral statement at the first subs tantive meeting of the Panel, paras. 31-33. 
113 Exhibit US-24. 
114 United States' oral statement at the first subs tantive meeting of the Panel, paras. 34-35. 
115 United States' oral statement at the first substantive meeting of the Panel, para. 29. WT/DS392/R 
Page 32  
 
 rule allowing China to export processed poultry af ter years of detailed reviews, audits, and 
inspections.
116 
4.127  The only other evidence that the United States described yesterday that specifically related to 
Chinese poultry involved a reference to one instance  of alleged smuggling of poultry, none of which 
was found to pose any health risk to US consumers.117 Yet, as China explained yesterday, there is 
simply no basis for the United States to concl ude that cutting off funding for FSIS equivalence 
rulemaking is somehow "necessary" to control sm uggling from China, or that alleged smuggling 
justifies in any way the arbitrary discrimination established by Section 727. This is clear from the 
FSIS response during its 2006 rule-making with respect  to processed poultry from China, that "[t]his 
rule is not expected to have any impact  on illegal entry of products"118 because "U.S. Customs and 
Border Protection, rather than FSIS, addresses smugg ling" and "acts as a first line of defense for all 
products entering the country."119 
4.128  In the end, although the United States would lik e to believe, as it states, that its "evidence 
makes clear" that "the importation of potentiall y unsafe poultry from China may pose a significant 
risk to human and animal life and health"120, the most cursory review of this so-called "evidence" 
reveals a lack of any connection to problems that are in any way  specific to Chinese poultry or 
China's poultry inspection system.  
4.129  Why, one might ask, does the United States have nothing specific to say about the health and 
safety risks that could arise from importing Chinese poultry as a result of alleged deficiencies in the 
Chinese inspection system? The answer is simple. Fo r almost two years, the people at FSIS with the 
capability to develop any such evidence have b een precluded from doing so as a direct result of 
Section 727 and Section 733. I recall that, yester day, the United States provided the Panel with the 
definition of "arbitrary", a term that is critical to evaluating both China's SPS claims and the United States' GATT Article XX(b) defense. Arbitrary is defined as something that is "based on mere opinion or preference as opposed to the real nature of things ".
121 With respect to evaluating the safety 
of Chinese poultry products, FSIS is the only agen cy with the institutional capability and scientific 
expertise to determine the "real nature of things ", and they were foreclosed from making that 
determination in the year leading up to the imposition of Section 727, and beyond. It follows that Congress was instead acting "based on mere opinion or preference" of some of its Members, and that 
such action was, by definition, "arbitrary". 
4.130  In its efforts to defend Section 727 as a measure that is not "arbitrary" pursuant to the 
Article XX chapeau, the United States emphasised at paragraph 50 of its opening statement that "there 
is no other country that had been as far along in th e equivalency process" where "the same conditions 
prevail."  In essence, the United States was asserting that there was some sense of urgency  with 
respect to Chinese equivalence that made it appropr iate for Section 727 to single out China. But, 
several minutes earlier, in paragraph 23 of the same  statement, the United States contradicted itself, 
stating that "even in the absence of Section 727, FSIS would not have necessarily allowed China to 
export poultry to the United States." In fact, there was no sense of urgency  in view of how "far along 
in the equivalency" process China had gone. This is because, for a variety of reasons, more than two 
years had passed since the most recent on-site audits  of the poultry safety and control system had last 
                                                     
 
116 United States' oral statement at the first subs tantive meeting of the Panel, para. 39, quoting 
Exhibit US-42. 
117 United States' oral statement at the first substantive meeting of the Panel, para. 35; Exhibit US-30 
(noting that the smuggled poultry products contained no bird-flu virus). 
118 Exhibit CN-14, p. 20869. 
119 Exhibit CN-14, p. 20869. 
120 United States' oral statement at the first substantive meeting of the Panel, para. 41. 
121 Exhibit US-52.  WT/DS392/R 
 Page 33 
 
 
 taken place in China, in August 2005.122 As a result, at the time that Section 727 and its predecessor 
were enacted and in force, FSIS, in the exercise  of its normal equivalen ce rule-making procedures, 
would have been required  to analyse and conduct on-site audits  of China's poultry safety and control 
regime before Chinese poultry could enter the United  States. Through such audits, FSIS would have 
naturally evaluated and examined, inter alia, any allegedly unique risks posed by China, and any 
alleged food "safety scandals". 
4.131  Consequently, the United States once again fails  in its attempt to characterize China's 
situation as unique, as it has previously failed when trying to distinguish China by discussing health 
and safety concerns such as avian flu, bacteria, a nd contaminants that are all inherent in other 
countries that have never lost access to FSIS procedures. 
4.132  Yesterday, the United States pointed out that "while Section 727 was in effect, 56 major US 
companies and trade associations representing the dom estic industry wrote a letter to President Obama 
asking him to oppose an extension of Section 727."123 In particular, the industry argued in the letter 
that "Section 727 and its predecessors effectiv ely bar FSIS from conducting a necessary and 
appropriate risk assessment on whether imports of cooked chicken from China pose any risk to 
American consumers."124 
4.133  Mr Chairman, distinguished Members of the Panel,  the companies that signed on to that letter 
(including through the various trade associations) in clude many profit-seeking companies that are in 
the business of selling poultry products in US ma rkets. Other than the US Government, these 
companies have the greatest knowledge of the capab ilities of FSIS, and they would also have the 
greatest commercial risk from advocating the remova l of legislation that genuinely protected the 
safety of the poultry sold in the United States. If US consumers were to fear the safety of any poultry 
sold in US grocery stores and restaurants as a re sult of a scare related to imported Chinese poultry, it 
would certainly have spillover effects on the demand for US-origin poultry.125  Consequently, the US 
industry letter actually supports China's arguments th at Section 727 was not "necessary", and that the 
normal FSIS procedures constitute an alternativ e SPS measure that achie ves the United States' 
appropriate level of protection, and is significantly less trade restrictive.  
4.134  Yesterday, in its latest attempt to distract  the Panel from the substantive problems with 
Section 727 and Section 733, the United States asked a series of questions to China to identify precisely when  China believed that it was first "demonstrated" that the US measures were 
SPS measures. China believes that this question is entirely irrelevant to the issue of whether its 
consultation request properly requested consultations under Article 11 of the SPS Agreement . That is 
because China's consultations request not only specifically invoked Article 11 of the SPS Agreement , 
but it also included potential violations of specific provisions of that agreement, namely Articles 2.1, 
2.2, 2.3, 5.1-5.5, and 8 of the SPS Agreement , and a brief statement of the basis for those violations. 
China framed its SPS claims just like any othe r arguments in the alternative, and China's 
understanding of the true objective of the US measur es has evolved during the course of this dispute. 
An argument in the alternative can not be a proper basis for disrupting the ability of China to achieve 
a "prompt settlement of" this dispute that is "essen tial to the effective functioning of the WTO and the 
maintenance of a proper balance between the ri ghts and obligations of Members", pursuant to 
Article 3.3 of the DSU.  
                                                     
 
122 Exhibit CN-16. 
123 United States' oral statement at the first subs tantive meeting of the Panel, para. 39, citing 
Exhibit US-55. 
124 Exhibit US-55. 
125 See, e.g., Exhibit US-14, in wh ich one concerned company explained that "[i]f American consumers 
cannot buy with confidence, they may decide to avoid poultry products altogether". WT/DS392/R 
Page 34  
 
 4.135  With respect to the question of whether Secti on 743 falls within the scope of the terms of 
reference, China provided a list of five key reasons  why Section 743 has the sa me substance, essence, 
and/or legal implications as Section 727.
126 In response, the United St ates emphasised that "because 
Section 743 was drafted and adopted after consultati ons were held, it was impossible for consultations 
to be held on the measure."127 But China notes that the lack of cons ultations in this situation can not 
be a determining factor, or else future measures could never  fall within the scope of the terms of 
reference of any dispute, which would be contrary to Appellate Body precedent.128 
4.136  Finally, in closing, I would like to recall one of the key points that China made yesterday. 
Even if, during the term of Sections 727 and 733, every scientist in the world had independently concluded that China's poultry inspection system  and, in turn, Chinese poultry products were the 
safest in the world, Section 727 would have still operated to exclude Chinese poultry products from 
obtaining FSIS import approval and therefore, fr om being exported to the United States. The 
United States has not disputed this conclusion. In  China's view, it is inconceivable that such an 
arbitrary measure, with such a dramatic trade effe ct, could be consistent with the disciplines of the 
GATT 1994, the SPS Agreement, and the  Agreement on Agriculture . It  clearly is not.  
E. E
XECUTIVE SUMMARY OF THE ORAL STATEMENT OF THE UNITED  STATES AT THE FIRST 
SUBSTANTIVE MEETING OF THE PANEL  
4.137  China's submission and oral statement overlook tw o important facts: first that Section 727 
was adopted in the context of an ongoing food saf ety equivalency procedure, and second that 
Section 727 and was of only limited duration and e ffect. A proper examination of Section 727 under 
relevant WTO rules requires both of these facts to be fully taken into account.  
4.138  First, under the US system for ensuring the safety of imported poultry products, FSIS must 
determine that the exporting country has a poultry inspection system that achieves the same level of 
sanitary protection as the US system. The equivale ncy determination is not addressed to the food 
safety of particular products , but to the equivalency of the inspection system  of the exporting country . 
China does not contest the right of a WTO Member to adopt an equivalency-based food safety system. 
However, China argues that Section 727 was "discrim inatory" simply because it mentions China. This 
argument ignores the fundamental point that Sec tion 727 was addressed to China because the measure 
was an exercise of Congressional oversight over the ongoing equivalency procedure involving China's  
poultry inspection system. An action taken in the cont ext of an equivalency review of a particular 
country's food safety inspection system will, by its very nature, make explicit reference to that 
country. The country-specific nature inherent in an  equivalency review does not automatically raise 
questions of "discrimination". 
4.139  Second, Section 727, on its face, was of only limited duration and effect . Neither Section 727, 
nor any other US measure, imposed an indefinite restriction on the completion of the equivalency 
procedures applicable to China's poultry inspectio n system. Rather, Section 727 applied for a period 
of less than seven months, and was intended to ensu re that China's lax food safety enforcement was 
properly considered. The measure has expired, and under a separate measure – Section 743 – the 
funding restriction has been removed. Section 727 also applied only to the establishment or implementation of equivalency rules for Chinese poultry; it did not prohibit – and indeed contemplated – the consideration of issues related to China's food safety enforcement system during the period subject to the measure.  
                                                     
 
126 China's opening oral statement at the first subs tantive meeting of the Panel, paras. 126-131. 
127 United States' oral statement at the first substantive meeting of the Panel, para. 15. 
128 Appellate Body Report, Chile – Price Band System , paras. 139-144.  WT/DS392/R 
 Page 35 
 
 
 4.140  Thus, to the extent that China establishes that the measure is inconsistent with any discipline 
of the GATT 1994, the question is not – as China see ms to frame it – whether a Member may impose 
an indefinite import ban. Rather, the question is whether the measure actually at issue, which was 
limited in both time and substantive effect and wh ich was adopted for the purpose of ensuring the 
consideration of a legitimate food safety issue,  may be justified under GATT Article XX.  
4.141  Finally, the mere fact that a measure implicat es food safety does not dictate whether or how 
such a measure is covered by the SPS Agreement . To the contrary, the SPS Agreement  – in its 
Annex A – contains a specific and detailed definitio n of covered measures. And as illustrated in the 
EC – Approval and Marketing of Biotech Products  dispute, even if a measure is covered by Annex A, 
it is far from trivial to determine how each of th e differing SPS obligations a pply to any particular 
measure. 
4.142  Along these lines, it is up to China, as the co mplaining party, to allege how and why a 
measure is covered by the SPS Agreement  if it wishes to receive DSB findings under that agreement. 
In this dispute, China has not chosen to ma ke the case that Section 727 is covered by the 
SPS Agreement . In fact, China's request for consultations plainly states that "China does not believe 
that the US measures at issue restricting poultry products from China constitute SPS measures within 
the meaning of the SPS Agreement ".  
4.143  China, however, has  alleged that the US measure is s ubject to, and is inconsistent with, 
disciplines under the GATT 1994. As a result, the United States has presented its defense of the 
measure under the relevant provisi ons of the GATT 1994. Had Chin a requested consultations under 
the SPS Agreement , and had China made a prima facie case of how and why the US measure fell 
under the SPS Agreement , the United States would have presente d its defense under that framework. 
But the United States, as responding party, cannot be  expected to present a defense based on claims 
never consulted upon and with resp ect to which China has failed to make even a prima facie case.  
4.144  China asserts that two other measures – an "i ndefinite moratorium" and the subsequently 
enacted Section 743 – also are inconsistent with the WTO Agreement. Section 727, however, is the 
only measure within the terms of reference of the Panel. China has no basis for the allegation of the 
separate, distinct measure that it calls "the moratorium". In particular, China's citation to a provision in the 2008 appropriations bill does not establish an indefinite moratorium. The fact that Congress 
enacted a time-limited funding restriction twice does not show the existence of an "indefinite" 
suspension of approvals. Moreover, Section 743 disp roves China's claim as it has resulted in a lifting 
of the funding restriction.  
4.145  In addition, contrary to China's assertions, S ection 743 is not a measure that the Panel may 
examine for conformity with the covered agreemen ts because it is not within the Panel's terms of 
reference as part of the "matter" referred to the Pa nel by the DSB. First, the parties did not consult on 
its provisions. Second, Section 743 plainl y changes the "essence" of Section 727.  
4.146  China also mischaracterizes the effect of Secti on 727 by failing to take account of the "scope 
and meaning" of provisions contained in US appropria tions legislation generally, and of the particular 
conditions contained in Section 727 specifically. US domestic law dictates that a congressional 
funding restriction is limited to its explicit terms. Funding restric tions do not amend or modify the 
underlying law administered by an executive agency . Accordingly, these restrictions do not prevent 
the agency from taking actions related  to the prohibited act as long as the agency does not take the 
prohibited act itself. Further, unless the funding restriction states otherwise, it only applies to the 
fiscal year covered by the appropriations bill in which it is contained.  
4.147  Thus, Section 727's legal meaning was limite d to preventing USDA from "establishing" or 
"implementing" a rule allowing poultry products from China to be imported into the United States for WT/DS392/R 
Page 36  
 
 a temporary six and a half month period during the 2009 fiscal year. Section 727 did not create a 
permanent funding restriction that would impact FSIS's ability to establish and implement rules related to equivalency after its e xpiration. And indeed, as a consequence of Section 743, the funding 
restriction on FSIS has been lifted.  
4.148  Further, Section 727 did not prohibit FSIS from using funds to engage in activities under the 
PPIA related  to an equivalency rulemaking for China. To  the contrary, Section 727 directed FSIS to 
engage in this work, and it did so during 2009. FSIS reviewed its documentation with regard to 
China's equivalency application, it sent a letter to  China requesting additional information on its new 
food safety law, and it provided an equivalency ac tion plan to Congress. FSIS could have done even 
more work, including the PPIA's document analysis step , but its work was thwarted by China's failure 
to respond to its letter reques ting additional information. 
4.149  Finally, Section 727 did not ban imports of po ultry from China. Rather, the import prohibition 
was imposed by the PPIA, a measure not at issue in this dispute. And even in the absence of 
Section 727, FSIS procedures would not have nece ssarily allowed China to export poultry to the 
United States. For neither processed or slaughter ed poultry was it a foregone conclusion that FSIS 
would find China's inspection system to be equivalent.  
4.150  Thus, the most China can allege is that S ection 727 prevented FSIS from taking final actions 
to specifically establish or implement equivalency rules during fiscal year 2009 that might  have 
otherwise occurred. China has no basis for alleging how, if at all, any final actions would have 
differed during the period cove red by Section 727 had this measure not been enacted.  
4.151  In any event, Section 727 is justified pursuant to GATT Article XX(b).  
4.152  Section 727's policy objective falls within Article XX(b)'s  range of policies. First, it is well 
known that poultry can contain bacteria, contaminan ts, and other additives and substances that pose a 
risk to human life and health. Thus, if China's aut horities fail to enforce its laws to ensure that its 
poultry is produced under equivalent conditions, then  the life or health of US consumers would 
potentially be at risk. Similarly, avian influenza-in fected poultry can pose a risk to animal and human 
life and health. And entry of infected poultry fro m China could occur if Chinese authorities did not 
adequately enforce the law to ensure that poultry had been cooked or otherwise processed sufficiently 
to kill the disease.  
4.153  The risk posed by China's lax enforcement of its food safety laws is further highlighted by 
critical reports on China's systemic problems and the series of food safety crises that have plagued China in recent years. For example, the Asian De velopment Bank noted that "unsafe food in the PRC 
remains a serious threat to public health," and i ndicated that "there is a pressing need for further 
reform". Similarly, the World Health Organiza tion's food safety chief characterized China's food 
safety system as "disjointed", noting that this fe ature of the system helped prolong the melamine 
crisis. Finally, a study by Global Health Governance pointed out that the reluctance of local officials 
in China "to enforce standards or regulations set at  the provincial or national level makes it unlikely 
that food safety can be ensured consistently across the country." The report also stated: "corruption 
within the Chinese government poses a further cha llenge" to food safety as this problem "extends 
from grass-roots cadres to the highest levels." 
4.154  In addition, numerous high-profile crises have occurred, threatening the life and health of 
consumers and leading to frequent bans on Chin ese products. Most notably, in 2007, the use of 
melamine in China to adulterate feed and gain bigger profits led to the deaths of numerous US 
household pets, with unofficial figures indicating the practice responsible for the death of up to 4,000 
cats and dogs. In 2008, it was discovered that Ch inese producers were using melamine in products 
intended for human consumption, such as baby form ula, milk, and eggs. Consumption of melamine- WT/DS392/R 
 Page 37 
 
 
 tainted products led to over 300,000 illnesses and the deaths of at least 14 infants. The World Health 
Organization dubbed China's melamine crisis "one of  the largest food safety events the agency has 
had to deal with in recent years". 
4.155  China's central government even recently acknowle dged the extent of its problems with food 
safety. For example, China's Ministry of Health stated that "China's food security situation remains 
grim, with high risks and contradictions". And as a result of these problems, China was forced to 
enact a new food safety law earlier this year.  
4.156  These many broad-ranging food safety crises rais e serious questions about China's ability to 
enforce its laws. And the question of enforcement is  of particular importance in the context of an 
equivalency regime where the United States must rely on China to enforce its la ws to ensure that the 
poultry it is exporting to the United States is safe.  
4.157  With these risks in mind, the US Congress en acted Section 727. The measure and its Joint 
Explanatory Statement ("JES") make clear that its policy objective was to protect against the risk 
posed to human and animal life and health from potentially unsafe poultry from China. In fact, the 
JES accompanying Section 727 states: "There remain ve ry serious concerns about contaminated foods 
from China and therefore the bill retains language prohibiting FSIS from using funds to move forward 
with rules that would allow for the importation of po ultry products from China into the U.S."  Similar 
language was also included in the Comm ittee Report accompanying Section 733. 
4.158  Section 727 was necessary to achieve this im portant policy objective in light of the severe 
risks posed by the importation of potentially unsaf e poultry from China. China's food safety system 
suffers from broad systemic problems, problems that FSIS is not typically faced with when making an 
equivalency determination. These include widespread  smuggling, corruption, and the lax enforcement 
of China's food safety laws. Furthermore, China has experienced numerous food safety crises in 
recent years, such as the devastating melamine crisis  that occurred shortly after FSIS had made a final 
determination about China's poultry processing system. 
4.159  The conclusion that Section 727 was necessary is bolstered by the analysis that past panels 
have used when addressing whether a measure was "n ecessary" in the context of Article XX(b). Other 
panels have often found it helpful to weigh and balance the importan ce of the interest s or values at 
stake, the contribution made by the measure to its policy objective, and the trade restrictiveness of the 
measure. In the instant dispute, these factor s all support the conclusion that Section 727 was 
necessary.  
4.160  First, the need to protect human life and health  from the risk posed by consuming potentially 
unsafe poultry is of the utmost importance, as is th e need to protect animal life and health from the 
threat of avian influenza. Second, there is a di rect relationship between Section 727's policy objective 
and its contribution to food safety. Section 727 directly contributed to the protection of human and animal life and health by ensuring that FSIS did not establish or implement equivalency rules that 
would allow for potentially unsafe poultry to be  imported into the United States. In addition, 
Section 727 set up a process by which FSIS could further evaluate the rules in light of China's 
systemic problems and recent food safety crises. Finally, Section 727 was temporary and did not stop work related to China's equivalency application, and it was explicitly designed to allow FSIS to move 
forward with the implementation and establishment of  equivalency rules when the funding restriction 
was lifted.  
4.161  Section 727 also meets the conditions of the Article XX chapeau. Section 727 was not 
discriminatory because there is no other country wh ere the same conditions prevail as they did for 
China at the time the measure w as enacted. No other country as fa r along in the equivalency process WT/DS392/R 
Page 38  
 
 had experienced food safety crises of such a serious magnitude. Neither had any country in that 
situation suffered from the systemic problems  that plagued China's food safety system.  
4.162  Even if the Panel considers Section 727 discrimin atory, it was not applied in an arbitrary or 
unjustifiable manner. The Brazil  – Retreaded Tyres  Appellate Body Report noted that whether a 
measure is applied in a way that is "arbitrary or unjustifiable" should focus "on the cause of the 
discrimination, or the rationale put forward to expl ain its existence".  Section 727's application was 
not arbitrary or unjustifiable because there was a strong rationale for the measure's treatment of China that directly relates to the measure's policy obj ective – namely the many legitimate concerns about 
China's food safety system.  
4.163  Section 727 is also not a disguised restriction on trade. First, the text of the explanatory 
statement accompanying the measure explicitly indi cates that the measure's policy objective was to 
protect human and animal life and health, not to prot ect a domestic industry. Further, if Section 727's 
objective were to restrict trade, it would not have  included language instructing FSIS to set the stage 
for expeditious action on the impl ementation and establishment of th e equivalency rules as soon as the 
funding restriction was lifted. Statements by members of Congress directly involved with 
Section 727's enactment also support this view , as does the US poultry industry's widespread 
opposition to the measure.  
4.164  The United States believes that any SPS claims by  China are not within the Panel's terms of 
reference. DSU Article 1.1 states that consultations  must be requested pursuant to the consultation and 
dispute settlement provisions of each covered agre ement for which dispute settlement under the DSU 
is sought. But here, China's request for consultations  plainly states that "China does not believe that 
the US measures at issue restricting poultry prod ucts from China constitute SPS measures within the 
meaning of the SPS Agreement ".  
4.165  China's ex post facto  explanation that it wanted to invoke claims under the SPS Agreement  as 
"alternative claims" is unavailing. First, regardless of what China subjectively intended, the governing 
document is the request for consultations itself, which does not request consultations in order to 
pursue alternative claims, but asserts that the US measures at issue are not
 SPS measures. Second, 
Members routinely invoke alternative claims by stat ing just that: that particular claims are presented 
"in the alternative". China in its request for consu ltations could have, but did not, present SPS claims 
in the alternative.  
4.166  The issue presented by China's consultations requ est is not a mere technicality. In raising the 
deficiency of China's consultations request, the United States is pursuing an important systemic 
concern. A complaining party should not be free to claim that it is not  invoking the dispute settlement 
provisions of a covered agreement a nd then later claim that it did . China's approach could lead to 
greater confusion in future disputes. The DSU provisions are clear and were agreed upon – a complaining party's consultations request "sha ll give the reasons for the request, including 
identification of the measures at issu e and an indication of the legal b asis for the complaint". As stated 
in the US preliminary ruling request, clarity in the request for consultations is important for the 
overall operation of the dispute settlement system. 
4.167  Finally, the United States agrees with China that the Panel should not accept the EU's request 
that the Panel alter its working procedures in order to provide enhanced third party rights. The present 
dispute is not comparable to past cases where pane ls have granted enhanced  third-party rights. For 
example, in EC – Bananas III  and EC – Tariff Preferences , the panel granted enhanced rights because 
third parties had substantial trade interests in  the measure at issue in the dispute. And in  EC – 
Hormones , the panel granted enhanced rights to what were essentially co-com plainants in parallel 
proceedings. But here, the basis for the EU's request is that issues under the SPS Agreement  may be 
further developed after the first substantive meeti ng. The United States submits that this rationale  WT/DS392/R 
 Page 39 
 
 
 cannot suffice as the basis for granting enhanced thir d party rights. It is a common element of nearly 
every dispute that the legal and factual issues contin ue to develop after the first substantive meeting. 
Indeed, if this were not the case, the DSU's requi rement for a second substantive meeting would be 
pointless.  
F. EXECUTIVE SUMMARY OF THE SECOND WRITTEN SUBMISSION OF CHINA  
1. Introduction and summary 
4.168  The Parties' responses to the Panel's questi ons confirmed certain undisputed facts:  
• Securing and maintaining on an annual basis an equivalent status under FSIS rules is 
the essential prerequisite for exporting poultry to the United States.  
 
• During the past two years, Section 727 and Section 733 foreclosed for China – but 
not any other WTO Member – any opportunity  to secure and maintain equivalence 
status and, consequently, any opportunity to access the US poultry market.  
 
• The termination of China's access to the fu ll range of FSIS rule-making procedures 
began with the implementation of Secti on 733 in December 2007 and has continued 
until at least 12 November 2009.  
 
• There was no possibility that poultry from Ch ina could have been imported into the 
United States at any time between D ecember 2007 and 12 November 2009 without 
FSIS first conducting a detailed audit and examination of China's poultry safety and 
inspection regime.  
 
• During the period from December 2007 through 12 November 2009, FSIS rules-
based equivalence procedures continued to be  available to countries (a) affected by 
highly pathogenic avian influenza, (b) that  failed to adequately enforce their food 
safety laws, and/or (c) where FSIS found "systemic failures" in food safety inspection procedures, including those previously found to be equivalent.  
 
• Chinese exports of non-poultry products to  the US market increased considerably 
throughout the December 2007 – 12 November 2009 period, without Congress ever 
suspending China's access to normal im port procedures applied by the FDA.
129  
 4.169  China has previously established  that Section 727 violates the GATT 1994, the Agreement  on 
Agriculture and the SPS Agreement
130, and that Section 727 cannot be justified under Article XX(b) of 
GATT 1994. The arguments set forth by China to rebut the US Article XX(b) defence also support China's SPS claims.  
2. The United States cannot sustain its argument that China and the United States did not 
consult under the SPS Agreement   
4.170  The United States continues to elevate form  over substance in addressing the Panel's 
jurisdiction over the SPS claims, maintaining its ass ertion that China did not request consultations 
pursuant to Article 11 of the  SPS Agreement . However, China's consultations request specifically  
invoked Article 11 and
 listed potential violations of specific provisions of that Agreement. 
Furthermore, the United States has not claimed that  China's consultations request affected US due 
                                                      
129 See China's second written submission, para. 1. 
130 These arguments are not repeated in detail in this submission. WT/DS392/R 
Page 40  
 
 process rights with respect to the SPS Agreement  claims. This leaves the United States' argument as 
one that is purely formalistic.  
3. China has established prima facie claims under Articles I:1 and XI:1 of GATT 1994  and 
the Agreement on Agriculture  
(a) China's claims under Article I:1 of GATT 1994 
4.171  In enacting Section 727, the United States withhe ld an advantage it accorded to all other 
WTO Members by denying only Chinese poultry products the opportunity  to access FSIS procedures 
and, thus, the possibility of being exported to the United States. China has repeatedly  demonstrated 
that "like products" in this dispute are "poultry products" hypothetically capable of accessing the 
procedures and being exported to the United St ates. While China has established a prima facie  case, 
the United States has never presented a rebuttal.  
(b) China's claims under Article XI:1 of GATT 1994 
4.172  Section 727 is inconsistent with Article XI:1 of GATT 1994, because it imposes import 
restrictions that negatively impact the compe titive opportunities for Chinese poultry products, and 
also imposes a  de facto  import prohibition on such products. The United States effectively concedes a 
violation of Article XI:1, as the only de fence it presents is under Article XX(b). 
(c) China maintains its claim under Article 4.2 of the Agreement on Agriculture  
4.173  China is confused by the US st atements asserting that China indi cated that it would no longer 
pursue its claim under Article 4.2 of the Agreement on Agriculture . China did no such thing. China 
has established a prima facie case that Section 727 is inconsistent with Article 4.2, because the 
measure results in the maintenance of quantitativ e restrictions on the import of Chinese poultry 
products.
131  The United States has not rebutted Chin a's prima facie case other than asserting a 
defence under Article XX(b) of GATT 1994, which lacks any merit.  
4. The United States has not established that Section 727 falls within the exception under 
Article XX(b) of GATT 1994 
(a) Introduction 
(i) Section 727 is not "necessary" to the protecti on of human life and hea lth under paragraph (b) 
of Article XX  
4.174  Section 727 does not fall within the scope of the exception in GATT Article XX(b) because, 
inter alia, it is not "necessary" for the protection of human or animal life and health.132  
4.175  First , Section 727 (and Section 733 before it) prohibited the entry of just one of the many 
types of food products that were imported fro m China between December 2007 and November 2009 
in ever-increasing amounts. During the time that th ese measures were in effect there was no evidence 
of any food safety problems related to Chinese processed poultry. Second , there was no imminent risk 
posed by Chinese poultry as importation was never "i mminent" during the period of December 2007 – 
November 2009. FSIS was required to conduct a udits of China's poultry processing inspection 
system, and Chinese poultry could only have been imported following a multi-month, science-based 
                                                      
131 China's first written submission, paras. 107-114. China argued this no less than 6 times in its 
opening (paras. 4, 29, 32, 83) and closing oral statem ent at the first substantive meeting (paras. 3, 17). 
132 These arguments are also releva nt to China's claims under the SPS Agreement .  WT/DS392/R 
 Page 41 
 
 
 confirmation  by FSIS that the system remained  equivalent to that of the United States. Similarly, 
China would have had to obtain an initial equivale nce determination by FSIS to export other types of 
poultry. Sections 727 and 733 were thus not even remotely "necessary" to protect US consumers from 
any alleged imminent danger. A less trade-restric tive approach that would have achieved the US' 
preferred level of protection would have been application of the standard FSIS procedures, correctly 
described by the United States in its responses to  the Panel's questions as being "based on science".133  
In sum, Section 727 does not fall within the scope of Article XX(b), as it is not "necessary" for the achievement of its stated objective. 
(ii) Section 727 does not fulfil the requirements of the chapeau  to Article XX 
4.176  The United States also has failed to establish th at Section 727 does not result in "arbitrary or 
unjustifiable discrimination between countries wher e the same conditions prevail", within the 
meaning of the chapeau  of Article XX . China has demonstrated that the de jure discrimination against 
China in Section 727 is arbitrary for several reasons , including: the lack of scientific risk assessment 
for the measure; the absence of  evidence that China's processed poultry inspection system was 
deficient; the different treatment accorded to other WTO Members such as Mexico; the different 
treatment accorded to non-poultry food products from China relative to Chinese poultry products; and 
the lack of evidence that Chin ese poultry was more likely to be contaminated or that such 
contamination was less likely to be detected in China as opposed to in other Members.
134 
(b) Various US Arguments related to its Article XX(b) defence are unsupported by the evidence 
and legally erroneous 
4.177  In its responses to questions, the United States raised various arguments in an attempt to 
justify Section 727 under Article XX(b) of GATT 1994. China addresses each one below. 
(i) China did not  have access to normal PPIA/FSIS pro cedures, by the explicit terms of 
Section 727 and its predecessor  
4.178  The United States claims that Section 727 did no t deny China's access to the PPIA, allowing 
FSIS to conduct activities "related to" China's equiva lence. These claims are irrelevant, however, as 
the explicit terms of Section 727 prohib it any action that could result in the establishment or 
implementation  of an equivalence rule for China. An FSIS document specifically states that 
equivalence verification is "pending" for China because "FY 2008 appropriati on legislation bars the 
FSIS from spending funds on import of poultry from China".135   
4.179  Yet the United States now suggests that, when read  in light of the JES, Section 727 permitted 
FSIS to take a number of e quivalence-related actions.136  This is a unjustified, post hoc attempt to 
rewrite the unambiguous, explicit wording of Section 72 7. Furthermore, legislative history only has a 
limited role under US law; only if the textual me aning is unclear should an advocate examine the 
legislative history. China notes that the interpretati on of a domestic measure is a question of fact for 
the Panel. However, even if  the Panel elects to refer to the JES, it only confirms  the extent to which 
Congress restricted the role for the FSIS in relation to China's poultry equivalence. Consistent with 
the text of Section 727, it does not authorize any funding for FSIS to implement or establish a rule in 
respect of China. At most, it permits two limited activities: first, USDA is "urged" to "submit a report" 
                                                      
133 United States' response to Panel question No. 61. 
134 China's opening oral statement at the first subs tantive meeting of the Panel, paras. 107-120. 
135 Exhibit CN-21. China has established in detail the meaning of the terms of Section 727 and its 
extremely restrictive (essentially prohibitive) effect in  China's first written submission (paras. 10-23, 30-54, 
56-60). 
136 United States' response to Panel question No. 23. WT/DS392/R 
Page 42  
 
 on China's food safety laws and, second , USDA is "directed" to submit a "plan of action" to guarantee 
the safety of poultry products from China. Neither ac tivity actually forms a part of the equivalence 
procedures and neither permits the establishment or implementation of a rule.  
4.180  Finally, the United States suggests that th e 12 May 2009 letter to China requesting 
documentation regarding China's general food safety laws was a normal part of FSIS's equivalence 
process under the PPIA. But nothing in that letter states that th e information was needed for a 
equivalence procedures – instead, it references the re port that FSIS was "urged" to submit to Congress 
under the JES. The letter did not, and could not, cr eate any expectation in China that submitting the 
requested information would result in the establishm ent or implementation of an equivalence rule.
137   
4.181  In sum, it is misleading and incorrect for th e United States to now suggest that FSIS was 
taking steps to maintain China's equivalency status for processed poultry and to establish its 
equivalency for domestically-slaughtered poultry by creating a "plan" starting in May 2009. Even 
under the most expansive interpretation, the preparati on by FSIS of a "plan of action" or a "Report to 
Congress" does not come close to fulfilling the ma ny procedures necessary to secure and maintain 
equivalence. Even if FSIS theoretically  could have performed work "r elated to" China's equivalence 
determinations, the explicit terms of Section 727 manifestly excluded the possibility of FSIS 
finalizing or maintaining a finding of equivalence for China, due to the restriction on funding for 
establishing  or implementing  a rule in Section 727.  
(ii) Section 727 was not necessary because there were no "immine nt" imports of Chinese poultry 
at the time it was enacted 
4.182  The United States repeatedly argues that Sec tion 727 was "necessary" within the meaning of 
Article XX(b) because no other country that was allegedly "imminently" able to export poultry 
products had recently experienced food safety crises . However, after claiming that Chinese imports 
were "imminent" at the time that Section 727 (and presumably 733) was enacted, the United States 
contradicts itself, pointing out that China was not in a position to immediately export poultry products 
when funding was restricted as FSIS would have to conduct an equivalen ce maintenance audit for 
processed poultry and finalize a rule for slaughtered  poultry before the relevant poultry products could 
enter the United States.  
4.183  Equivalence maintenance audits include in-c ountry meetings with officials, on-site 
inspections, and analysis of information about Chin a's inspection system. If FSIS found the system to 
be somehow deficient, it would suspend or withdraw equivalence. Similarly, the finalization of a rule 
also involves several procedural steps. At a mini mum, the as-yet-uncompleted steps would include the 
publication of a proposed rule, review of comments, and a final decision by FSIS, followed by – if 
positive – the publication of a final rule in the CFR. If started at the beginni ng, an initial equivalence 
determination would take three to five years of resource intensive work before a rule may be finalized. 
4.184  The United States confirms why FSIS was uniquely placed to determine whether general 
Chinese problems with food safety were actually  impacting China's poultry inspection system. It 
stated: "[u]nder its applicable statute and regulations, FSIS is permitted to consider any issue  relevant 
to the equivalency of another country's poultry inspection system  when it is making an equivalency 
determination".138 First , it is clear from this passage that the FSIS already had the ability to consider 
the issues of concern to the United States in the cour se of its procedures. Thus, it is those procedures, 
not Section 727, that would be "necessary" to de termine whether China's pr ocessed poultry safety and 
inspection system is reliable. Thus Section 727 ca nnot be considered "necessary" within the meaning 
                                                      
137 Such laws and information were made available to, inter alia, the United States, through the 
SPS Committee. 
138 United States' response to Panel question No. 77 (emphases added).  WT/DS392/R 
 Page 43 
 
 
 of Article XX(b). Second , if it were true that China had such  severe food safety problems, logically 
that should have made it easier  for FSIS to find and reject or withdraw equivalence. Third , FSIS 
procedures are "based on science".139  Yet Sections 733 and 727 cut off funding allowing FSIS 
scientists to conduct audits of China's  inspection regime. It is illogical to assert that Section 727 was 
necessary  to ensure FSIS would fully consider these serious issues as, by removing FSIS funding, 
Section 727 ensured that FSIS scientists and experts could not  examine these alleged problems in any 
comprehensive manner leading to an equivalence rule.  
(iii) FSIS equivalence procedures for poultry are not inherently more risky for human life and 
health than non-equivalence sa fety and inspection procedures 
4.185  The United States argues that equivalence systems involve significant risk, and that systemic 
enforcement problems would be of particular importance in the context of equivalence due to the 
reliance placed on the exporting country. However, contrary to the US suggestion, FSIS is not 
permitted to blindly  rely on the exporting country. Foreign poultry cannot enter the United States  
unless the scientific experts at FSIS affirmatively gr ant – and regularly confirm the maintenance of – 
equivalence. Under the procedures, FSIS officials must confirm that the applicant country's poultry 
inspection regime achieves sanitary results equivalent  to those of the US system. Without such an 
initial determination – which tak es several years to obtain and which has only been achieved by 
10 countries – foreign poultry cannot enter the Un ited States. Furthermore, the initial equivalence 
determination is constantly re -verified on an ongoing basis, th rough reviews, audits, and re-
inspection. Indeed, the United Stat es has pointed out that, in the ab sence of Section 727 and 733, FSIS 
would have audited China's inspection system befo re any imports from China could have entered the 
United States.  
4.186  Moreover, there is no evidence that non-equivale nce-based systems, such as those employed 
by FDA, are inherently less risky than FSIS equivalence procedures. The active involvement of FSIS 
inspectors and scientists in the establishment and a nnual maintenance of equivalence, coupled with 
enforcement of a poultry safety and inspection syst em by the exporting country, does not create a 
greater risk to human life or health than FDA rules and procedures regulating the importation of non-
poultry food products. To the contrary, FDA procedures generally regulate the safety of imports of many food products by relying on individual e xporting companies to certif y compliance with FDA's 
import requirements.
140 For the vast majority of imported food products, FDA does not appear to 
conduct any "in-country" audits prior to exporta tion to the United States. Furthermore, FDA 
inspectors are not present at every port-of-entry. Th e fact that FDA rules generally do not employ 
equivalence procedures does not mean  that FDA procedures can guarantee less risk to human life or 
health than FSIS procedures related to equivalence.  Thus, the US argument that Sections 733 and 727 
were necessary because the FSIS system is somehow more vulnerable than other import procedures cannot be sustained. To the contrary, the targeting of poultry  was both unnecessary and constituted 
arbitrary and unjustified discrimination. 
(iv) US arguments alleging a fear of a breach of  APHIS Regulations and avian influenza do not 
support a conclusion that Section 727 is necessary 
4.187  The United States incorrectly contends that S ections 727 and 733 were necessary because of a 
risk that China's poultry inspection system could not protect against the spread of poultry diseases such as highly pathogenic avian influenza (HPAI).  
4.188  China's approval to export poultry to the EU is limited to processed poultry in a hermetically 
sealed container that has been heated to at least  70 degrees. This reflects current science and OIE 
                                                     
 
139 United States' response to Panel question No. 61. 
140 FSIS Fact Sheets: Production and Inspection (Exhibit CN-61). WT/DS392/R 
Page 44  
 
 recommendations about avian influenza, includi ng the understanding that processing (cooking) kills 
the H5N1 virus and that cooked poultry cannot transmit the virus. China had obtained FSIS authorization in 2006 to export only processed poultry to the United States (and even then , only 
poultry slaughtered in the United States or an e quivalent country). Thus, there was no need for 
Sections 733 and 727 to protect domestic US poultry fro m the risk of avian influenza, since: (a) the 
virus is not transmitted via cooked poultry; and (b) China could not have exported anything other than 
cooked processed poultry to the United States at that  time, due to its limited FSIS authorization and 
APHIS avian flu restrictions.  
4.189  There was also no "imminent" risk from avian in fluenza, as FSIS audits were required before 
even fully-cooked poultry could be exported. "Animal diseases" and "enforcement" are two of the five 
risk areas evaluated by FSIS auditors. When audits  were conducted in 2004 and 2005, a period during 
which HPAI was a major worldwide concern, the FSI S found "no deficiencies" in China's handling of 
poultry diseases with respect to processed poultry, and w as satisfied with China's ability to enforce its 
poultry safety regulations. Had this not been th e case, FSIS would have denied equivalence for 
processed poultry. In addition, if Sections 733 and 727 had not been enacted, FSIS would have 
conducted a maintenance audit before China c ould have exported any processed poultry to the 
United States under the 2006 rule. Had inspectors un covered problems during this audit, FSIS could 
have withheld the confirmation of equivalence,  and no Chinese poultry would have entered the 
United States. Furthermore, if the US poultr y industry was concerned that Chinese poultry could  have 
posed a risk to US animals, or to consumer confidence, it would have opposed the removal of 
Section 727. It did not. China also notes that more  than 80 countries have been affected by avian 
influenza, including some facing significant problems in regulating food safety. The US Congress did 
not block access to FSIS procedures for these or any other countries – only for China.  
(v) The United States references anecdotal news re ports on eggs and animal feed, but provides 
no evidence of food safety problems related to processed poultry 
4.190  The United States submitted two further exhibits  (US-62 and 63), to support its claim that 
Section 733 and 727 were "necessary" to respond to poultry-related food safety issues in China. 
However, both exhibits relate to feed for poultry raised and (possibly) slaughtered in China. Under the 
terms of the established processed poultry rule, Chin a could only export poultry that had been raised 
and slaughtered in the United States (or another e quivalent country). Alleged food safety crises that 
related to contents  of the feed given to birds raised in China  could therefore not have affected: (a) the 
health at slaughter of poultry raised in the United St ates or other equivalent countries; or (b) the safety 
of processed poultry from China. China also notes th at there is no evidence that the US Congress took 
these cases of alleged contamination into acc ount when enacting Sections 727 and 733. 
(vi) The United States fails to demonstrate that china is different than all other countries in a 
manner that justifies arbitrary discrimination 
4.191  A key element of the US Article XX(b) defen ce is establishing that the same conditions do 
not prevail between China and other countries eligib le for normal FSIS procedures. The United States 
has this burden and it has not met it. It asserts gene rally that the same conditions do not prevail for 
China because no other WTO Member that had the sc ope and type of alleged food safety problems as 
China was so far along in the equivalence process, but it provides no credible evidentiary support.
141  
Pool of countries to assess whether "same conditions" prevail  
4.192  It is proper for the Panel to compare China to every  other  WTO Member to assess "same 
conditions", as each had the opportunity  to seek, achieve, and maintain equivalence. Every WTO 
                                                      
141 See, e.g., United States' response to Panel question No. 62.  WT/DS392/R 
 Page 45 
 
 
 Member except  China had the right to access normal FSIS procedures and  to possibly obtain 
authorization to export poultry if they obtained and maintained equivalent  status. Only China was 
irrebuttably  presumed  to not  be equivalent. However, even if the pool of Members are those that had 
applied for or had already been granted equivalency, China was still in the same position as these 
other countries, as elaborated below.  
Issue of "imminent" imports of Chinese poultry  
4.193  The United States acknowledges that China is "s imilarly situated" in "some ways" to WTO 
Members that had applied for equivalence. However, it then incorrectly asserts that only China was in 
the position of imminently being able to export pou ltry products and had recently experienced food 
safety crises. As China has demonstrated a bove, the United States admits that China was not in a 
position to imminently export poultry products at the time that Section 733 or 727 were enacted. 
Thus, during the pendency of those provisions, Chin a arguably posed less of a risk than other 
"equivalent" countries, such as Mexico – which w as exporting poultry to the United States when FSIS 
concluded that it was experiencing "systemic fa ilures" in its poultry inspection regime. Thus, even if 
the US' unsupported allegations of risks were true, such risks would appear to be the "same" as the 
actual  risks posed by Mexico's "systemic failure".  
Applicability of US – Shrimp  
4.194  China is similarly situated to any WTO Me mber seeking access to FSIS procedures to secure 
an equivalence determination or to maintain a prio r finding of equivalence, under the rationale of the 
Appellate Body's decision in US – Shrimp . In that case, the 'same conditions prevailing' 'between 
countries' were that each of the shrimp producing c ountries sought to be certified to export shrimp to 
the US market. The Appellate Body found that th e different treatment of exporting countries desiring 
certification in order to gain access to th e United States shrimp market constituted unjustifiable  
discrimination within the meaning of the chapeau of Article XX. The Appellate Body made a similar finding on arbitrary  discrimination. It saw no need to  examine the conditions within each of those 
countries in making these findings.  
4.195  These findings are highly relevant and analogous to this dispute. Like in US – Shrimp, the 
only way to obtain the right to export to the US ma rket is to have access to and comply with FSIS 
regulations, and all applicants are in the same positio n because all expect that these regulations will be 
applied consistent with due process and in a tran sparent and timely manner. China is in the same 
position as other Members who seek access to equivalence procedures. 
Poultry risk factors in countries seeking to export poultry to the United States
  
4.196  Even assuming arguendo  that the "same conditions" are those inside the applicant or 
equivalent countries, China was still in the same position as these other countries. Poultry 
contaminants are common to many poultry-producing countries, including countries with significant resources allotted to food safety such as the US, EU, and Japan. As to the alleged threat from avian 
influenza, in terms of the application of APHIS and FSIS rules, all other countries have generally 
been treated the same – except China. No othe r country has ever had extraordinary congressional 
action bar its access to FSIS proce dures. To the contrary, Israel, affected by HPAI in 2008, exported 
1,957,215 pounds of poultry that year to United States. 
4.197  While it provided no evidence of systemic issues relating to Ch ina's poultry inspection 
system, the United States argues that no other country allegedly experienced systemic failures in  food 
safety. The evidence in Exhibit CN-28, an audi t report from Mexico, directly contradicts this, 
showing FSIS found " systemic  failures" in three enforcement-rela ted risk areas. Yet Mexico's access WT/DS392/R 
Page 46  
 
 to FSIS procedures was never blocked by extraord inary action by Congress, and Exhibit CN-72 shows 
that poultry products were importe d from Mexico during that time. 
4.198  This evidence strongly supports China's assertions that normal FSIS procedures are a 
reasonable, and less trade-restrictive, alternative to Section 727. FSIS is clear ly capable of identifying 
and working through a wide range of problems, even systemic  failures. This evidence also strongly 
contradicts US arguments that Sections 727 and 733 did not "arbitrarily" or "unjustifiably" 
discriminate against China. It is not credible fo r the United States to argue that Mexico somehow 
presented a far less serious problem to human life a nd health. In addition, what is relevant for the 
purposes of the "same conditions" element of the Article XX chapeau  is that both China and Mexico 
export or seek to export poultry to the United Stat es, both have achieved a rule of equivalence for 
processed poultry, and FSIS procedures and resources are capable of conducting a full examination of 
each country's poultry inspection system. In sum, th e United States cannot meet its burden under the 
chapeau  of Article XX to establish that the same conditio ns do not prevail between China and other 
countries seeking to take advantage of FSIS proce dures and potentially export to the United States.  
5. China's claims under the SPS Agreement  
4.199  The United States has not yet presented a substantive defence of the SPS claims. It claims it 
will do so in its second written submission. China w ill respond to any such defences asserted by the 
United States if and when they are made.  
G. E
XECUTIVE SUMMARY OF THE SEC OND WRITTEN SUBMISSION OF THE UNITED  STATES  
1. Introduction 
4.200  Section 727 was justified under GATT Article XX(b ). The measure, which was enacted in the 
context of an ongoing equivalence de termination, was necessary to protect human and animal life and 
health against the risk posed  by Chinese poultry. Section 7 27 was necessary to ensure FSIS 
thoroughly considered China's systemic food safety problems, its widespread food safety crises, and its enactment of a new food safety law before "imple menting" or "establishing" rules that would allow 
China to export its potentially dangerous poultry to the United States.  
4.201  Throughout this dispute, China has attempted to distract the Panel from the question of 
Section 727's necessity for poultry. For example, China implies that Section 727 was not necessary 
because it did not apply more broadly to all Chinese products; however, this argument ignores the fact that poultry was the only product subject to an equivalence determinati on when Section 727 was 
enacted. Similarly, China downplays the relevance of its many food safety crises, but ignores the concerns that they raise about its ability to enfo rce its food safety laws. Finally, China argues that 
Section 727 is arbitrarily or unjustifiably discrimin atory while ignoring dis tinctions between China 
and others who have tried to e xport poultry to the United States.  
4.202  The US submission will focus on the key issues that  China has chosen to ignore. In doing so, 
the United States will rebut China's flawed ar guments and again dem onstrate Section 727's 
justification under GATT Article XX(b).  
4.203  In addition, the United States will address Ch ina's arguments, first submitted in its oral 
statement at the first substantive meeti ng, that Section 727 is subject to the SPS Agreement  and 
inconsistent with certain SPS Agreement  obligations. Any claims by China under the SPS Agreement  
are not within the Panel's terms of reference. Fu rther, China has failed to show either that the 
SPS Agreement  provisions cited by China apply to Section 727, or that Section 727 is inconsistent 
with those provisions. Finally, as China's substan tive arguments under its SPS claims are essentially  WT/DS392/R 
 Page 47 
 
 
 the same as those presented in c onnection with Article XX(b) of the GATT 1994, there is no need for 
the Panel to address these additional claims under the SPS Agreement .  
2. Section 727 is justified under GATT Article XX(b) 
4.204  Section 727 was justified under GATT Article XX( b). Section 727 was within the scope of 
the XX(b) exception because it was necessary to protect  against the risk posed by the importation of 
Chinese poultry. At the same time, Section 727 was consistent with the chapeau because it was not 
applied against China in a manner resulting in arbitr ary or unjustifiable discrimination, nor was it a 
disguised restriction on international trade.  
4.205  The United States has demonstrated that Section 727 falls under the scope of the 
Article XX(b) exception because its policy objective w as to protect human and animal life and health 
from the risk posed by Chinese poultry. Since China has not challenged this element, the 
United States will focus on issues re lated to Section 727's necessity.  
4.206  Section 727 was necessary to protect against th e risk posed by the importation of Chinese 
poultry. China has struggled with corruption, smugg ling, and the lax enforcement of its food safety 
laws. In addition, avian influenza exists in China, and China has su ffered numerous food safety crises 
in past years. As a result, China was in th e process of overhauling its food safety law when 
Section 727 was enacted. At the same time, China w as also in the midst of an ongoing equivalence 
proceeding for poultry. Therefore, Section 727 was necessary to ensure that FSIS fully considered 
China's systemic food safety problems before "establishing" or "implementing" rules that would allow China to export poultry products to the United States.  
4.207  This conclusion is consistent with the analys is used by the Appellate Body to determine 
whether a measure is necessary, which involves a weighing and balancing of multiple factors 
(importance of the policy objective, contributi on of the measure to its policy objective, trade 
restrictiveness). All of these factors support Section 727's necessity.  
4.208  Section 727 directly contributed to the protec tion of human and animal life and health by 
ensuring FSIS did not implement" or "establish" rules related to China's equivalence without fully 
considering the systemic problems with China's f ood safety system and their relevance to China's 
poultry inspection system. Before China's equivale nce application, FSIS had never before been 
confronted with a situation that presented such  severe systemic problems with food safety law 
enforcement or such numerous and widespread food safety crises. Therefore, Section 727 was 
necessary to ensure FSIS adequately  dealt with these unique issues.  
4.209  To help accomplish this task, the JES accompan ying Section 727 specifically directed FSIS 
on how to move forward with China's equivalence determinations. In accordance with the JES, FSIS 
developed an action plan shortly after Section 727 took effect. FSIS implemented the action plan's 
first three steps during 2009. FSIS reviewed and summarized all of its documentation related to 
China's equivalence application and reached out to China via letter on May 12, 2009. This letter 
included a summary of the documents FSIS had un covered and requested that China provide any 
changes to its relevant food safety laws to FSIS for review.  
4.210  FSIS needed updated documentation from China to  complete the document review step, a 
normal part of the equivalence process under the PPIA. However, because China did not provide the 
requested information, FSIS has not been able to complete its document review or any of the action 
plan's subsequent steps, such as the on-site audits , which are also part of the PPIA. If China had 
provided this information, FSIS could ha ve taken further actions under the PPIA. WT/DS392/R 
Page 48  
 
 4.211  In response to its experience evaluating Chin a's equivalence and Section 727, FSIS has 
reconsidered the extent to which the agency communicates with US trading partners and the extent to 
which it considers food safety issues that do not direc tly involve meat, poultry, or egg products. In the 
past, FSIS limited its equivalence evaluations to the information provided by the country regarding its 
food regulatory systems for meat, poultry, or egg pr oducts. Now, FSIS has expanded the scope of its 
equivalence review to consider information that do es not directly involve the products it regulates but 
have a bearing on the integrity of the country's food safety system. This new process will apply to 
China's equivalence review as well as the review of other countries. FSIS believes that this will help 
address some of the issues raised by China's equiva lence application and US consumers will be better 
protected as a result.  
4.212  During 2009, FSIS took other steps to im prove the equivalence process. For initial 
equivalence determinations, FSIS revised the Sel f-Assessment Tool it asks exporting countries to 
submit as a part of their initial application. Sim ilarly, for ongoing monitoring of equivalent countries, 
FSIS improved its audit methodology to better ensure the ongoing adequacy of system controls after a 
country has been found equivalent. FSIS believes th ese new processes will be more effective and has 
requested all of its trading partners, including China, adhere to them.  
4.213  In response to the issues raised  by China's equivalence application, the rest of the US 
Government has also taken action to evaluate a nd address the risks posed by Chinese poultry imports. 
In June 2009, the House Agriculture Appropriations  Subcommittee held a hearing to examine "the 
process the US Department of Agriculture used to determine China's equivalency to export processed 
poultry to the United States."  USDA also relea sed a report in June 2009 thoroughly examining the 
safety of food imported from China. Further, in March 2009, President Obama created a Food Safety 
Working Group focused on enhancing US food saf ety laws, including improving the United States' 
ability to ensure the safety of imported food from Ch ina and other countries. These actions all made a 
material contribution to the protection of human and animal life and health, the vitally important 
policy objective of Section 727.  
4.214  China argues that its widespread food safety cri ses are not relevant to Section 727's necessity. 
The United States disagrees. In fact, China's melami ne crisis and many othe r non-poultry crises are 
relevant to an equivalence decision because they ra ise questions about a country's ability to enforce its 
food safety laws. And enforcement problems are pa rticularly troubling in the context of an 
equivalence regime. The reason for this is th at after FSIS has made its initial equivalence 
determination for a particular expor ting country, it relies on that country to enforce its laws to ensure 
that the US level of sanitary protection is being me t. And if the exporting country fails to enforce its 
laws, it could pose a direct risk to the life and health of those who consume the poultry produced in potentially dangerous conditions.  
4.215  China argues that Section 727's necessity is underm ined by the fact that the measure did not 
apply to other Chinese products. In essence, China's argument appears to be that a Member may not 
take action to protect life or health from the risk posed by a particular product until after that Member 
has evaluated the risks posed by all products, and any action must be comprehensive with respect to 
all products. But of course nothing in Article XX(b ) says this, nor does Article XX(b) say that a 
Member must delay action to protect life or health  until after such a comprehensive approach can be 
put in place. Not only does China's a pproach have no basis in the text of Article XX(b), but it does not 
make sense to say that Members agreed that they could not apply measures to protect life or health 
with respect to particular products, but only with re spect to all products. It is clear that the delays 
inherent in such an approach, and the resultant ri sks to life and health, would not be acceptable to 
Members.  
4.216
 In addition, there were several very good reas ons why Section 727 app lied only to poultry. 
First, poultry is subject to FSIS's equivalence re gime, which is different from FDA's regime for  WT/DS392/R 
 Page 49 
 
 
 ensuring the safety of the products under its jurisdic tion, which include all of the food products China 
has exported to the United States to date. While  FSIS and FDA share a similar goal – namely, 
ensuring that imported food is safe – they use di fferent legal frameworks to achieve this goal.  
4.217  Under FSIS's equivalence system, countries desi ring to export an FSIS-regulated product to 
the United States must apply to FSIS for appr oval. FSIS's approval process examines whether a 
country's inspection system achieves the same leve l of sanitary protection as the US system. If FSIS 
determines that the foreign country's system is equiva lent, the country is then approved to export that 
product to the United States. Although FSIS conducts  follow-up audits, FSIS generally relies on the 
exporting country to enforce its laws to ensure that  its inspection system con tinues to achieve the US 
level of sanitary protection after the initial determina tion is made. If a country fails to enforce its laws, 
this level of sanitary protection may not be maintained. 
4.218  By contrast, FDA does not require an exporting coun try's system to be found equivalent to the 
US regulatory system prior to allowing the entry of food products. Rather, FDA approaches compliance on a firm-by-firm basis, and any firm whose products comply with applicable FDA requirements can ship to the United States. When  the product reaches the US border, it is then 
examined for violations of FDA requirements. If a violation is found, FDA works with the firm to 
have the product brought into compliance. If the product cannot be brought into compliance, it is 
re-exported or destroyed.  
4.219  These differences between the regulatory regimes ar e relevant to the question of Section 727's 
necessity. The reason is that China's lax enforcement of  its food safety laws raise particular concerns 
in the context of an equivalence regime that re lies on the exporting country to enforce its laws to 
ensure that the US level of sanitary protection is ma intained that may not be raised in other contexts. 
Thus, Section 727 was necessary in the context of FSIS 's equivalence regime to ensure that China did 
not export potentially unsafe poultry to the United States.  
4.220  Second, China had never before tried to e xport a product under FSIS's jurisdiction to the 
United States, and before China's poultry application,  FSIS had never before been faced with a review 
of any food inspection system w ithin China. Therefore, FSIS was not accustomed to dealing with a 
country with such severe food safety problems. Given the unique nature of the task FSIS was facing, Section 727 was necessary to ensure the agen cy more thoroughly considered its ultimate 
determination on the equivalence of China's poultry inspection systems. Further, because poultry was the only product from China with a pending equivalence application, Section 727 was targeted to only affect the equivalence of poultry products.  
4.221  Third, China's poultry industry has suffered from food safety crises. For instance, in 2008, 
melamine was found in animal feed that was cons umed by chickens in China and in eggs laid by 
Chinese chickens. As a result of this, China's Health  Secretary stated that China would begin testing 
chicken meat for melamine. Similarly, in 2006, ducks and hens in China's Hebei and Zhejiang 
Provinces were fed carcinogenic red dye so their red-yolk eggs would sell for a higher price. Poultry 
from China was also smuggled into the United States in 2006. Further, China is a country where avian 
influenza is known to occur. This is of particular  concern due to China's problems with lax food safety 
enforcement. Under APHIS regulations to prevent th e spread of avian influenza, any poultry exported 
to the United States must be fully cooked or ot herwise processed sufficiently to kill the avian 
influenza virus. Thus, China's poor enforcement tr ack record raised concerns about whether Chinese 
authorities would enforce APHIS's requirements to protect against the potential spread of avian 
influenza. 
4.222  Finally, Section 727 is not th e only measure that the United States has taken to address the 
risk posed by unsafe Chinese imports. In fact, FDA has issued import alerts against Chinese products 
that it has determined are unsafe, including red mel on seeds, bean curd, dried fungus and mushrooms, WT/DS392/R 
Page 50  
 
 fresh garlic, honey, farm-raised fish, wheat gluten, rice protein products, shrimp, eel and milk 
products. FDA refuses a much higher proportion of food from China than other countries. Further, FDA in 2007 also negotiated a Memorandum of Understanding (MOU) with China to address its concerns about the melamine crisis.  
4.223  Despite the numerous problems FDA has had w ith Chinese imports, China continually refers 
to its increasing exports of these products in an  attempt to undermine Section 727's necessity. For 
example, China rhetorically asks why the US Congress did not cut out funding to allow the import of products regulated by FDA. Putting aside whether Ch ina believes it would be advisable to take this 
action, the implication that the United States has not acted against other unsafe Chinese products is 
simply untrue. The United States will and does take  appropriate measures to protect human life and 
health when it is necessary to do so. For exampl e, while Section 727 was necessary to achieve this 
goal in the context of poultry, FDA's import alerts and an MOU were necessary in the context of other 
Chinese food products.  
4.224  If China's export statistics prove anything, it is that the United States is willing to trade with 
China when it can be confident that the products China is exporting are safe. That said, the fact 
remains that FDA's treatment of products under its jurisdiction is simply not relevant to whether 
Section 727 was necessary to protect against the risk  posed by poultry imports from China. The Panel 
need not examine whether the United States could have or did take add itional steps to address 
concerns about other Chinese food products. Th e only question before the Panel is whether 
Section 727 was necessary to protect human and an imal life and health based on concerns about 
Chinese poultry. As the United States has demonstrated, this was the case.  
4.225  While the United States bears the burden to de monstrate that Section 727 was necessary in 
accordance with Article XX(b), it does not have to "s how in the first instance, that there are no 
reasonable alternatives to achieve its objective."  Rather, the complaining party must put forward a 
reasonably available WTO-consistent alternative. In  the instant dispute, China has failed to present a 
reasonably available alternative that achieves th e US level of protection, which requires that 
processed and slaughtered poultry be safe. China's pr oposed alternative – "the application of normal 
FSIS procedures" – is not an alternative at all. Ra ther, China's suggestion that the US adopt this so-
called "alternative" is simply another way of say ing that Section 727 was not necessary in the first 
place. In this sense, China is making a circular argument.  
4.226  Section 727 also complies with the Article XX( b) chapeau because it is not applied in a 
manner that results in arbitrary or unjustifiable discrimination against China nor is it a disguised 
restriction on trade. Because China does not appear  to be challenging Section 727 as a disguised 
restriction on trade, the United States will focus its discussion on the issue of discrimination. 
4.227  Section 727 did not discriminate against China in an arbitrary or unjustifiable manner. At the 
time the measure was enacted, Chinese poultry was the subject of an ongoing equivalence review. An 
action taken in the context of an equivalence review  of a particular country's food inspection system 
will, by its very nature, make explicit reference to  that country. The country-specific nature that is 
inherent in an equivalence review does not, as Chin a seems to argue, automatically raise questions of 
arbitrary or unjustifiable discrimination.  
4.228  In addition, Section 727 did not deny China acce ss to the PPIA. The legal impact of an 
appropriations restriction is limited to its explic it terms. Section 727 states that "None of the funds 
made available in this Act may be used to establis h or implement a rule allowing poultry products to 
be imported into the United States from ... China."  S ection 727's legal effect is limited to prohibiting 
the "establishment" or "implementation" of equi valence rules for Chinese poultry, nothing more. In 
accordance with the action plan accompanying Section 727, FSIS was permitted to engage in 
activities related to the equivalence rulemaking durin g fiscal year 2009. This includes actions that are  WT/DS392/R 
 Page 51 
 
 
 part of the PPIA. Therefore, China was not di scriminated against vis-a-vis other WTO Members 
because it was not denied access to the PPIA.  
4.229  China also argues that it was di scriminated against because the United States is not applying 
the same ALOP to Chinese poultry as it is applyi ng to poultry from other WTO Members. China's 
assertion is untrue. In general, the United States requ ires that poultry be safe. However, requiring the 
same ALOP for all Members who are seeking to export poultry products to the United States does not 
mean that all of these Members will have identical  experiences with the equivalence process. Some 
Members will take a long period of time to achieve  equivalence, while others may never be found 
equivalent. These different experiences by Memb ers seeking to export poultry products to the 
United States make sense. In order to ensure that its  ALOP is met, the United States may have to take 
different steps in different circumstances in orde r to respond to the particular challenges that each 
application presents.  
4.230  China also compares itself with those WTO Members who have achieved equivalence for 
their poultry inspection systems and are currently eligible to export poultry products to the 
United States in an attempt to show discriminati on. However, Section 727 did not arbitrarily or 
unjustifiably discriminate against China vis-a-vis th ese Members because the same conditions did not 
prevail in any of them as prevailed in  China when Section 727 was enacted. 
4.231  From a broad standpoint, China is unlike any of the other Members whose poultry inspection 
systems have been found equivalent with that of th e United States. The reason for this is that none of 
these Members have experienced widespread food safety  crises that have raised fundamental concerns 
about the Member's ability to enforce its laws. In a ddition, none of these countries have dealt with an 
issue like the melamine crisis, which the head of  the World Health Organization dubbed "one of the 
largest food safety events the agency has had to deal with in recent years."  Thus, it is not accurate to 
say that the same conditions that prevail in these Members prevailed in China at the time that China 
was going through the equivalence process.  
4.232  Another distinction between China and these Member s is that many of them had been trading 
with the United States under an "equal to" regime fo r many years without significant incident before 
their applications for equivalence were consider ed. Indeed, FSIS's equivale nce process only dates to 
1995 and the adoption of the Uruguay Round Agreements  Act. Before that time, Canada, France, 
Great Britain, Israel and Hong Kong had already been exporting poultry products to the United States 
under FSIS's old regime and all of these countries had a history of supplying safe products without 
incident. Thus, at the time these WTO Members were subject to FSIS's equivalence process to 
determine whether they could continue to import poultry products to the United States, FSIS already 
had confidence in their systems for ensuring the safet y of the poultry that they produced. Therefore, 
their situations were different from China's, wh ich had never before exported poultry to the 
United States when it applied for equivalence in 2004.  
4.233  Many of these Members also had a history of exporting meat products to the United States at 
the time they applied for equivalence for poultry.  For example, Chile was found eligible to export 
meat products to the United States in 2005 before  it was found eligible to export poultry in 2007. 
Thus, at the time FSIS was examining Chile's poultr y inspection system, it already had familiarity 
with Chile's inspection controls and had confidence that Chile could be relied upon to enforce its law 
to ensure that the poultry it exported to the Unite d States was produced in conditions that met the US 
level of sanitary protection. Similarly, both Austra lia and New Zealand had exported meat products at 
the time they were found equivalent for ratites.  
4.234  Among the equivalent Members that China compares itself with, it singles out Mexico as a 
Member who has had problems with food safety enfo rcement. While it is true that FSIS found some 
deficiencies during audits of Mexico's meat and pr ocessed poultry system, it is not unusual to find at WT/DS392/R 
Page 52  
 
 least some deficiencies during audits of food regu latory systems. In genera l, when deficiencies are 
found, the Member is advised of the deficiencies and then initiates appropriate corrective actions. 
During the next audit, FSIS verifies the effectivene ss of the corrective actions taken by the country. 
This is the process that was followed after the Me xico audits. Because Mexico took immediate and 
appropriate actions, FSIS continues to have confidence in the ability of Mexico's meat and poultry 
inspection system to produce products for export to the United States that are wholesome and not 
adulterated. Further, the United States is also not aware of such widespread crises in Mexico as have 
occurred in China and is not aware of any broad systemic problems that raise significant questions 
about Mexico's ability to enforce its own laws to th e extent that they do with China. Finally, it is 
notable that Mexico is still not equivalent for slaughtered poultry.  
4.235  China was also not discriminated  against vis-a-vis other countries that China alleges have 
food safety enforcement problems. For example, Ch ina notes that "in Bangladesh, reports indicated 
that two children died and more than forty people were sickened with viral encephalitis contracted 
from eating poultry."  The reason this comparison do es not prove discrimination is simple – unlike 
China, Bangladesh has not filed an equivalence app lication for poultry and is not actively seeking to 
export to the United States. As a result, even if Bangladesh's food safety problems, and in particular 
its problems with enforcement, were established a nd shown to be of the same magnitude as China's, 
China is not being discriminated against vis-a-vis Bangladesh.  
4.236  Finally, China was not discriminated against vis-a-vis all 151 other WTO Members. First of 
all, as the United States has explained, China con tinued to have access to the PPIA. Second, only a 
small subset of these 151 Members had submitted an e quivalence application and shown an interest in 
exporting poultry to the United States. Further, among the 28 Members seeking to export to the 
United States, none of them was as far along in th e process as China when Section 727 was enacted. 
Finally, among the majority of those Members who have submitted equiva lence applications for 
poultry, and certainly among those whose have ma de significance progress, the United States is not 
aware of problems of the same magnitude as exist in China. China even c ites one of these Members, 
Korea, as an example of a Member "known for requiring strict levels  of sanitary protection."  This 
fact alone would seem to distinguish Korea from China.  
4.237  Thus, although China may compare itself to numerous other Members and claim that it is 
being discriminated against when compared with  these Members, this is simply not the case. 
Section 727 was not applied against China in a manne r that resulted in arbitrary or unjustifiable 
discrimination. To the contrary, the measure was ju stified by legitimate concerns that existed with 
regard to China, and the measure did not arbitrar ily or unjustifiably discriminate against China vis-a-
vis any other WTO Member.  
3. China has failed to show that Section 727 results in a breach of any obligation under the 
SPS Agreement  
4.238  In it oral statement, China for the first time alleged that Section 727 was enacted for food 
safety purposes and is subject to several different obligations of the SPS Agreement . As the 
complaining party, China has the burden of proving that Section 727 meets the definition of an SPS measure and of explaining how each SPS provision cited applies to the measure. But China has 
not met its burden, and China mainly relies on inapposite provisions of the SPS Agreement .  
4.239  In particular, the central provisions of the SPS Agreement  on equivalence processes are 
contained in Article 4, Equivalence. Article 4 recognizes that Members may adopt equivalence-based 
regimes to ensure the achievement of their ALOP, and provides certain obligations with respect to 
equivalence-based systems. Equivalence systems are premised on the differential  treatment of 
products from different WTO Members. That is, under Article 4.1, importing Members need only 
accept the equivalence of SPS measures in exporting countries if the exporting Member objectively  WT/DS392/R 
 Page 53 
 
 
 demonstrates that the measures meet the importing Member's appropriate level of protection. 
Likewise, under Article 4.2, recognition agreements  need not be reached with all Members. The 
existence of SPS Article 4 helps show that China' s basic approach is flawed. The question is not 
whether China is treated differently than other Me mbers – indeed, the course of proceedings and the 
outcome of each equivalence determination n ecessarily will be based on the specific facts and 
circumstances of the exporting Member's SPS measures.  
4.240  To the extent that China wish ed to invoke disciplines under the SPS Agreement , China had 
the option of claiming a breach of the fundamental equivalence provision under Article 4. China, 
however, chose not to cite Article 4. Instead, China cited other SPS provisions that are unrelated to 
equivalence determinations, or th at, at most, do not add anything to the issues under Article XX that 
have been briefed by the parties.  
4.241  Articles 2.2 and 5.1. China has not shown that Article 2.2 and 5.1 of the SPS Agreement  apply 
to a measure – such as 727 – specifying the pr ocess to be used in the course of an ongoing 
equivalence determination. China's logic is vastly  over-simplistic, ignores the context provided by the 
language of other provisions of the SPS Agreement , and (if applied) would result in absurd and often 
circular interpretations. As the panel discussed at length in the EC –Approval and Marketing of 
Biotech Products  dispute, the SPS Agreement  cannot be applied in such a "mechanistic fashion".  
4.242  Consider, for example, a procedure or requirement adopted in the course of conducting a risk 
assessment being undertaken in the application of a food safety measure. By the type of mechanistic 
reading adopted by China, the risk assessment pr ocedure would itself be an SPS measure, and would 
need to be based on scientific ev idence and a risk assessment under Articles 2.2. and 5.1. And on it 
would go: any secondary procedure adopted to find a scientific basis for th e initial risk assessment 
procedure would itself require a scientific basis. This absurd result cannot be the proper way to interpret the broad scope of Articles 2.2/5.1 ("any SPS measure"), combined with the broad definition 
of "SPS measure" in Annex A.  
4.243  In EC – Approval and Marketing of Biotech Products , the panel addressed this interpretive 
issue by examining the context of other SPS Articl es, and finding that Article 5.1 was intended to 
require a scientific basis not for any measure th at might fall under Annex A, but only for measures 
"applied for achieving the relevant Member's ap propriate level of sanitary or phytosanitary 
protection". Applying this type of reasoning to the present dispute, it is the PPIA itself – not 
Section 727 – which achieves the US ALOP by requi ring equivalence of the regulatory regimes of 
exporting Members. Section 727 does not itself provide the level of protection; rather, Section 727 is 
a procedural requirement adopted in the course of an ongoing equivalency review. As such, the 
SPS Agreement  cannot be mechanistically interpreted – as  China suggests – as requiring that this 
measure be based on sufficient scientif ic evidence or a risk assessment.  
4.244  Moreover, the process of determining equivale nce for an exporting Member's SPS measures 
is not the same as the process of performing a ri sk assessment of products imported from another 
Member. The determination that poultry poses a risk of being unsafe, and therefore that measures are 
needed to protect against that risk, pre-dates Secti on 727 and applies regardless of origin. Indeed, it is 
not contested in this dispute that imported poultry can pose a risk of being unsafe. Accordingly, the issue is not whether there is a basis for measures to ensure that poultry is safe. The only real issue is 
whether the proper procedure was being followed to  make the determination as to whether China's 
measures are equivalent to US measures for poultry. Th is is not an issue for Article 2.2 or 5.1, but 
rather for Article 4.  
4.245  Article 2.3
. It is uncertain whether Article 2.3 is  intended to apply to every procedural 
requirement adopted in the course of operating SPS m easures, or whether – like Articles 2.2 and 5.1 – 
Article 2.3 should be applied to substantiv e SPS measures intended to achieve the importing WT/DS392/R 
Page 54  
 
 Member's ALOP. Similarly, it is unclear whether, in the context of equivalency-based regimes, 
Article 2.3 was intended to apply in addition to th e main SPS equivalence provision (Article 4.1). As 
noted, by their very nature, equivalence-based regi mes must discriminate between different Members. 
Article 4.1 provides a specific type of claim that exporting Members may bring: namely, that they have objectively demonstrated equivalence to  the importing Member's SPS measures. China's 
submissions have addressed none of these issues. 
4.246  In the context of this dispute, the Panel has no need to reach any issue under Article 2.3. The 
language of Article 2.3 mirrors the language of the Article XX chapeau, and the United States has 
already explained why the US measure meets the chap eau requirements. Similarly, China's Article 2.3 
arguments are essentially the same as China's positi on regarding the application of the Article XX 
chapeau. Thus, in the context of this particular dispute, the Panel would have no need to address 
Article 2.3 because the very same issues have been examined under the Article XX chapeau.  
4.247  Article 5.5
. China's argument as to why Section 727 is inconsistent with  obligations under 
Article 5.5 of the SPS Agreement  is without merit – it fundamentally misconstrues the SPS Agreement  
and the US measure at issue. China has not show n, and cannot show, that Section 727 resulted in 
distinctions in levels of protecti on in different situations. The PPIA establishes the le vel of protection 
for poultry, not Section 727: the basic question evaluated under the PPIA is whether each exporting 
Member's poultry safety system will result in th e same level of protection as the US system. And 
indeed, this is the fundamental description of "equivalence" provided under Article 4 of the 
SPS Agreement .  
4.248  China's Article 5.5 argument also confuses th e concepts of the ALOP and the measures 
applied to achieve the ALOP. A disagreement about  whether, for example, a measure results in 
arbitrary discrimination under Article 2.3 or the Article XX chapeau does not automatically create a 
claim under Article 5.5 of the SPS Agreement . In short, under China's approach, any difference in the 
measures applied by a Member to various produc ts would by definition mean that there is a 
distinction in the ALOP sought to be achieved by that Member. China's approach is incorrect – the 
SPS Agreement  is clear that these two concepts are separate and distinct.  
4.249  Article 5.6 . The response of the United States to China' s Article 5.6 claim is similar to that 
with respect to China's SPS Article 2.3 claim: Ch ina has not shown that Article 5.6 applies to a 
procedural requirement adopted in the context of an equivalency determina tion. Article 5.6 does not 
appear to apply to every procedural requirement  adopted in the course of operating SPS measures. 
Instead, it appears to apply to substantive meas ures "establishing or maintaining" the importing 
Member's ALOP. In addition, it is difficult to see how the language of Article 5.6 applies in the 
context of equivalence determinations. In an e quivalence regime, it is the exporting Member that 
chooses the SPS measures  intended to achieve a level of protec tion, and the question for the importing 
Member is whether those measures achieve the result of  equivalence. In this context, it is hard to 
apply Article 5.6, which turns on whethe r SPS measures chosen by the importing Member  are more 
trade restrictive than required.  
4.250  Article 8 and Annex C . China's arguments regarding allege d "undue delay" under Article 8 
and Annex C(1)(a) of the SPS Agreement  fail to show that Section 727 breaches those provisions. 
Article 8 and Annex C of the SPS Agreement  apply to "control, inspecti on, and approval procedures," 
which do not include equivalence de terminations described under SPS Article 4. In addition, China's 
Annex C "undue delay" claim adds  very little, if anything, to the substance of China's arguments. 
Rather, China's Annex C argument is concluso ry, merely stating that "China has already 
demonstrated, in connection with its other claims", that Section 727 is lacking in "justification" and 
results in "discrimination". But to the contrary , as the United States has shown, Section 727 falls 
squarely within the Article XX(b) exception and is both necessary under the meaning of 
Article XX(b), and not discriminatory under the meaning of the chapeau.   WT/DS392/R 
 Page 55 
 
 
 H. EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT OF CHINA AT THE SECOND 
SUBSTANTIVE MEETING OF THE PANEL  
1. Section 727 is inconsistent with the SPS Agreement  
4.251  Section 727 and its predecessor violate multiple provisions of the SPS Agreement . The US 
response to China's SPS claims generally does not address the substance  of China's SPS claims. The 
United States has never stated that Section 727 is not an SPS measure and it acknowledges that the 
purpose of its "law", Section 727, is the protec tion of the life and health of US consumers from 
potentially contaminated foods.  
(a) Section 727 is not an intermediate step in FSIS equivalence procedures 
4.252  Section 727 is not an "intermediate" step in  an "equivalence review". The CFR and FSIS 
documents describe the equivalence process in de tail and neither refers to Congressional action 
blocking the application of procedures to a count ry for a potentially unlimited period of time. The 
PPIA is a separate law from Section 727. Thus, legal questions such as whether the  SPS Agreement  
applies to every incremental step, or "secondary procedure", taken to apply an SPS measure – are  not 
before this Panel. 
4.253  The US "intermediate" step argument appears to be based on EC – Approval and Marketing 
of Biotech Products  – the reasoning from which is inapplicable to Section 727 for at least five key 
reasons. First,  this Panel is not faced with a situation where the normal process for product approval 
has been delayed for all producers – only China. Second , unlike the measure in EC – Approval and 
Marketing of Biotech Products , Section 727 is clearly a "law". Third , as 727 applies a "less than zero 
tolerance" ALOP to poultry from China, it clear ly implies a particular level of protection. Fourth , 
China had already been granted equivalence by  FSIS for processed poultry, and thus the key 
"pre-marketing approval requirement" had been satisfied and 727 is clearly the source of the ban. 
Fifth , 727 set out a "particular mode or course of action" and, with the JES, established its own 
"procedures".  
(b) 727 is subject to Articles 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, and 8 of the SPS Agreement  
4.254  The United States claims that equivalence procedures are only subject to a limited subset of 
obligations in the SPS Agreement , primarily Article 4. On this basis, the United States claims that 
Articles 2.2, 2.3, 5.1, 5.6, a nd 8 do not apply to Section 727; according to the United States, only 
Article 4 should apply to Section 727.  
4.255  Section 727 cannot  be considered part of the FSIS equivalence procedures. Even assuming it 
was in arguendo , and if the US Article 4 argument were ac cepted, it would mean that even the basic 
rights and obligations in Article 2 of the SPS Agreement would not apply to equivalence measures. 
This would create an enormous gap in the SPS disci plines. SPS measures can take a variety of forms, 
and equivalence measures are not singled out for special treatment under Annex A(1). Nothing in 
Article 4 explicitly exempts equiva lence-related SPS measures from any of the other disciplines in the 
Agreement. And where the drafters intended to establish an exception to the disciplines of the 
SPS Agreement , such exceptions are made explicit in the text, e.g., Articles 2.2 and 3.1.  
4.256  The US argument would transform Article 4 into a safe haven allowing Members to apply 
equivalence-related SPS measures in, for example, a discriminatory manner, or without scientific 
justification. But Members cannot av oid fundamental obligations in the  SPS Agreement  (such as 
Article 2) by inserting the word "equivalence" in an SPS measure. Furthermore, China's challenge is 
not to the PPIA or the FSIS equivalence proce dures. China's challenge is to Section 727 , a measure 
wholly distinct from the US equivalence procedur es, which prevents importation of Chinese poultry.  WT/DS392/R 
Page 56  
 
 (c) China has sustained its burden of proving a violation of Article 5.5 of the SPS Agreement  
4.257  Unlike China's other claims, the United States app ears to accept that Section 727 is subject to 
Article 5.5 of the SPS Agreement , and therefore addresses the substance of that claim. These US 
arguments, however, fail to rebut China's prima facie case.  
(i) The two situations identified by China are comparable under Article 5.5 of the 
SPS Agreement 
4.258  The United States asserts that China has not shown that Section 727 resulted in distinctions in 
levels of protection in different but comparable situations, and argues that "it is the PPIA that 
establishes the level of protection for imported poultr y", not 727. However, 727 is legally distinct 
from the PPIA, and it reflects the strict  ALOP applicable to only China. 
4.259  Different situations may be compared if "they present some common element or elements 
sufficient to render them comparable". In EC – Hormones , the Appellate Body found that situations 
involving the same substance and the same  health risk were "comparable". In Australia – Salmon , the 
Appellate Body found that in comparing different s ituations "it is sufficient for these situations to 
have in common a risk of entry, establishment or spread of one disease
 of concern". This confirms 
that the two sets of situations described by Chin a are comparable under Article 5.5, based on common 
potential contaminants. These situations are: first, the importation of poultry versus non-poultry 
products from China; and, second , the importation of Chinese poultry versus poultry from other WTO 
Members.  
4.260  First , in relation to poultry products, the United States has mentioned pathogenic bacteria 
such as Salmonella and Campylobacter as potential contaminants. It has al so discussed avian flu. It is 
undisputed that these contaminants are not unique to China. Based on the shared risk of their 
transmission, these situations are "comparable" under Article 5.5.  
4.261  Second , Chinese poultry and Chinese non-poultry foods also share one or more potential 
contaminants. Per the logic of the JES and US arguments, any food product from a country 
experiencing an alleged food safety crisis coul d be contaminated, including with the same 
contaminant. For instance, Salmonella , which the United States has cited in connection with poultry, 
can also affect other food products. The shared risk of  transmission of the same contaminant via the 
importation of different food products from Chin a thus renders the second set of situations 
"comparable" under Article 5.5.  
4.262  China is not  arguing that any time a different measure is imposed in respect of different but 
comparable situations, there is necessarily a violati on of Article 5.5. Instead, Article 5.5 prohibits the 
application of arbitrary  or unjustifiable  distinctions in ALOP in different but comparable situations, if 
such distinctions results in discrimination. China has demonstrated that in this case, the distinction in 
ALOPs is arbitrary and unjustifiable.  
(ii) The United States applies distinct ALOPs to comparable situations 
4.263  The United States asserts that the ALOP fo r all imported poultry, including poultry from 
China, is that reflected in the PPIA. But this  facile assertion ignores the fact that normal FSIS 
procedures were not, and could not be, applied to China for two years. 
4.264  Because the United States has not specified th e ALOP for Section 727, China has deduced 
that Section 727 reflects a level of sanitary protection of lower than zero risk tolerance. Even if 
Chinese poultry was the safest poultry in the worl d Section 727 would still prevent its importation 
into the US. In contrast, all other WTO Members have the possibility, under normal FSIS procedures,  WT/DS392/R 
 Page 57 
 
 
 of obtaining equivalence and exporting to the United States. Section 727 (and 733) thus resulted in a 
much stricter ALOP than that normally consider ed appropriate for imported poultry under the PPIA: 
that imported poultry must be "safe".  
4.265  The US ALOP has also not been specified in respect to non-po ultry food products. China has 
deduced it based on the SPS measure applied to th em: the FDA import procedures. FDA procedures 
continued to be funded and ac tive while 727 and 733 were in e ffect. During this period, over 
$5 billion of non-poultry food products were imported from China. These continued imports 
necessarily reflect a less strict ALOP than 727's less than zero tolerance.  
(d) In addition to Article 5.5, Secti on 727 is inconsistent with Articles 2.2, 2.3, 5.1, 5.2, 5.6, and 8 
of the SPS Agreement  
4.266  The US asserted that Articles 2.2, 2.3, 5.1, 5.6,  and 8 do not apply to 727 because it is an 
"intermediate measure", and offers no substantiv e defences to China's claims under these provisions. 
China refers the Panel to its earlier arguments and addresses just two issues here: 
4.267  First , China confirms that it has brought a separate claim under Article 5.2. Second , 
Section 727 violates Article 8 because it resulted in an unjustifiable delay of nearly two years in the 
appraisal of China's compliance with the US requirements for imported poultry.  
4.268  The United States incorrectly claims  that Artic le 8 and Annex C do not apply to Section 727, 
based on the argument that equivalence procedures ar e only subject to Article 4. Apart from the fact 
that Section 727 is not part of any US equivalence procedures, Annex C does indeed  apply to 
Section 727. China agrees with the US that the lis t of measures covered by Article 8 is "inclusive 
rather than exhaustive". 
(e) SPS violations cannot be justified on the basis of GATT Article XX(b) 
4.269  The SPS Agreement  provides specific "obligations which are not already imposed by GATT", 
and which are "additional" to the requirements of  Article XX of GATT. There is no presumption of 
consistency with the SPS Agreement for measures that are found to be consistent with GATT 
Article XX(b). Therefore, even if the US demonstrat ed that Section 727 fell within Article XX(b), this 
would not be sufficient to defend against China's SPS claims.  
(i) Violations of GATT 1994 and of the Agreemen t on Agriculture cannot be justified under 
Article XX(b) 
(f) Section 727 was not "necessary" 
4.270  A "necessary" measure is one that is close to  "indispensable" for the achievement of an 
objective. Section 727 does not meet that test. First , there were no imminent poultry imports from 
China. Second , Section 727 actually undermines the protection of US consumers by denying funding 
to the very agency able to examine the condition of China's poultry regime. Third , 727 and 733 were 
not enacted as part of a general program to enhance food safety.  
(i) Section 727 did not materially contribute to its objective 
4.271  The Appellate Body has explained "when a measu re produces restrictive effects", it cannot be 
considered necessary unless its contribution to the achie vement of its stated objective is "material". 
Sections 727 and 733 did not materi ally contribute to protecting human life and health from 
"contaminated foods". To the contrary, they prevented FSIS from conducting science-based analysis 
that would have uncovered a ny risk of contamination. WT/DS392/R 
Page 58  
 
 (ii) FSIS procedures are a reasonably availa ble alternative to Section 727  
4.272  The conclusion that 727 and 733 were not "necessary" is confirmed by the existence of an 
alternative measure: the normal FSIS equivalence pro cedures. They were reasonably available, would 
achieve the same objective as Section 727, and would do so in a far less trade-restrictive manner. 
Further, as FSIS experts were aware of press reports of  alleged food safety crises in China, they would 
have paid close attention to whether such a lleged crises had any impact on poultry production. 
Logically, this makes it more , rather than less, likely that FSIS would have  identified any problems, 
weighing against  the need for Congress to suspend FSIS procedures. 
4.273  The US preferred level of sanitary protecti on for imported poultry is set by the PPIA as 
follows: imported poultry must be "safe". The FSI S procedures are the "implementing regulations" for 
the PPIA. Therefore, by definition, they meet the le vel of sanitary protection imposed by that law. The 
new US post hoc  "policy objective" for Section 727 is different: to ensure that FSIS "fully 
consider[ed] China's systemic food problems". Bu t Section 727 severely restricted FSIS' activities, 
cutting off all funding for the evaluation of China's poultry inspection system FSIS would have otherwise conducted. Thus, the US assertion that sta ndard FSIS procedures are "not an alternative at 
all" is clearly erroneous. 
(g) Section 727 is inconsistent with the re quirements of the Article XX chapeau 
4.274  The United States has also failed to establish that Section 727 meets the requirements of the 
chapeau to Article XX. China has shown that Sec tion 727 is applied in a manner that constitutes 
arbitrary and unjustifiable discrimination between  China and other WTO Members where the same 
conditions prevail. China notes its earlier submi ssions, where the evid ence demonstrates that: First , 
during the pendency of Sections 727 and 733, FSIS procedures were available to all WTO Members 
except China despite the fact that it was one of just 10 equivalent WTO Members; Second , China 
exported to Japan, Korea and the EU  while 727 and 733 were in effect; Third ,  there is no evidence 
that any alleged general food safety problems affected China's poultry safety regime; Fourth , the 
United States imported approximately  $5 Billion of non-poultry food annually; Fifth , unlike 727, 
FDA always worked within its procedures; Sixth , during 727, FSIS used its normal procedures to 
address "systemic" and "deeply rooted" problems in other WTO Members; and finally ,  during 
Section 727, over 80 other  Avian Influenza-affected WTO Members had access to FSIS procedures, 
and one such Member even exported over a million pounds of poultry to the US. Thus, Section 727 
arbitrarily and unjustifiably discriminated against Chinese poultry.  
I. 
CLOSING STATEMENT OF CHINA AT THE SECOND SUBSTANTIVE MEETING OF THE PANEL  
4.275  Mr Chairman, distinguished Members of the Pa nel, this has always been a dispute about 
arbitrary discrimination . For two years, poultry from China alone was subject to an import ban. The 
ban was unrelated to the actual safety of Chinese poultry or the quality of its poultry inspection system. It was created and maintained without any science-based justification. As confirmed by the 
text of Section 727, its JES
142, and the FSIS Action Plan143, China did not have access to FSIS 
equivalence procedures during this time. These rule -making procedures are applied for the purpose of 
denying or granting approval to export poultry to  the United States. Section 727 eliminated any 
possibility of such approval, and did so for China alone.  
                                                      
142 Exhibit CN-33, p. 82 (directing USDA only to "submit a plan of action" and to post it on the 
Internet "upon its completion", but not to take any other action). 
143 Exhibit US-43 (compare description of steps th at FSIS "will" take to prepare "report on Chinese 
Food Safety Revisions" with steps FSIS "would " take with respect to the "Plan of Action").  WT/DS392/R 
 Page 59 
 
 
 4.276  The arbitrary nature of this discrimination is unde rscored by the undisputed fact that, even if 
every scientist in the world had independently verified that Chinese poultry was 100% risk-free, 
China would still not have been able to export to the United States while Section 727 was in effect.  
4.277  Despite the United States' suggestion to the contrary144, if an Executive Branch official had 
issued an arbitrary directive with  the same impact as Section 727, and based on the same limited and 
non-science-based information relied upon by Congress,  the measure would certainly be subject to 
challenge on the same grounds as Section 727. It  makes no difference who precisely in the US. 
Government adopts a particular measure. What matt ers is whether that m easure complies with WTO 
disciplines. 
4.278  The United States stated yesterday that Section 727 should not be deemed a "ban" on Chinese 
poultry. But a "ban" is a "formal and authoritative prohibition; a prohibitory command or edict".145 
There is no dispute that Sections 733 and 727 are "formal and authoritative" measures that 
"prohibited" the import of Chinese poultry – regard less of anything that FSIS or China did during 
their pendency.  
4.279  The United States also emphasised yesterday the "temporary nature" of Section 727, and that 
it was in effect until the "set period" expired.146  Of course, whether a ban exists for two years or ten 
years does not change the fact that it is a ban. Mo reover, the United States fails to acknowledge that 
there was no reason for China or FSIS to believe that the ban was, in fact, temporary. That is because 
when the first so-called "temporary" ban – Sec tion 733 – was supposed to "expire" in September 
2008, after its so-called "set period", it was ex tended for another 6 months by the Continuing 
Appropriations Resolution of 2009. Then, when that  Resolution was replaced by Section 727 in 
March 2009, it was supposed to "expire" in September 2009. Again, it was extended by a continuing 
appropriations resolution that maintained  Section 727 until the passage of yet another  China-specific 
measure, Section 743.147 This certainly was not a ban effec tive over a "set period" of time.  
4.280  China recalls that it is not bringing this case to force the United States to accept its poultry. 
China is also not claiming that its food safety insp ection system is perfect; no country's is. China is 
simply seeking the opportunity, which has remained  available to every WTO Member except China, 
to participate in the normal FSIS equivalence process. This is a process that can provide China  with 
the ability to import poultry into th e United States, rather than a pr ocess that can do nothing more than 
provide the  US Congress  with a report and "plan of action" but nothing for China. 
4.281  In view of the overwhelming and un-refuted evid ence of the arbitrary and unjustifiable nature 
of Section 727, China requests that the Panel fi nd that Section 727 is inconsistent with the 
United States' obligations under the GATT 1994, the Agreement on Agriculture , and the 
SPS Agreement . Although Section 727 has now expired, it is clear from its predecessors and 
successors that China's ability to access FSIS procedures – unlike any other Member  – is dependent 
on provisions in annual appropria tions measures of the US Congress. Consequently, China requests 
that the Panel issue a recommendation that the United States not revert to language similar to that in 
Section 727 in its future legislation. 
4.282  In closing, I would like to thank the Panel and the Secretariat for their efforts and attention, 
and we look forward to answering your further questions. 
                                                      
144 United States' opening oral statement at the seco nd substantive meeting of the Panel, para. 9. 
145 The New Shorter Oxford English Dictionary  (4th ed. 1993), p. 175. 
146 United States' opening oral statement at the seco nd substantive meeting of the Panel, para. 15. 
147 See China's first written submission, para. 26. WT/DS392/R 
Page 60  
 
 J. E
XECUTIVE SUMMARY OF THE ORAL STATEMENT BY THE UNITED  STATES AT THE SECOND 
SUBSTANTIVE MEETING OF THE PANEL  
4.283  China's second submission makes six arguments in an effort to undermine Section 727's 
necessity and to demonstrate that the measure is app lied in a manner that would constitute arbitrary or 
unjustifiable discrimination against China. China' s arguments often miss the point and frequently 
mis-characterize the US position. China also overlooks the fact that Section 727 was an act of 
congressional oversight taken in the context of an ongoing equivalence proceeding.  
4.284  China's first substantive Article XX(b) argumen t is that Section 727 denied China access to 
the PPIA. However, this is not the question presen ted. There is nothing in the GATT provisions China 
cites requiring a Member to utilize a particular set  of procedures when evaluating whether another 
Member's system ensures the safety of its exported food. In fact, there is nothing that speaks to 
providing an exporting Member with "access" to any procedures.  
4.285  Rather, the question presented is whether food exported from a Member poses risks to life or 
health such that it is necessary for the importing Memb er to take steps to ensure that the exported food 
will be safe. That is what the United States did here. The United States was faced with a situation 
where China had massive food safety problems and had overhauled its food safety system while a 
process was underway to ascertain and ensure the safety  of exports of Chinese poultry. It was in this 
context that Congress took the steps it deemed nece ssary to ensure the safety of the US food supply 
with respect to Chinese poultry exports. 
4.286  There are many legitimate steps a Member coul d take to ensure food safety within this 
context. A Member could decide that it could not complete an equivalence process until after it sought 
additional information, additiona l audits, further explanation, or additional scientific studies. 
Section 727, which provided that the United States could not complete its equivalence process for a 
short time while additional work was unde rway, was also a legitimate step. 
4.287  Thus, China's argument is simply incorrect  because it overlooks that Section 727 was a 
normal act of congressional oversight taken in th e context of an ongoing equivalence proceeding. 
Congressional oversight is commonplace in the US syst em of governance. In this instance, Congress 
enacted Section 727 to ensure that FSIS protected  life and health by fully considering China's 
systemic food safety enforcement problems and new food safety law before establishing or implementing equivalence rules for Chinese poultry.  Congress's action was not separate and apart 
from the US system to ensure the safety of imported food, but is a part of that system. Had an executive branch official taken action to ensure  that China's enforcement problems were fully 
considered, we doubt that we would ev en be before this Panel today.  
4.288  Putting this aside, the United St ates agrees with China that Section 727 did not allow FSIS to 
undertake every possible aspect of the equivalence procedure. In fact, for a short time period, FSIS could not complete two specific tasks. FSIS could not use funding to "establish" a rule related to 
Chinese slaughtered poultry and it could not use fu nding to "implement" a rule related to Chinese 
processed poultry. However, Section 727's impact went no further and did not prevent FSIS from 
conducting activities related to China's equivalence application, including specific PPIA activities. As 
a result, China was not denied access to the PPIA. 
4.289  China also suggests that whether FSIS could take  related activities is "ultimately irrelevant". 
However, FSIS's ability to conduct this work dur ing Section 727's applicability is far from 
meaningless. Indeed, FSIS's ability to engage in re lated work underscores Section 727's contribution 
to its objective and its limited trade restrictiveness.  In this context, China's submission incorrectly 
asserts that FSIS's equivalence-related actions durin g 2009 were "minimal". To the contrary, FSIS did 
considerable work related to China's equivalence application including the development of an action  WT/DS392/R 
 Page 61 
 
 
 plan, steps under the action plan, and steps to improve  its equivalence process. FSIS could have done 
more had China been responsive to its request for information about its food safety overhaul. 
4.290  China concedes it did not respond to the US request of 12 May 2009, but relies on 
notifications made much later to the SPS Committee . In addition, the regulations were not effective 
until 1 December 2009. It was reasonable for the Unite d States to want to know what changes China 
was making to its system, how they would operate in the real world, and how they would affect 
China's poultry inspection system. Yet China did not find it important to respond.  
4.291  China's second argument is that Section 727 was not necessary to protect life and health 
because imports of Chinese poultry were not immine nt when Section 727 was enacted. China quotes a 
US response to questions noting that "China was not in a position to immediately export poultry 
products to the United States at the time the funding restriction was enacted".  
4.292  China misses the point. By stating that China w ould not have been able immediately to export 
poultry in Section 727's absence, the United St ates was illustrating the measure's limited 
restrictiveness by contrasting it with other measures that would have impeded products upon 
enactment, such as an import ban. Further, the n eed for FSIS to conduct certain procedures before 
China could export poultry does not undermine Secti on 727's necessity. Implementing or establishing 
equivalence rules is one, significant step in the process by which China could ship poultry to the 
United States. It was important that this step only be  taken when there was reason to be confident that 
poultry exports would be safe. Additionally, the equiva lence review process that China refers to could 
have been completed within the period set by the meas ure, and even if it could not, this is irrelevant. 
After all, the need for protection begins with the first shipment of Chinese poultry and continued into 
the future to protect against every shipment of Chinese poultry that could enter the United States and 
harm consumers if FSIS were to "establish" or  "implement" equivalence rules without fully 
considering China's systemic food safety problems.  
4.293  China also attempts to use the fact that FSI S theoretically could ha ve considered China's 
systemic food safety problems in Section 727's absen ce as evidence against its necessity. However, it 
is typical for a Member to have different options to ensure food safety. The mere existence of these 
options does not mean that any given option is not "necessary". Chinese poultry exports posed a risk, 
and it was necessary to be sure that these exports were safe to protect life or health. The fact that there 
might be another way to do so does not take away from Section 727's necessity.  
4.294  China also ignores that FSIS had never before  made an equivalen ce determination for a 
Member with such widespread food safety crises and systemic problems like China. As a result, there 
were strong concerns that FSIS did not and would not fully account for these novel risks. 
Accordingly, Section 727 was necessary to focus FSI S's attention on these problems to ensure they 
were fully considered before equivalence rules we re established or implemented to ensure life and 
health was protected.  
4.295  China's third argument relates to the diffe rences between FSIS and FDA procedures for 
ensuring the safety of imported food. China argues that "the United States cannot justify having 
blocked application of only FSIS procedures by sugg esting that equivalency systems involve greater 
risk than other types of food import procedures".  
4.296  China ignores the significant measures taken to protect life and health from the risk posed by 
FDA-regulated Chinese products, including import alerts  and efforts to deal with China's serious, and 
unfortunately, still ongoing, melamine crisis. The fact  that these measures were necessary to protect 
life and health for FDA-regulated products does not undermine the fact that Section 727 was 
necessary to protect from the ri sk posed by Chinese poultry. WT/DS392/R 
Page 62  
 
 4.297  Section 727's necessity was in large part due to concerns about China's food safety 
enforcement track record. China's food safety en forcement problems raise particularly serious 
concerns under an equivalence regime because FSIS heavily relies on the exporting country to enforce 
its laws to ensure that the US level of sanita ry protection is being met. While FSIS does conduct 
audits and re-inspections, these measures are not sufficient to protect life and health. FSIS's 
re-inspections simply monitor compliance with ce rtification and labeling requirements. It is the 
equivalence determination itself that is FSIS' s primary tool to protect life and health.  
4.298  China's fourth substantive argument involves its  widespread problems with avian influenza 
(AI). China's argues that since it is not the only country that has suffered from the highly pathogenic strain of the virus, its AI problems do not support Section 727's necessity.  
4.299  China's argument overlooks key facts related to AI. China points out that more than 
80 countries have been affected by highly pathogenic avian influenza, but China fails to mention that 
it is one of only 15 of these countries that the OIE has classified as having current unresolved disease 
events, infection present, or demonstrated clinical  disease. China also argues that Section 727 was not 
justified by AI concerns because cooked pou ltry cannot transmit the disease. However, under 
APHIS's requirements to protect against AI, Chin a would have to certify that its poultry is fully 
cooked or otherwise processed sufficiently. APHI S would be relying on China to make this 
certification and enforce the related requirements.  In this context, China's problems with the 
enforcement of its laws raise concerns about wh ether China's poultry inspection system could be 
relied upon to protect against the potential spread of AI.  
4.300  China's fifth argument involves the various poultry-related crises that have been cited by the 
United States in this dispute. According to China,  these crises are not relevant to the risk posed by 
Chinese poultry. China also points out that other countries, such as the EU member States, have 
accepted poultry imports from China in recent years.  
4.301  Again, China's arguments avoid or overlook key facts. China argues that its chicken feed 
crises are not relevant to the safety of Chinese poultry because contaminated chicken feed does not 
increase the risk of consuming the related poultry meat . However, China fails to mention that China's 
Health Secretary responded to the chicken feed cr isis by announcing that all Chinese chicken meat 
would be tested for melamine to ensure that it wa s safe to eat. Similarly, China notes that the EU 
currently accepts Chinese poultry, but avoids the fact  that the EU banned Chinese poultry for six years 
from 2002 to 2008. Perhaps China does not raise th is issue because the EU's ban on Chinese poultry 
was largely based on concerns about AI in China, an issue China argues is not relevant to the safety of 
Chinese poultry.  
4.302  China's sixth argument is an attempt to demonstrate that Section 727 is applied such that it 
discriminates against China in an arbitrary or unju stifiable manner. In short, China argues that the 
same conditions prevail in China and in othe r countries not within Section 727's scope.  
4.303  China's discrimination arguments are not persuasi ve. By its very nature, any action taken in 
the context of an equivalence review of a count ry's food inspection system may make explicit 
reference to that country alone. This country-sp ecific nature of an equivalence review does not 
automatically raise questions of arbitrary or unju stifiable discrimination. China was the only country 
whose poultry product exports raised such a high leve l of concern for food safety and that was subject 
to an imminent equivalence determination at the ti me Section 727 was enacted. Therefore, it simply 
would not have made sense to apply this measure to other countries. Further, Section 727's treatment 
of China was not arbitrary or unjustifiable due to well-established concerns about China's food safety 
enforcement problems and its food safety crises.  WT/DS392/R 
 Page 63 
 
 
 4.304  In determining whether Section 727 was applied against China in an arbitrary or unjustifiable 
manner, China argues that it should be compared w ith all other Members. However, a comparison of 
this nature does not make sense. After all, most Members have never attempted to export poultry to 
the United States and there would never be a reason to  enact a measure like Section 727 with regard to 
their products. Instead, the proper comparison fo r Article XX purposes is between China and those 
Members whose poultry inspection systems had alread y been found equivalent or those Members who 
had progressed far enough along in the equivalence pro cess such that a determination was imminent. 
It is these Members who were similarly situated as China in that they had an expressed desire to 
export poultry to the United States, acted on that desi re, and were in a position to  be able to export in 
the near future. 
4.305  Among these Members, China's application sta nds out for its unique concerns. No other 
Member who has been found equivalent or who is n earing an equivalence determination has had such 
severe enforcement problems or massive food safety cri ses. Another distinction is that many of these 
Members had been exporting poultry or meat to th e United States for many years without incident 
before they were found equivalent under FSIS's curr ent equivalence regime. Thus, at the time these 
WTO Members were subject to FSIS's equivalence process for poultry, FSIS already had a familiarity 
with them and confidence in their inspection systems for ensuring the safety of the products that they 
exported to the United States. By contrast, China ha d never before exported poultry or meat to the 
United States when it applied for equivalence in 2004.  
4.306  Among these Members, China spends a lot of ti me comparing itself with Mexico. We agree 
that FSIS's audit reports on Mexico are troubling. In  fact, the 2008 audit that China cites led FSIS to 
suspend Mexico from being able to export poultr y products to the United States. However, FSIS's 
reports on China are also troubling. For example, for every single Chinese slaughtering facility that 
FSIS audited in 2005, it concluded: "If this estab lishment were certified to export to the US, this 
establishment would be immediately delisted." 
4.307  Despite the fact that FSIS's audits of both Chin a and Mexico raised concerns, this comparison 
does not prove discrimination. Unlike China, Mexico was not in the middle of an ongoing equivalence 
proceeding in which new rules had to be implem ented and established to allow Mexico to export 
poultry to the United States at the time Section 727  was enacted. Additionally, Mexico had a long 
history of exporting meat and poultry products to th e United States at the time of the audit, which 
gave FSIS confidence that Mexico would work to resolve the problems it identified during the audit 
as it had done in the past. More fundamentally, China's discrimination argument appears to rest on a 
faulty premise. China asserts that it was discrimin ated against because FSIS continued to work with 
Mexican officials to resolve its issues while by enacting Section 727, FSIS was refusing to work with 
China. However, to the contrary, FSIS did engage in  work related to China's equivalence application 
during 2009 and did reach out to China so it c ould do even more work on this matter.  
4.308  China also has no basis for an Article I clai m. China's argument misses the point of an 
equivalency-based regime. Many of a Member's act ions taken in implementation of an equivalency-
based food-safety regime will differ for different  Members, depending on the specific facts and 
circumstances of that Member's status in the proces s of applying for a determ ination of equivalency. 
China tries to get around this fundamental point  by claiming that the US measure is somehow 
different than a regulatory action, because it was a dopted by the US Congress as opposed to FSIS, the 
US regulator. China's argument, however, relies on  an artificial distinction between procedures 
administered only by FSIS, and the broader US system of ensuring food safety, which includes 
congressional oversight. This distin ction has no basis in the WTO Agreement. The fact that the 
particular exercise of oversight involved in this dispute applied to one Member does not establish an 
Article I violation, just as the fact that a specif ic FSIS regulatory action applied to only one Member 
would not establish an Article I violation.  WT/DS392/R 
Page 64  
 
 4.309  In addition, China has provided no explanation for why poultry products from China are "like 
products" to poultry products from other WTO Members, including those already authorized to export poultry products to the United States. China's "hypothetical like product" approach is circular. China is assuming that its exports of poultry products woul d be as safe as exports from other Members, yet 
that is the point of an equivalency process.  
4.310  China's claims under the SPS Agreement  are not within the terms of reference because China 
failed to request consultations under the SPS Agreement . China characterizes this issue as one of an 
"initial" failure by the United States to understand China's consultations request, and that the matter 
was subsequently clarified in further communications  from China. The issue here is not a matter of 
misunderstanding: China stated that it considered that the SPS Agreement  did not apply, and China 
would only request consultations under the SPS Agreement  in the future if there were a subsequent 
demonstration that any US measure was subject to the SPS Agreement . Thus, under the plain meaning 
of China's consultations request, and as China h as confirmed, China would only have requested 
consultations under the SPS Agreement  well after this panel process began. Accordingly, China had 
not invoked the SPS Agreement , nor consulted under it, such that the SPS Agreement  could be within 
the terms of reference of the Panel. 
4.311  Thus, the question is whether the DSU allows a Member to include claims under a covered 
agreement without seeking consultations under that agreement. Members agreed in the DSU to the 
rules that would apply in invoking the DSU. China has not followed those rules, but still asserts that it is entitled to the mechanisms under the DSU. If China's approach here were to be accepted, it would 
be in derogation of the agreed ru les, would undermine the usefuln ess of the consultation process, and 
lead to uncertainty and confusion in all future disputes. 
4.312  China's second submission also argues that the United States has not "advanced a claim that 
the consultations request affected the United Stat es' due process rights". Although the United States 
has not used that phrase, certainly "due process" must  include the right to have disputes conducted in 
accordance with the rules set out in the DSU, and those rules also serve to protect the rights of other 
Members.  
V. ARGUMENTS OF THE THIRD PARTIES 
A. E
UROPEAN UNION  
1. Executive summary of the third party wri tten submission by the European Union 
(a) Concerning the existence of the alleged measures 
(i) On the notion of "future closely-related measures" 
5.1 The European Union notes that the Appellate Body and the WTO panels generally limit their 
analysis and findings on the compatibility of a cont ested measure with the covered agreements to the 
provisions of that measure as they were on the date  of the establishment of the panel. Amendments 
introduced after the date of the est ablishment of the panel are genera lly taken into consideration in 
reaching such findings only in circumstan ces where specific conditions are met.  
5.2 Applying the principles that the Appellate Body clarified in the Chile – Price Band System  
case to the facts of the present case, the European Union first notes that  the terms of reference of the 
Panel, which reflect the measures challenged by Ch ina in its request for the establishment of the 
Panel, are broad enough to include amendments to Section 727. They also include an express 
reference to the draft provision of the United States  Bill that served as the basis for Section 743 and 
the Agriculture Appropriations Act 2010 . We also note that China's request defined such "future  WT/DS392/R 
 Page 65 
 
 
 closely-related measures" as measures that have "the same substance, essence and/or legal 
implications for imports of poultry products from China", as Section 727. However, the United States 
argues that, far from having the same substance, essence or legal implications with Section 727, 
Section 743 "plainly changes the essence of S ection 727" because it "removes the restriction" 
introduced by Section 727.  
5.3 If, after having analysed the facts of the case, the Panel comes to the conclusion that 
Section 743 does not have "the same substance, es sence and/or legal implications" as Section 727, 
then the Panel should also conclude that Section 743 does not  fall within its terms of reference. On the 
other hand, if the Panel concludes that Section 743 and Section 727 have the "same substance, essence 
and/or legal implications", then the Panel shoul d further assess whether Section 743 was adopted 
"with a view to shielding from scrutiny a measure", or whether an analysis of Section 743 "is 
necessary in order to secure a positive solution to th e dispute", as required by the Appellate Body's 
report in the Chile – Price Band System  case. If the Panel concludes that either of these conditions is 
satisfied, then the Panel should conclude that Sec tion 743 falls within its terms of reference and 
should make findings on its compatib ility with the covered agreements. 
(ii) On the notion of the "moratorium"  
5.4 The European Union notes that China bases its claim for the existence of the "measure" called 
"the moratorium" on two elements: first, the existe nce of Section 727 and its predecessor, Section 733 
of the Agriculture Appropriations Act 2008 ; and second, the alleged "ongoing inaction of FSIS with 
respect to rules related to the importation of Chin ese poultry products", both in relation to existing 
rules and in relation to expanding the scope of Ch inese poultry products that could be imported into 
the United States.  
5.5 On the first point, the European Union agrees with the United States that the existence of 
different pieces of legislation, adopted at different points in time, relating to the same product market 
and imposing similar rules and procedures (or even restrictions) is not necessarily sufficient evidence 
of the existence of another, separate and distinct "measure" qualified as a "moratorium" and 
consisting of the "sum" of the individual measure s. China should have produced additional specific 
and precise evidence establishing the existence of a Un ited States' measure to prohibit indefinitely the 
importation of Chinese poultry products. In the absen ce of such evidence, the Panel should conclude 
that there is no "measure" called "moratorium" and should limit its analysis only to the examination of 
Section 727 (and, eventually, Section 743) and thei r compatibility with the covered agreements.  
5.6 On the second point, the European Union notes that both China and the United States have 
included in their first written submissions extensive descriptions of the United States' legislation, 
which regulates the functioning of the FSIS. There is nothing in these descriptions indicating that, for as long as Section 727 was in place, the FSIS could have taken action to promote the importation of 
Chinese poultry products into the United States,  let alone expand the scope of Chinese poultry 
products that could be imported, contrary to the provi sions of Section 727. If this is confirmed by the 
Panel's assessment of the United States' legislation, then the alleged "inaction of the FSIS" during the 
period when Section 727 was in place, would be  simply the direct result and consequence of 
Section 727. In such circumstances, the alleged "i naction" of the FSIS woul d not constitute additional 
evidence establishing the existence of another, separate and distinct "measure" called "the 
moratorium". 
(iii) On the expiry of Section 727 and the letter of 12 November 2009 
5.7 According to the United States Section 727 e xpired on 30 September 2009, i.e. after the 
establishment of the Panel. Nevertheless, China seek s not only findings but also a recommendation. In 
light of this, even if the Panel would make findings with respect to Section 727, the Panel may need to WT/DS392/R 
Page 66  
 
 consider the jurisprudence suggesting that, in such circumstances, it may not be necessary to make a 
recommendation. Also according to the United St ates, with respect to Section 743, on 
12 November 2009 a letter from the Secretary of  Agriculture to Congress set forth certain 
commitments, with the consequence that there ar e no longer any funding restrictions. Nevertheless, 
China seeks not only findings but also a recommendati on. In light of this, the Panel may also need to 
consider whether or not it is necessary to make  a recommendation with respect to Section 743. 
(b) Claims relating to the application of the GATT 
(i) On the application of GATT XI 
5.8 The European Union notes that the parties do not  dispute the fact that the United States' 
legislation contains a general prohibition on the impor tation of poultry products into the United States. 
The United States' legislation introduces an exception to this general rule, by allowing the importation 
of poultry products produced in countries that can "show that their food safety regulatory system results in the same level of public health protecti on achieved by the United States' regulatory system". 
For as long as such a determination of equivalence has not been made by the competent United States 
authorities, for any reason, a WTO Member cannot e xport any poultry products to the United States. 
One reason for the absence of such determination may be that the competent authorities of the 
United States have concluded that a particular WTO Member failed to show that its food safety 
regulatory system results in the same level of pub lic health protection as the level achieved in the 
United States. Another reason may be that th e WTO Member has not asked the competent 
United States authorities to engage in the proce dures necessary for the evaluation of its food safety 
system. A third reason may be that the competent United States authorities have been requested to 
perform the evaluation, but have not completed the necessary procedures yet, or have not yet started 
them.  
5.9 In any and all of these cases the general prohi bition on the importation of poultry products 
would apply and the WTO Member would not be allowed to export any poultry products to the 
United States. The particular reason for which this WTO Member would not be able to make use of 
the exception allowed under the PPIA would not matter:  the inability to export poultry products into 
the United States would be the consequence of th e general prohibition. In these circumstances, it 
would appear that the "measure" imposing the "restri ction" on the importation of poultry products into 
the United States is the underlying legislation cont aining the general prohibition on the importation of 
poultry products. An exception to this general prohibi tion exists and this exception may be granted to 
a WTO Member, or not. The refusal to extend the advantage of this exception to a particular WTO 
Member (while it is extended to other WTO Member s) may constitute a violation of GATT Article I, 
if the conditions for the application of that Ar ticle are met. However, the mere absence of 
authorization would not constitute an additional or different "restriction", which would exist alongside 
the real restriction imposed by the general prohib ition and which could give rise to a separate claim 
under GATT Article XI.  
5.10 This does not preclude that, depending on the f acts of the case, an additional and distinct 
measure permanently or temporarily closing down  the exception might constitute an additional 
restriction. In this respect, for the purposes of  interpreting and applying Article XX(b) of the 
GATT 1994, whether there is an inconsistency with Ar ticle I or Article XI of the GATT might not be 
the critical point, if it is clear that at least one of those provisions is breached.  
5.11 The European Union notes that, in the present case, China expressly states that it does not 
challenge (i) the general prohibition on the impor tation of poultry products and (ii) the exception 
introduced by the "procedures for evaluating equivale nce and approving imports of poultry products". 
China only challenges the United States' alleged re fusal to allow China to participate in the 
procedures for the evaluation of China's food safet y system, while the United States allows other  WT/DS392/R 
 Page 67 
 
 
 WTO Members to participate in these procedures. In light of the above, the European Union considers 
that, if on the basis of its assessment of the facts of this case, the Panel concludes that the contested 
measure constitutes an additional restriction to th e main restriction imposed by the underlying 
legislation of the United States, then the Panel shoul d also examine whether such additional restriction 
also constitutes a "restriction" within the meaning of Article XI of the GATT. 
(ii) On the relation between GATT XX(b) and the SPS Agreement 
5.12 The European Union notes that the United States has confirmed that the contested measures 
were "enacted in order to protect human and an imal life and health from the risk posed by the 
importation of poultry products from China". This would seem to indicate that the United States 
accepts that the contested measures satisfy the de finition of "sanitary measures" included in the 
SPS Agreement .  
5.13 The European Union also notes that the Preamble of the SPS Agreement  starts by repeating 
the text of Article XX(b) and of the chapeau of  Article XX of the GATT and concludes with the 
statement that the purpose of the SPS Agreement  is to "elaborate rules for the application of …, in 
particular, GATT XX(b)".  
5.14 The European Union also notes that Article 2.4 of the SPS Agreement  provides that "sanitary 
or phytosanitary measures which conform to the re levant provisions of this Agreement shall be 
presumed to be in accordance with the obligat ions of the Members under the provisions of 
GATT 1994 which relate to the use of sanitary or phy tosanitary measures, in particular the provisions 
of Article XX(b)."  Similarly, Article 3.2 of the SPS Agreement  provides that SPS measures that 
conform to international standards are deemed ne cessary and presumed consistent with the relevant 
provisions of the SPS Agreement  and the GATT 1994. The European  Union takes the view that 
because of this close relationship between GATT Article XX(b) and the SPS Agreement , the 
provisions of the SPS Agreement  provide immediate context for the in terpretation of the provisions of 
GATT Article XX(b).  
5.15 The European Union draws support for this view from the fact that, as clearly stated in the 
Preamble of the SPS Agreement , the SPS Agreement  "elaborates rules for the application" of "in 
particular" Article XX(b) and the chapeau of Article XX of the GATT, as well as from the fact that measures which satisfy the provisions of the SPS Agreement  are expressly stated to satisfy also the 
provisions of GATT Article XX(b). Consequently, wh ere a contested measure satisfies the definition 
of "sanitary measure" included in the SPS Agreement , the Panel's assessment of its compatibility with 
GATT Article XX(b) needs to take into cons ideration the relevant provisions of the SPS Agreement . 
The European Union considers that this is particul arly true for the Panel's assessment of whether the 
contested measure is "necessary" in order to achie ve the stated objective of protection of human, 
animal or plant life or health.  
5.16 In light of the above, the European Union considers that, if after having examined the facts of 
this case, the Panel concludes that  the contested measures constitute "sanitary measures" in the terms 
of the SPS Agreement , then the Panel should assess their compatibility with the provisions of GATT 
Article XX(b) also taking into consider ation the relevant provisions of the SPS Agreement .  
5.17 In this respect, the European Union consider s that the present case is not procedurally or 
substantively comparable to the Brazil – Retreaded Tyres  case. In that case the European Union made 
no claims under the SPS Agreement  and Brazil invoked in its defence Article XX(b) of the GATT but 
not the SPS Agreement . Moreover, in that case, the European Union never argued that the provisions 
of the SPS Agreement  should be included in the assessment as immediate context for the interpretation 
of Article XX(b) of the GATT. The present case is pr ocedurally different. China is seeking review of 
the measures at issue against various obligations in the SPS Agreement  (and the Panel will have to WT/DS392/R 
Page 68  
 
 decide whether those clai ms are within its terms of referenc e) and in any event will no doubt be 
referencing those very same provisions as i mmediate context for the interpretation of GATT 
Article XX(b).  
5.18 The present case is also substantively different . In the present case the focus of the discussion 
is on whether the poultry products subjected to th e "pause" in the approvals regime constituted a 
direct  threat to human or animal health, justifying  the measure at issue – a classic SPS problem. By 
contrast, in the Brazil – Retreaded Tyres  case the public health issue was not related to the product 
itself, but was more attenuated, and related rather  to the manner in which the product was disposed 
off. As a result, it is not clear whether the Brazilia n measure against the importation of retreated tyres 
was covered by the definition of "sanitary measure" in Annex A, paragraph 1 of the SPS Agreement . 
(c) Claims relating to the application of the SPS Agreement  
5.19 The European Union considers that the legal fra mework that most readily lends itself to an 
objective assessment of this case, wh ich appears to involve an admitte d "temporary restriction" on the 
import of certain poultry products for reasons  of human or animal health, is the SPS Agreement . The 
European Union observers that notwithstanding c onsultations and the exchange of first written 
submissions, there has as yet been no detailed development of substantive arguments under the 
SPS Agreement . Consequently, as a Third Party having notified its substantial interest to the DSB, the 
European Union considers that, to-date, its inter ests have not been fully taken into account, pursuant 
to Article 10 of the DSU. It is for that reason th at the European Union requests enhanced third party 
rights, as set out in the following section. For the time being, and pending a response to that request, 
the European Union has the following observati ons. Leaving aside the question of which GATT 
provisions other than Article XX(b), if any, the SPS Agreement  implements, as e xplained above, the 
European Union considers that, at least in this case, the SPS Agreement  must be constantly read 
together with the relevant provisions of Article XX  of the GATT, and eventually other relevant GATT 
provisions (in this case, Articles I and XI of the GATT 1994). That is because the rights and obligations of the parties are dispersed amongst these various provisions, so that it is only by 
objectively assessing all of them that the Panel can pr operly carry out its task of considering whether 
or not the balance between the various interests at pl ay struck in the measures at issue is consistent 
with the cited provisions of the covered agreements . These observations have particular implications 
for burden of proof issues. The principles are not controversial: a party asserting a fact should prove it; a complaining party should make its case; and a defending party invoking an  "affirmative defence" 
should do likewise. These principles need to be r easonably applied with flexible intelligence in the 
context of any covered agreement, but particularly one such as the SPS Agreement , which touches on 
issues of scientific proof or evidence, including circumstances where there is a paucity bordering on an absence of science.  
5.20 With respect to the characte risation of Section 727 (and Section 743), the European Union 
notes that the United States describes it as a "pause". To the European Union,  that description seems 
apt. One might conceptualise such  a "pause" as a "delay", within  the meaning of Article 8 and 
Annex C.1(a) of the SPS Agreement
, in which case the essential legal question before the Panel would 
resolve itself into whether such delay was "due", i.e.  justified. Alternatively, one might conceptualise 
such pause as a temporary or provisional measure, such as is referenced in Article 5.7 of the 
SPS Agreement . The United States has not invoked Article 5.7; but China has made a claim under 
Article 2.2, which cross-references the exception in  Article 5.7. In either case, the same basic 
principles would apply, since the disciplines of Article 5.7 would certainly constitute immediate 
context relevant to determining whether a "delay" was "due".  
5.21 One of the particular features of the measures at issue in this case that the Panel may no doubt 
wish to consider is that, unlike in most if not a ll of the past SPS cases, the measures would not appear 
to be in the nature of a general or specific measur e prohibiting or restricting the import of a particular  WT/DS392/R 
 Page 69 
 
 
 product and having regard to relevant science. Rather, the measures at issue would appear to be in the 
nature of a measure, such as any Member might adopt , were it to determine that a particular facility 
(such as a slaughterhouse) previously authorized in fact no longer complied with the applicable rules. 
For example, it is not controversial that Salmonella  constitutes a public health risk (no need for an 
extended debate on the science), and that an impor t ban would be a proportionate response to any 
Member demonstrating itself incapable of sufficiently eliminating that threat (no need for an extended 
debate on alternative measures). Rather, the more li mited question in this case would appear to be 
whether or not the particular circumstances justifie d the "pause". With this in mind, the Panel may 
consider Article 8 and Annex C.1(a) of the SPS Agreement  particularly relevant. 
5.22 Turning to the reasons for which the measu re at issue was apparently adopted, the 
United States appears to refer to three public he alth issues: "poultry that is not produced under 
sanitary conditions or thoroughly inspected for contamin ants"; avian influenza; and a "particular risk" 
associated with China. With this in mind, and to begin the analysis in conventional fashion under the 
SPS Agreement , and looking at the provisions of Articles 5. 1 and 5.7, the European Union would have 
been interested to know whether or not the Un ited States had conducted any risk assessment under 
those provisions, or based itself on any available pertinent information, or sought additional 
information within a reasonable period of time. China asserts that no such documents exist. The 
United States first written submission does refer to certain documents. For example, the United States 
refers to USDA facts sheets about Salmonella , Campylobacter  and Listeria ; a weekly report from the 
Center for Disease Control about avian influenza; and APHIS restrictions on imports of poultry from regions such as China where avian influenza exists . The United States also refers to a number of 
documents about food safety in China generally. However, the European Union would have been 
interested to better understand, within the terms of the SPS Agreement , how such general documents 
might relate to and justify the measures at issue.  
5.23 The European Union has also reviewed the Final Report of an Initial Equivalence Audit 
Covering China's Poultry Inspection System and th e Final Report of an Initial Equivalence Audit 
Covering China's Poultry 'Slaughter' Inspection Syst em. The European Union observes that the Panel 
may have to consider whether or not these documents  could justify, perhaps with other documents, the 
"delay" occasioned by the measures at issue. The la tter document, in particular, appears to suggest 
deficiencies with respect to poultry slaughter. With  respect to the former document, the European 
Union would agree with a proposition that it understands  to be implied in the United States' defence, 
namely that the existence of an internal muni cipal law document providing for approval does not 
determine or pre-judge a position s ubsequently adopted by a risk mana ger. In other words, the Panel's 
task is to objectively determine whether or not th e "pause" occasioned by the measures at issue was 
consistent with the cited provisions of the covered agreements. In carry ing out that task, the fact that 
one agency within the municipal system had pr ovisionally indicated a favourable attitude towards 
approval carries very little if any weight in the Panel's assessment. 
5.24 In similar vein, the European Union would have been interested to understand how the 
United States would characterise its acceptable level of risk or appropriate level of protection with 
respect to this matter, but again, there is an absen ce of explanation. In similar vein, the European 
Union would have been interested to understand wh ether or not the United States has ever applied 
such a measure to other WTO Members' poultry products  (Article 2.3) or othe r products (Article 5.5), 
but again, there is an absence of explanation. In  similar vein, the European Union would have been 
interested to understand what other measure, if any,  might have been available, or why such other 
possible measure would not have been considered suitable, but again, there is an absence of 
explanation. In the absence of such explanation, the European Union can only observe that, at this 
stage, a defence of the measures under Article 5.1 of the SPS Agreement would appear to be 
attenuated.  WT/DS392/R 
Page 70  
 
 5.25 The European Union could not, however, rule out  the possibility of a defence of the measures 
under Article 8 and Annex C.1(a) or Article 5.7, if the European Union could better understand, for 
example, the relationship between the alleged unsan itary or inadequate conditions and the mooted 
public health threat, and any specific associated evidence or information. 
(d) Request for enhanced third party rights 
5.26 The European Union notes that the parties have not yet engaged in a detailed discussion of the 
core issue raised in this case, namely the compatibility of the contested measures with the provisions 
of the SPS Agreement . It is reasonable to expect that a profound discussion of this issue will take 
place through the parties' second written submissi ons and during the ensuing second substantive 
meeting with the Panel. Regrettably, as the Panel' s working procedures currently stand, Third Parties 
will not have the opportunity to participate to that  discussion and offer to the Panel their views on the 
positions taken by the Parties. The European Union cons iders that, in order to ensure that the interests 
of third parties under the GATT and the SPS Agreement  at issue in this dispute are fully taken into 
account during the panel process, the working proce dures should be amended to  provide for enhanced 
third party rights. In particular, third parties should be given access to the parties' second written 
submissions and allowed the opportunity to make their views known to the Panel and the parties 
through another third party written submission, or through their participation in the second substantive 
meeting with the Panel, or both. The European Un ion hereby respectfully requests the Panel to amend 
its working procedures accordingly. 
B. K
OREA  
1. Executive summary of the third-party submission of Korea 
5.27 It is undisputed that China's consultation re quest did contain language invoking the dispute 
settlement provisions of the SPS Agreement  in a conditional manner ("if it were demonstrated that any 
such measure is an SPS measure"). And the United States contends that this conditional invocation 
was legally ineffective because it does not comply w ith jurisdictional requirements that are allegedly 
established by Article 1.1 of the DSU. 
5.28 In light of analysis of the relevant text based on the Vienna Convention on the Law of 
Treaties,  Korea believes that there may be sound reas ons for a panel to insist upon procedural 
requirements of the type suggested by the United States where compliance with such requirements is 
necessary to uphold the responding party's due process ri ghts to have adequate notice of the nature of 
the claims against it. In this case, however, the Un ited States has not claimed that the alleged defects 
in China's consultation request caused it any prejudi ce. Consequently, Korea does not believe that the 
claims raised by China under the SPS Agreement  are outside the terms of reference of this Panel.  
5.29 In addition, Korea is of the view that the United States has invoked the exception of 
Article XX(b) of the GATT 1994 as a defense to cl aims presented by China, thereby accepting that 
the measure at issue is an SPS measure in accordance with Annex A(1) of the SPS Agreement .  
5.30 Having said that, Korea reiterates the importance of taking a precautionary perspective in the 
SPS regulation, especially when human life and health  are at stake. The United States has yet to, and 
may decide not to submit a defense based on the SPS Agreement , such as Article 5.7. Nonetheless, 
Korea deems that the precautionary principle embodied in the provisions of the SPS Agreement  must 
also be fully taken into account in inte rpreting Article XX(b) of the GATT 1994.  
5.31 For the foregoing reasons, Korea respectfully requests the Panel to actively review the SPS 
issues in this dispute and keep mindful of legitim ate concerns of the public or people of a Member  WT/DS392/R 
 Page 71 
 
 
 state regarding risks on human life and health fro m a precautionary perspective in interpreting the 
SPS Agreement  or Article XX(b) of the GATT 1994.  
5.32 Lastly, Korea is of the opinion that there can be systemic benefits, such as improving 
transparency of dispute settlement proceedings, fro m enhancing third party rights. However, Korea 
also believes that expanding third party rights without obtaining the consent of the parties of a dispute 
is contrary to the mandate of the DSU. Notwith standing the foregoing, should the Panel decide to 
grant third parties access to the second set of su bmissions, opportunity to participate in the second 
substantive meeting or to present its views to th e Panel on the second submissions, Korea reserves its 
right to participate in those proceedings w ith other third parties as the Panel sees fit.  
C. CHINESE TAIPEI  
1. Oral statement by Chinese Taipei 
5.33 Mr Chairman, distinguished members of the Panel, the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu ("Chinese Taipei "), as a third party in this proceeding, would 
like to thank the Panel for this opportunity to presen t its views on this dispute. Chinese Taipei joined 
this dispute as a third party because of its systemic interest in the correct interpretation of the covered 
agreements at issue, in particular, the Agreement on the Application of Sanitary and Phytosanitary 
Measures  (SPS Agreement ) and the Agreement on Agriculture . 
5.34 Chinese Taipei notes that the Eu ropean Union ("EU") requested for enhanced third party 
rights in their written submission148, and Chinese Taipei would like to echo the EU's request for the 
following reasons.  
5.35 While Article 12.1 and Annex 3 of the DSU do not  specifically address this issue of granting 
enhanced third party rights, the Appellate Body has found that such decisions are well within the 
scope of the panel's authority and discreti on. As the Appellate Body indicated in EC – Hormones , the 
decision to grant enhanced third rights is a "decisi on that falls within the scope of discretion and 
authority of the panels, particularly if the panel considers it necessary for ensuring to all parties due 
process of law."149  The Appellate Body then found that Panel's grant of enhanced third party rights 
justified under the particular circumstances.150 
5.36 In the present dispute, as the EU has rightly observed, "the parties have not yet engaged in a 
detailed discussion of the core issues raised in th is case, namely the compatibility of the contested 
measures with the provisions of the SPS Agreement. "151  We share the EU's observations and also 
expect that the in-depth discussi on of these issues will very likely ta ke place in the parties' second 
written submissions and during the Panel's sec ond substantive meeting with the parties.152  
5.37 Without participating in the entire proceeding of  the Panel's second substantive meeting with 
the parties, third parties can hardly assess whether the provisions of the SPS Agreement  are interpreted 
correctly, let along providing their views accordingly fo r the Panel's consideration. To ensure that the 
interests of third parties under the covered agreem ents in this dispute are fully taken into account 
during the panel process, we respectfully request th e Panel to amend its working procedures and grant 
third parties the following enhanced rights: 
                                                      
148 European Union's third party written submission, paras. 57-58. 
149 Appellate Body Report, EC – Hormones , para. 154. 
150 Appellate Body Report, EC – Hormones , para. 154. 
151 Supra  footnote 144, para. 57. 
152 Id. WT/DS392/R 
Page 72  
 
 (a) to receive the parties' second submissions and other documents associated with the 
Panel's second substantive m eeting with the parties;  
(b) to observe the Panel's second substan tive meeting with the parties; and  
(c) to make a brief statement during the Pane l's second substantive meeting with the 
parties. 
5.38 Chinese Taipei believes that granting enhanced third party rights in this dispute not only 
would allow the third parties to assist the Panel in  reaching correct interpretations of the relevant 
provisions of the covered agreements but would also  ensure the systemic interests of Members. We 
also believe that the additional rights granted by  the Panel would not become an "inappropriate 
blurring of the distinction drawn in th e DSU between parties and third parties".
153  Thank you. 
D. TURKEY  
1. Oral statement by Turkey 
5.39 Mr Chairman, respective Members of the Panel, fi rst of all, I would like to express Turkey's 
appreciation for giving the opportunity to third parties in the current proceedings to present their views and contribute to the se ttlement of this dispute.  
5.40 I would also especially like to indicate that, Turkey is not in the intention to present an 
opinion on the specific factual context of this dis pute and takes no position what so ever as to the 
defense and allegations presented by the parties on  whether the specific legislation at issue is 
inconsistent to the subject provisions of the WTO Agreements. Turkey wishes to contribute, by expressing its opinion on some systemic issues regard ing the interpretation of the provisions of the 
Agreement on the Application of San itary and Phytosanitary Measures ( SPS Agreement ).  
5.41 The first issue Turkey wishes to address is that, Turkey believes the restriction on the 
importation of certain poultry products is actually  an SPS measure because as defined in Annex A 
Article 1 of the SPS Agreement , it aims to protect animal or plant life or health within its territory 
from the risks arising from the entry, establishment or spread of pests, diseases, disease-carrying 
organisms or disease-causing organisms or from risks arising from additives, contaminants, toxins or 
disease-causing organisms in foods, beverages or feedstuffs.  
5.42 When taken into account, the definition in GA TT Article XX(b), we believe that for a 
member to be able to take a measure under pa ragraph (b) of Article XX, it has to meet the 
requirements under the SPS Agreement  if the risk is caused by additives, contaminants, toxins or 
disease causing organisms in food, beverages and feedstuff. 
5.43 The second issue Turkey wishes to address is the definition of the expression "scientific 
evidence" in Article 2.2 of the SPS Agreement . To the extent that by the panel, the contested measures 
are to be considered sanitary and phytosan itary measures within the meaning of the SPS Agreement  
and in the scope of the terms of reference of the current dispute, clarification of the meaning and 
scope of this expression will contribute to the resolu tion of the dispute and to the proper application of 
SPS measures. 
5.44 As foreseen in Article 2.2 of the SPS Agreement , the SPS measure should bring no more 
restriction than needed to realize the aim of protection. 
                                                     
 
153 Panel Report, EC – Tariff Preferences , Annex A, para. 7(d).  WT/DS392/R 
 Page 73 
 
 
 5.45 In regard to Articles 3.1 and 3.3 of the SPS Agreement , we are of the view that these articles 
should be addressed together. When done so, it is clear that an SPS measure can only be introduced 
provided that it is based on intern ational standards, guidelines and re commendations where they exist, 
and if not, the country introducing the measure shoul d have scientific evidence as to the consequences 
of what the potential damage might be, considering the measure is not introdu ced. This is to ensure 
that measures are not taken arbitrarily and are not u sed as a tool for manipulating international trade.  
5.46 Another Article under which China is challengi ng the United States is Article 5 of the 
SPS Agreement  which envisages that the appropriate level of sanitary or phytosanitary protection is to 
be taken according to a risk assessment take n by the country introducing the measure.  
5.47 Members are obliged to take available scien tific information into account. The level of 
protection taken under any SPS measure must not exceed the level that satisfies the need for 
protection. This again is to ensure fair and e qual treatment among member states and a foreseeable 
environment for international trade.  
5.48 In Article 5.7 of the SPS Agreement  it is envisaged that, where scientific evidence is 
insufficient, a member may provisionally adopt S PS measures on the basis of available pertinent 
information but it is also determined that the member  must at the same time continue to seek to obtain 
the additional information necessary fo r a more objective risk assessment.  
5.49 Finally, Article 8 and Annex C of the SPS Agreement  determines that the control, inspection 
and approval procedures of members must be consis tent with the provisions of the aforementioned 
Agreement, therefore has to be carried out w ithout undue delays and must be applied in a non-
discriminatory manner.  
5.50 As I conclude Turkey's oral statement, I would like to state that Turkey  will be pleased to take 
any questions that the Panel may have. 
VI. INTERIM REVIEW 
A. GENERAL  
6.1 On 14 June 2010, the Panel issued its Interim Report to the parties. On 28 June 2010, both 
parties submitted written requests for the review of precise aspects of the Interim Report. The parties 
submitted written comments on the other party's commen ts on 8 July 2010. Neither party requested an 
interim review meeting. 
6.2 In accordance with Article 15.3 of the DSU, this section of the Panel Report sets out the 
Panel's response to the arguments made at the inte rim review stage, wherever the Panel felt that 
explanations were necessary. The Panel has also mo dified certain aspects of its Report in light of the 
parties' comments wherever it considered appropria te. Finally, the Panel has made a limited number 
of editorial corrections to the Report for the pur poses of clarity and accuracy. References to sections, 
paragraph numbers and footnotes in this Section VI relate to the Interim Re port.  Where appropriate, 
references to paragraphs and footnot es to the Final Report are included. 
B. CHINA 'S COMMENTS ON THE INTERIM REPORT  
1. Factual aspects 
6.3 Regarding paragraph 2.26 of the Interim Report, China  suggests to the Panel that the first 
sentence be amended to read: "Nearly two years after the United  States ' first request, o On 12 March 
2008 ...".  China argues that the sente nce is duplicative and that the date  is sufficient to indicate the WT/DS392/R 
Page 74  
 
 amount of time that had passed. This, it claims, also  harmonises the style of paragraph 2.26 with its 
surrounding paragraphs, particular ly 2.23, 2.27 and 2.28.   
6.4 The United States disagrees and points out that the releva nt language is accurate and that 
China is not arguing otherwise. For the United States, the language is not duplicative because 
mowhere else does the Interim Report note the period of time between the FSIS's request for a list of 
certified establishments and China's response to that request.   
6.5 Having considered the comments of both parties, the Panel declines China's request to delete 
the said language.  The Panel considers that it is not duplicative, it is accurate and assists the reader in 
understanding the time span between the request for a list of certified establishments by the FSIS and 
China's response to such a request. 
2. Whether Section 727 is an SPS measure 
6.6 China  has made two requests for review concerning the Panel's charaterisation of China's 
position towards Section 727 being an SPS measure. The paragraphs concerned are 7.71 and 7.72.   
6.7 Regarding paragraph 7.71 of the Interim Report,  China suggests to the Panel that the first 
sentence be amended to read:  "China's characteri zation of Section 727 as an SPS measure has, during 
the proceedings, evolved from one extreme to the other 
significantly ."  Regarding paragraph 7.72, 
China suggests the sentence be amended to read: "During the first substantive meeting, China 
radically changed its position and argued for the first time that Section 727 is an SPS measure."   
6.8 China makes this suggestion because it believ es that the amended language would more 
accurately reflect the evolution of China's characte risation of Section 727. China submits that, from 
the beginning of this dispute, China left open th e possibility that Section 727 could potentially be 
considered an SPS measure, which China does not  believe should be considered an "extreme" 
position.   
6.9 The United States disagrees and points out that the language  chosen by the Panel is the more 
accurate characterisation of the developments in th is dispute. For the United States, it is hard to 
imagine a more stark contrast between a measure adopted for "budgetary purposes", as China initially 
described Section 727, and a measure adopted to  protect against food safety risks, as China 
subsequently described Section 727. In contrast, China's suggested phrasing ("evolved significantly") 
would inaccurately suggest that China had gradually shifted its position over time.  The United States 
further argues that China's suggested modification to  the first sentence of paragraph 7.72 is a less 
accurate description of the developments in this dis pute.  In its view, the language used in the Interim 
Report appropriately notes that China changed its pos ition – which is a fact that China does not even 
dispute.  Yet, it argues, China's suggested modi fications would delete from the first sentence of 
paragraph 7.72 the information that  China had changed its position.   
6.10 Having considered the comments of both parties,  the Panel declines China's request to amend 
the language in paragraphs 7.71 a nd 7.72. The Panel reminds China that it began its argumentation on 
the basis of Section 727 not being an SPS measure and referred to its SPS claims as being in the 
alternative in the event that "it were demonstrated " that Section 727 was an SPS measure. China then 
changed its position at the first substantive meeti ng and argued that Section 727 was an SPS measure. 
For the Panel, "being an SPS measure" lies at the op osite extreme of "not being an SPS measure". In 
our view, such a change in position can only be qua lified as moving from one extreme to the other.    WT/DS392/R 
 Page 75 
 
 
 3. Miscellaneous 
6.11 In addition to the substantive comments presented above, China offered a number of 
typographical, editorial and stylistic suggestions . The Panel has accommodated China's suggestions 
where appropriate. 
6.12 In particular, concerning footnote 294, China suggests adding (Exhibit CN-33) to the end of 
the footnote. The United States  has not objected.  The Panel h as made the suggested change in 
footnote 298 of the Final Report. 
C. UNITED  STATES ' COMMENTS ON THE INTERIM REPORT  
1. General comments on judicial economy 
6.13 The United States requests the Panel to exercise judici al economy in respect of China's 
claims under Articles 2.3, 5.5, 8 and Annex C of the SPS Agreement , and Article I of the GATT 1994. 
The United States submits that the Panel should ex ercise judicial economy with respect to these 
claims based on several factors.  The United States points out that this is the first WTO dispute involving a food-safety regime based on the principle of equivalence and therefore there are a number of issues of systemic importance regarding the le gal relationship between Article 4 and other SPS 
provisions.  According to the United States, th e result of the Interim Report's analysis under 
Article 5.5 and Article 8 of the SPS Agreement  is to make far-reaching findings on the legal 
relationship between Article 4 and other SPS provisi ons.  The United States further argues that the 
Interim Report's reliance on Japan -- Apples to support the application of  other SPS provisions to 
Article 4 equivalence measures is misplaced because Article 4 is "clearly different" from Articles 2.2, 
5.1 and other provisions of the SPS Agreement .  
6.14 The United States is concerned about the systemic  implication of the Interim Report's analysis 
under Article 5.5 of the SPS Agreement  (and the consequential Article 2.3 findings), especially with 
respect to the operation of an equivalence-based re gime.  The United States argues that the approach 
in the Interim Report would appear to turn many ordinary actions taken in the course of an equivalence review into breaches of Article 5.5 of the SPS Agreement while Article 5.5 analysis is not 
essential to the resolution of this dispute.    
6.15 The United States is also concerned about the sy stemic implication of the finding that an 
equivalence regime falls within the scope of an "approval procedure" under Article 8 of the 
SPS Agreement . The United States argues that the Panel's analysis of the scope of Article 8 and 
Annex C in the Interim Report is not supported by any language within the SPS Agreement itself or by 
the SPS Committee's Decision on the Implementation of  Article 4. The United States fundamentally 
disagrees with the reasoning in the Interim Report,  which the United States describes as filling a 
"loophole" in SPS disciplines.   
6.16 Additionally, the United States submits that th e Panel's findings regarding China's claims 
under the other provisions largely flow from the Article 5.1 findings and involve little if any additional factual analysis and therefore do not add to  a resolution of this dis pute.  The United States 
considers that these types of consequential breaches would seem ideal candidates for judicial 
economy.  
6.17 Finally, the United States argues that it w ould seem unnecessary to the effective resolution of 
this dispute that the Interim Report finds nine di fferent breaches of the WTO Agreements arising from 
a one-sentence, expired measure.  WT/DS392/R 
Page 76  
 
 6.18 Having noted the approach of previous panels  towards judicial economy when claims were 
made under more than one GATT 1994 provision, and r ecognizing that the core issues in the dispute 
were determined in the context of an Article XX  exception, the United States requests the Panel to 
adopt the same approach by exercising judicial ec onomy with respect to China's claim under Article I 
of the GATT 1994.  The United States is concerned a bout the systemic implication of the application 
of the GATT "like product" standard between two otherwise identical products based on the food 
safety system in place at the product's origin which, it submits, has long been one of the more difficult and controversial aspects of the GATT and the WT O.  The United States argues that under Article 4 
of the SPS Agreement , the products from an exporting Member who fails to demonstrate that its 
measures are equivalent, are not "like products" to those shipped by another exporting Member whose 
food safety regime has been demonstrated to be equivalent to the importing Member's food safety 
regime or otherwise any difference in procedures a pplied in determining Memb er's equivalence– as 
well as any difference in procedures applied in an y origin-based safety determination – will be 
deemed to result in a breach of Article I of the GATT 1994.    
6.19 China  strongly objects to the United States' request that we exercise judicial economy in 
respect of its claims under Articles 2.3, 5.5, 8 and Annex C of the SPS Agreement , and Article I of the 
GATT 1994.  
6.20 China submits that the United States' request reads more like a party's special third written 
submission on the merits of judicial economy, rath er than comments on the Interim Report of a panel 
that has already gone through the time and effort of carefully considering and deciding the numerous legal questions presented in this dispute.  China contends that the substance of the United States' 
arguments regarding judicial economy largely mirrors  and repeats virtually identical arguments that 
were made in the United States' previous submissions – arguments that were rejected by the Panel and that need not be considered again in this contex t.  Consequently, it submits, the United States' 
arguments on judicial economy are inappropriate as part  of a request for review of an Interim Report.  
More importantly, China argues, they are based on erroneous statements about the SPS Agreement , 
the GATT 1994, and of the underlying facts. 
6.21 For China, to the extent that judicial economy is intended to reduce the workload of a panel, 
the United States' request for judicial economy woul d instead call for the opposite – it would require 
additional  work by the Panel.  China argues that the United States extensively reiterates and expands 
arguments from its earlier submissions in its attempt to persuade the Panel to  remove certain of its 
findings from the Interim Report on the grounds of judi cial economy.  China recalls that panels and 
the Appellate Body have found it inappropriate for a party to repeat prior arguments at the interim 
review stage, and they have found that further deve lopment of arguments at the interim review phase 
were outside of a panel's jurisdiction.   
6.22 China submits that each of the findings ma de by the Panel are necessary for an effective 
resolution of this dispute and it is important to r ecall that judicial economy is not referred to in the 
DSU, and should be applied carefully in exceptional cases at the discretion of the Panel.  China argues 
that the three factors invoked by the United States are not justification to exercise judicial economy of 
any of the claims.  As for the first factor being this  is the first WTO dispute that tangentially relates to 
an equivalence regime, China submits that the United States' argument on a number of issues of 
systemic importance concerning the relationship between Article 4 and other provisions of the 
SPS Agreement  does not justify a request that the Panel redact its findings on Articles 2.3, 5.5, 8, and 
Annex C of the 
SPS Agreement and Article I of the GATT 1994.  With respect to the United States' 
argument that Article 5.1 of the SPS Agreement  is the only provision that the Panel need consider, 
China believes this argument is deeply flawed a nd inconsistent with the object and purpose of the 
SPS Agreement.  According to China,  because each individual claim under the SPS Agreement 
addresses a different element of Section 727 exer cising judicial economy on the other SPS claims 
would result in reversible error in law as well as be "false judicial economy" because the Panel's  WT/DS392/R 
 Page 77 
 
 
 findings will only provide a partial ineffective resoluti on to the matter at issue.  With respect to the 
idea that the number of breaches found of various provisions of the WTO agreements  arising from an 
expired measure that would seem unnecessary to the e ffective resolution of this dispute, China argues 
that all of the findings are important for providing pr edictability for future cas es dealing with the same 
or similar matters taking particular note that th e same language used in Section 727 was used in 
previous appropriations measures.  China also notes that the expiration of a measure at issue has not 
prevented panels and the Appellate Body from making extensive findings in respet of those measures.  
6.23 With respect to the United States' request to  exercise judicial economy on China's claims 
under Articles 5.5 and 2.3 of the SPS Agreement , China argues that the findings under Articles 5.5 and 
2.3 regarding Section 727 will not have any of the ominous impacts on equivalence-based systems 
that the United States claims to fe ar because Section 727 is not a part of, or an "ordinary action taken 
in the course of", the FSIS equivalence proce dures but instead a discriminatory ban on poultry 
products from China – and only China.  Moreover, China contends that if the Pa nel were to delete its 
findings under Articles 2.3 and 5.5, it must th en go on to more fully develop and expand its 
Article XX(b) analysis – which is clearly not some thing that can be considered "judicial economy". 
6.24 With respect to the United States' request to  exercise judicial economy on China's claims 
under Articles 8 and Annex C of the SPS Agreement , China argues that the Unit ed States' request that 
the Panel reconsider the same arguments they made with respect to the substantive interpretation of 
the provisions, this time as a justification for judi cial economy, is inappropriate and based on the same 
erroneous reasoning presented in its  second written submission which has been properly considered 
by the Panel.  
6.25 With respect to the United States' request to exercise judicial economy on China's claim under 
Article I of the GATT 1994, China contends that out of the three reasons invoked by the United States 
only the reason where there is already a finding unde r Article XI of the GATT 1994 relates to judicial 
economy.  China considers that, nevertheless, such a reason is unconvinc ing because the Panel's 
ruling highlights a line that WTO Members cannot cross – to violate the core most favoured nation 
non-discrimination principles of Article I of th e GATT.  China additionally argues that the 
United States enactment of Section 743, which it says  is the successor to Section 727, is an important 
reason for not exercising judicial economy on this cl aim, as this Section continues to single out and 
impose restrictios on China.  Therefore, China believ es that there is a compelling need for the Panel to 
send a clear and strong reminder to the United States and other WTO Members that such discriminatory treatment is not, and cannot be, ju stified under GATT and WTO rules.  Furthermore, 
China supports the Panel's reliance on an hypothetical like product analysis where there is an origin-
based discrimination or it is not possible to make the like product comparison because of, for 
example, a ban on imports.  China reiterates that Section 727 is not the outcome of an equivalence 
procedure but instead it blocked access to the norma l equivalence procedures for China, and China 
alone, in a manner that was grossly discriminatory and completely unrelated to the outcome of an 
equivalence procedure.    
6.26 The Panel has carefully considered both the Unite d States' request that we exercise judicial 
economy in respect of China's claims under Articles 2.3, 5.5, 8 and Annex C of the SPS Agreement , 
and Article I of the GATT 1994, and China's objections thereof.   
6.27 As put by the Appellate Body, the practice of judicial economy allows a panel to refrain from 
making multiple findings that the same measure is inc onsistent with various provisions of the covered 
agreements when a single, or a certain number of findings of inconsistency, would suffice to resolve 
the dispute.154  Behind this practice lies the understanding that the job of panels is not to create law or 
provide authoritative interpretations of provisions of the WTO Agreements but rather to provide a 
                                                      
154 Appellate Body Report, Canada – Wheat Export and Grain Imports , para. 133. WT/DS392/R 
Page 78  
 
 positive solution to the dispute at hand. Panels are ne vertheless not constrained to resort to judicial 
economy.
155  Indeed, as the Appellate Body has concluded, "[a]lthough the doctrine of judicial 
economy allows a panel to refrain from addressing claims beyond those necessary to resolve the 
dispute, it does not compel a panel to exercise such restraint."156  In fact, the Appellate Body has ruled 
that in some instances, a panel's decision to conti nue its legal analysis and to make factual findings 
beyond those that are strictly necessary to resolve the dispute may assist the Appellate Body should it 
later be called upon to complete the analysis.157   
6.28 We are therefore not compelled to exercise judicial economy but have discretion to do so 
where we believe our findings under one or more provisions of the covered agreements within our 
terms of reference have already provided a positiv e solution to the dispute and additional findings 
would serve no purpose. The Panel recalls that we have resorted to judicial economy in respect to 
China's claims under part of Article 5.5 of the SPS Agreement  and Article 4.2 of the Agreement on 
Agriculture.   We are however of the view that, in the circumstances of the present dispute, we should 
not be exercising judicial economy in respect of Ch ina's claims under Articles 2.3, 5.5, 8 and Annex C 
of the SPS Agreement , and Article I of the GATT 1994.   
6.29 The United States submits that the Panel should exercise judicial economy with respect to 
these claims based on three factors. The first of these factors is that, as we acknowledge in 
paragraph 7.134 of the Interim and Final Reports, this is the first WTO dispute involving a food-
safety regime based on the principle of equivalen ce. The United States seems to argue that because 
there are a number of issues of first impression which have systemic importance, particularly the legal relationship between Article 4 and other SPS provisi ons, the Panel should avoid these issues through 
the guise of judicial economy.  First, the Panel notes that it was the United States who raised the relationship between Article 4 a nd the other provisions of the SPS Agreement when it argued that 
those provisions were inapplicable to Section 727 because it was governed solely by Article 4, a 
provision which is outside the Panel's terms of refere nce.  The Panel is obliged under Article 11 of the 
DSU to determine the applicability of the provisions cited in the Panel Request, before entering into 
an examination of whether the challenged measures ar e in conformity with those provisions.  Because 
the United States argued particularly that Article 4 w as the applicable provision to the exclusion of the 
ones cited by China, the Panel was compelled to ente r into an examination of the relationship between 
Article 4 and the other provisions of the SPS Agreement , in particular the question of whether 
coverage under Article 4 precludes the applicability of other provisions of the SPS Agreement.  If the 
Panel had not done so we would have been acting c ontrary to our obligation under Article 11 and to 
the due process rights of the United States.  Additiona lly, the Panel fails to understand why, as China 
points out, the fact that this is the first WTO dispute involving a food-safety regime based on the 
principle of equivalence and that some of the findi ngs may have systemic relevance should be a factor 
in deciding whether the Panel exercises judicial econo my on China's claims under Articles 2.3, 5.5, 8, 
and Annex C of the SPS Agreement.   As explained above, judicial economy relates to finding a 
positive solution to the dispute at hand rather than to th e systemic nature of the claims being raised.  It 
is our view that panels should not use judicial economy to avoid tough questions as this does not 
provide a positive solution to the dispute.  Additionall y, if every panel were to avoid systemic issues 
of first impression, those provisions  would never be clarified, which is one of the principal purposes 
of the dispute settlement system articulated in Article 3.2 of the DSU. 
6.30 The second factor alleged by the United States as a reason for this Panel to exercise judicial 
economy is that the Panel's findings regarding Chin a's claims under the other provisions largely flow 
from the Article 5.1 findings and involve little if an y additional factual analysis and therefore do not 
                                                     
 
155 The Appellate Body has often cautioned panels against exercising "false  judicial economy".  
Appellate Body Report, Australia – Salmon , para. 223.  
156 Appellate Body Report, Canada – Wheat Export and Grain Imports , para. 133. 
157 Appellate Body Report, US – Gambling,  para. 344.  WT/DS392/R 
 Page 79 
 
 
 add to a resolution of this dispute. We disagree with the United States. As pointed out by China, each 
individual provision of Article 5 addresses a different  obligation some address risk assessment others 
the appropriate level of protection.  We do not belie ve that a finding solely on the lack of a risk 
assessment provides a positive resolution with respect to a claim of discrimination in the application 
of the appropriate level of protection.  We do not contend that panels need always examine each and 
every claim under the SPS Agreement .  The Panel recalls that we did exercise judicial economy in 
respect to part of China's claim under Article 5.5 of the SPS Agreement and on China's claim under 
Article 4.2 of the Agreement on Agriculture . Furthermore, we did not make findings under Article 5.6 
of the SPS Agreement because, as explained in paragraph 7.3 36 of both the Interim and Final Reports, 
we did not have the necessary elements before us  to examine the claim.  However, under the 
circumstances of this dispute, the Panel does not believe that exercising judicial economy on China's 
claims under Articles 2.3, 5.5, 8, and Annex C of the SPS Agreement is appropriate. 
6.31 The third factor put forward by the United Stat es is that finding nine different breaches of the 
obligations in the WTO agreements arising fro m a one-sentence, expired measure would seem 
unnecessary to the effective resolution of this dis pute.  Again, the Panel fails to understand the 
relationship between the length of the measure at is sue and the need to exercise judicial economy on a 
number of claims. If panels were to consider the le ngth of the measures at issue as a factor in their 
decision to whether or not exercise judicial economy, we wonder what would happen in cases where the measure at issue is an omission, rather than a legal provision. The United States also stresses the 
fact that Section 727 has expired.  The Panel agre es with prior panels and the Appellate Body that 
making findings on expired measures may serve to  provide a positive resolution to a dispute.  
Particularly in a case such as this, where the measure  at issue was one that was contained in annual 
appropriations measures which by their nature expire  at the end of every fiscal year, basing a decision 
to exercise judicial economy on the fact that the me asure is expired could deprive the complainant of 
any meaningful review of its claims and any finding s that would assist in the positive solution of the 
dispute.  The Panel does address the fact that the me asure is expired precisely in paragraphs 8.7 to 8.9 
of the Interim and Final Reports where we explai n that, although the Panel is making findings on the 
consistency of Section 727 with the SPS Agreement  and the GATT 1994, it refrains from making 
recommendations under Article 19 of the DSU.    
6.32 The United States' other argumentation in s upport of its position on judicial economy seems 
to repeat or expand its prior submissions to this Pa nel on its views of the substantive interpretation of 
the provisions of the SPS Agreement and the GATT 1994.  We note that the interim review is not the 
appropriate forum for relitigating ar guments already put before a panel
158 and that the Panel has 
already addressed the United States' arguments where appropriate in its findings.  We will therefore 
briefly address the United States' arguments and will t hus refrain from engaging in a new analysis of 
the United States' substantive arguments on these provi sions.  We will also make a brief clarification 
with respect to the United States' arguments on Article 8 and Annex C.     
6.33 In the context of requesting the Panel exer cise judicial economy on China's claims under 
Article 8 and Annex C, the United States argues that the Panel has characterise d its interpretation of 
Article 8 and its relationship to e quivalency procedures that might also be governed by Article 4 as 
filling a "loophole".  The Panel would like to clarify that in paragraphs 7.37 5-7.376 of the Interim 
Report, we were expressing our understanding that the implications of following the United States' 
interpretation that equivalency procedures are exem pt from the strictures of Article 8 and Annex C 
would create  a loophole in the SPS Agreement.  The Panel did not say nor did it intend to imply that 
its interpretation was "filling" a loophole that curren tly exists in the Agreement as we understand it.   
6.34 The last point raised by the United States that we should exercise judicial economy on China's 
claim under Article I:1 of the GATT 1994 and instead examine China's claim only under Article XI of 
                                                      
158 Panel Report, Japan – DRAMS , para. 6.2. WT/DS392/R 
Page 80  
 
 the GATT 1994.  The main reasoning of the United States is again its concern of the systemic 
implications of the like products analysis under Article I given the alleged food safety difference 
between the products.  The Panel renews its view th at judicial economy is not appropriately used to 
avoid issues of first impression or those that might  have systemic implications.  Secondly, we note 
that Articles I:1 and XI:1 address different obliga tions, namely MFN treatment and the prohibition on 
quantitative restrictions.  We do not see how a fi nding of violation of Article XI:1 on import 
prohibitions provides a positive solution to a dispute with respect to discrimination.  
6.35 Accordingly, the Panel declines the United Stat es' request that the Panel exercise judicial 
economy on China's claims under Articles 2.3, 5.5, 8, and Annex C of the SPS Agreement and 
Article I of the GATT 1994. 
2. Factual aspects 
6.36 Regarding paragraph 2.17 of  the Interim Report, the United States  suggests to the Panel that 
the last sentence be amended to read: "The repor t found a number of deficiencies in some processing 
and slaughter plants, and as a consequence, the FSIS sent a letter to China proposing a follow-up 
equivalence audit to check whether the defi ciencies identified in the slaughter system
 during the 
December 2004 audit had been corrected".  The United  States argues that this change is necessary to 
reflect the fact that the letter sent by the United States on 13 June 2005, which is cited in this 
paragraph, only related to the deficiencies identifie d in the slaughter system, not to any deficiencies 
FSIS found in the process system.  
6.37 China does not object to this insertion in particular.   
6.38 The Panel has made the suggested change in  paragraph 2.17 of the Final Report.   
6.39 Regarding paragraph 2.18 of  the Interim Report, the United States suggests to the Panel that 
the paragraph be amended to read:  
"The FSIS conducted the second initial equiva lence audit on China's poultry slaughter 
inspection system  in July and August 2005, and on 4 November 2005 issued its Final 
Report.  On the basis of the first on-site audit this Report , on 23 November 2005, the 
FSIS proposed to amend the Federal Poultry Products Inspection regulations  to add 
China to the list of countries eligible to export processed poultry products to the 
United States, provided that the poultry products processed in certified establishments in China came from poultry slaughtered in the United States or certified establishments in other countries eligible  to export poultry to the United States." 
6.40 The United States argues that these changes are ne eded to reflect the fact that the second 
initial equivalence audit was only focused on Ch ina's poultry slaughter inspection system.   
6.41 China does not object to this insertion.   
6.42 The Panel has amended the first sentence in pa ragraph 2.17 of the Final Report as suggested 
but decides to partially keep the language of the se cond sentence.  The Panel has also redistributed the 
language between the relevant pa ragraphs for clarity purposes. 
6.43 Regarding paragraph 2.19 of  the Interim Report, the United States suggests to the Panel that 
the third sentence in that paragraph ("The initia l equivalence audits fo r poultry processed but not 
slaughtered in China and that of the slaughtered poultry in China were conducted separately.") be 
deleted.  The United States argues that this deleti on is needed to reflect the fact that the initial  WT/DS392/R 
 Page 81 
 
 
 equivalence audit included an assessment of China' s processed poultry inspection system and poultry 
slaughter inspection system.  
6.44 China does not object to this insertion.   
6.45 The Panel has made the suggested change in paragraph 2.19 of the Final Report. 
3. Whether Article 4 is the only provision of the SPS Agreement  applicable to Section 727 
6.46 The United States  has requested that the Panel insert the following sentence at the end of 
pargraph 7.151 of the Interim Report: "In addition, the United States argues that Section 727 and its 
JES also contributed to the protection of life and h ealth by ensuring that FSIS would take additional 
steps to evaluate China's food safety inspection sy stem in light of its recent food safety crises, 
enforcement issues, and new food safety law".   
6.47 China objects to the proposed insertion because it do es not add anything material to the 
Panel's summary of the United States' argument s.  However, should the Panel accept the 
United States' suggestion, China suggests some redrafti ng.  In particular, China requests that the text 
be removed from "by ensuring that FSIS ..." onwards  and replaced with "by urging USDA to submit a 
'report' within one year, and to submit a 'plan of  action' to guarantee the safety of poultry products 
from China to Congress".  China submits that such a language is a more accurately reflection of the 
only actions FSIS could have undertaken during the pendency of Section 727.  
6.48 Having considered the comments of both parti es, the Panel agrees with the insertion of the 
sentence at the end of paragraph 7.151 of the Fi nal Report as suggested by the United States because 
the paragraph in question intends to summarize th e arguments put forward by the United States and 
such a language reflects the United States' argument ation in paragraphs 17-30  of its second written 
submission.   
6.49 The United States also requests that the Panel modify th e first sentence of paragraph 7.154 in 
the following manner:  "It is through this ban, as well as the related activity that the U.S. government 
took while the ban was in place , that Section 727 would be contributing to combating the risks 
highlighted by the United States."  The United States  indicates that it is suggesting this modification 
to avoid the misleading implication that the limitation on Chinese poultry imports during FY 2009 
related to the funding restriction was the only manner in which Section 727 contributed to the 
objective of protecting human and animal life and h ealth from the risk posed by Chinese poultry.  The 
United States submits that the JES which accompanied Section 727 also contributed to this objective 
by instructing the FSIS to take certain actions to r espond to the concerns that US Congress raised with 
regard to the safety of poultry from China. 
6.50 China  has not raised any objecti ons to the proposed insertion. 
6.51 The Panel will insert a reference to the acti ons the JES urged the USDA to undertake but 
declines to use the exact language  volunteered by the United States and instead uses language closer 
to that actually contained in the JES.  The Pa nel has thus inserted the following language in 
paragraph 7.154 of the Final Repor t: "It is through this ban, as well as the related activity that the 
USDA was urged to undertake, that Section 727 would be contributing to combating the risks 
highlighted by the United States." WT/DS392/R 
Page 82  
 
 4. Whether Section 727 is based on scientific principles and is not maintained without 
sufficient scientific evidence as required by Article 2.2 of the SPS Agreement  
6.52 The United States has requested the Panel to modify the language of paragraphs 7.196 and 
7.202.  Concerning paragraph 7.196, the United St ates would like the panel to revise as follows:  
"The United States argues that evidence of China's food safety crises and enforcement 
problems support Section 727, especially in light of the fact that FSIS's equivalence 
system places a large reliance on the exporting country to enforce its own laws to 
ensure that the food being exported is safe.  In addition, the United States produced 
scientific evidence related to avian influe nza, poultry smuggling, and melamine in 
chicken feed .  The United States also contends that  it follows scientifically from this 
evidence, of food safety enforceme nt problems in China  that there was a need to take 
additional action to  ensure that exports from China would be safe." 
6.53 With respect to paragraph 7.202, the Unite d States proposes that the Panel modifies its 
language as follows: 
"Additionally, with respect to the evidence the United States refers to, we note that 
the majority  while it  of this evidence  deals generally with widespread  food safety 
issues in China, it  and  does not specifically address China's poultry inspection 
system.  The United States also introduced evidence with regard to avian influenza 
and the particular risk posed by China' s enforcement problems in the context of 
FSIS's equivalence regime . We also note that the evidence does not address the 
existence of the risk which the measure is suppo sed to address.  We accept the 
United States' point that the general science on the safety of poultry products was 
well established prior to the imposition of Section 727.  However, the evidence 
referred to ...". 
6.54 The United States explains that these changes ar e necessary to accurately reflect the evidence 
that the United States introduced in the record with regard to the ri sk posed by Chinese poultry.  The 
United States submits that, as currently drafted, the Interim Report ignores the evidence provided by 
the United States regarding poultr y-related crises that occurred in  China, such as China's avian 
influenza problems, poultry smuggling, and the testin g of Chinese poultry for melamine.  At the same 
time, the United States submits, the Interim Report also ignores the discussion of the unique risk posed by China's enforcement probl ems in the context of an equiva lence regime, including the fact 
that the United States would be re lying on China to enforce its own laws to ensure that American 
consumers are protected.  Finally, the United States  indicates that the Interim Report also ignores the 
numerous problems that FSIS uncovered while co nducting audits of Chinese poultry inspection 
facilities.  The United States contends that it discuss ed the relevance of these three issues at length 
and introduced numerous exhibits into the record to support these points.   
6.55 China objects to the changes requested by the Un ited States in both paragraphs.  According 
to China, the two most problematic elements in  the United States' suggestions are the proposed 
additions to each paragraph.  The suggested inser tions to both paragraphs relate to the Panel's 
characterisation of the evidence that the United States  tendered to support Section 727.  In this regard, 
China argues, the most troublesome additions relate  to the FSIS procedures, such as the insertion on 
the third line of paragraph 7.202, immediately af ter the Panel's statement that "the evidence the 
United States refers to . . . does not specifically  address China's poultry inspection system."  The 
insertion suggested by the United States effectively asks the Panel to state that the United States, in 
fact, adduced evidence "with regard ... to the particular  risk posed by China".  China submits that this 
is patently false.  In successive submissions, the United States never a dduced specific scientific 
evidence of the particular risks posed by China's poultry products or its poultry inspection system.   WT/DS392/R 
 Page 83 
 
 
 6.56 China further indicates that it can agree only that the United States did submit several 
anecdotal and unconfirmed newspaper articles rega rding alleged enforcement problems – generally 
relating to foodstuffs other than poultry. China can also agree that the Unite d States adduced evidence 
that Chinese poultry flocks had been affected by Av ian Influenza – despite the facts that (a) China 
was not yet eligible to export domestically slaugh tered poultry to the United States (making avian flu 
irrelevant for the poultry products that China initia lly expected to export); (b) the United States 
readily imported poultry products from Israel when Israel  was affected by Avian Influenza; and 
(c) FSIS recognizes that "processed poultry" is p oultry "processed with k ill steps sufficient to 
inactivate bacteria and viruses".  
6.57 Having considered the comments of both parties,  the Panel notes that some of the language 
suggested by the United States could be misinterpret ed as if the Panel considers that Section 727 was 
based on scientific evidence and thus an appropriate risk assessment was conducted.  It is correct that 
the United States has submitted evidence relating to f ood crisis (baby formula, food additives etc) and 
enforcement problems in China.  Th is evidence which was mainly in the form of newspaper articles, 
studies from international bodies or by US authorities such as the USDA, relates to food products 
other than poultry from China.  While one could argue that given these incidents, a risk to human and 
animal life and health may arise from imports of poultr y products from China, other than the FSIS report 
itself, the United States has provi ded no scientifically conducted study which woul d justify the existence 
of such risk.  The United States has also provi ded newspaper articles co ncerning poultry from China 
which had been smuggled into the Unit ed States and thus has illegally entered into the territory of the 
United States.   
6.58 In light of the above comments, the Panel par tly agrees with the insertions proposed by the 
United States in paragraph 7.196 below of the Final Report, which summarizes the arguments put 
forward by the United States.  This paragraph would now read:  
"The United States argues that evidence of China's food safety crises and enforcement 
problems support Section 727, especially in light of the fact that FSIS's equivalence 
system places a large reliance on the exporting country to enforce its own laws to 
ensure that the food being exported is safe.  The United States produced a number of 
newspaper articles and publica tions related to avian infl uenza, poultry smuggling, and 
melamine in chicken feed.   The United States thus contends that it follows 
scientifically from that evidence, of food  safety enforcement problems in China  that 
there was a need to take additional action to  ensure that exports from China would be 
safe." 
6.59 In respect to paragraph 7.202 of the Final Report, the Panel does not consider that it is 
necessary to change the first sentence since the word  "generally" does not mean "exclusively".  We 
are however inserting the following sentences in orde r to take into account the concerns of both 
parties:  
"... The United States has produced a number  of newspaper articles and publications 
related to avian influenza, poultry smuggling,  and melamine in chicken feed.  Apart 
from the FSIS reports in the framework  of the equivalence proceedings, the 
United States has not submitted to the Pane l any specific scientific justification, 
notably through a risk assessment carried  out according to the principles and 
disciplines in Article 5 and paragraph 4 of Annex A of the SPS Agreement , 
concerning the risk posed by poultry products from China ..."  WT/DS392/R 
Page 84  
 
 5. Whether Section 727 is inconsistent with Article 5.5 of the SPS Agreement  
6.60 With respect to paragraph 7.209 of the Interim Report, the United States proposes that the 
Panel changes the third sentence of such paragra ph as follows: "While on the other hand, the ALOP 
for all other WTO Members' poultry provided in the FSIS procedures or non
-poultry food products 
provided in FDA import procedures  tolerates some risk as long as the WTO Members' inspection 
system has been deemed equivalent to the US system." 
6.61 The United States suggests this modification for two reasons.  First, the United States argues 
that it is inaccurate to state that the FDA's import procedures "tolerate risk as long as the WTO 
Members' inspection system has been deemed equiva lent to the US system" because the United States 
does not operate an equivalence regime for pr oducts under FDA's jurisdiction.  Second, the 
United States submits that it cannot find this asser tion in China's answer to Panel question No.117 
from the Panel, which the Panel cites to support this point.   
6.62 China  does not object to this change in particular. 
6.63 The Panel notes that paragraph 7.209 includes a summary of China's arguments concerning 
Section 727's inconsistency with Article 5.5 of the SPS Agreement .  It is not the Panel's 
argumentation.  Accordingly, the Pa nel declines to make the changes suggested by the United States.  
Concerning the United States' argument on the absence of a reference to the FDA in China's response 
to Panel question No. 117, the Panel agrees that this  reference was incorrect.  Therefore the Panel has 
corrected the citation to reflect wh ere China actually made this argumen t, which is in China's response 
to Panel question No.124 in footnote 432 of the Final Report. 
6. Miscellaneous 
6.64 In addition to the substantive comments presen ted above, the United States offered a number 
of typographical and stylistic suggestions.  The Panel has accommodated the United States' 
suggestions where appropriate.   
VII. FINDINGS 
A. PRELIMINARY ISSUES  
1. Terms of reference of the panel 
(a) Introduction 
7.1 A number of issues that may affect its terms of reference have been put before the Panel in 
these proceedings. At the outset of the proceedings , the United States requested a preliminary ruling 
concerning China's SPS claims. Additionally, the i ssue has arisen whether an alleged moratorium159 
                                                      
159 In its first written submission, China challenged as a measure an alleged moratorium that it 
contended the United States had been maintaining since 26 December 2007. China described the moratorium as 
consisting of a suspension of (a) consideration of applications for the approval of, (b) granting of approval of, 
and (c) implementation of approvals of, the import of poultry products from China under the US system for 
regulating the import of poultry products. According to China, this alleged moratorium was initiated by the predecessor to Section 727 (i.e. Secti on 733) and continued by Section 727, as it would be by any amendments 
or replacement measures, any subsequent closely-relate d measures, and any future closely-related measures. 
China argued that the alleged moratorium was also effectuated by the deliberate failure of the United States to follow and implement the PPIA and the FSIS Regulations (e .g., for inspections, auditing, and evaluation) related 
to the eligibility of countries and entities to import poultr y products, as applied to China. China's first written  WT/DS392/R 
 Page 85 
 
 
 existed and whether the allege d moratorium and a measure160 enacted after the establishment of the 
Panel were within our terms of reference. As expl ained below, the Panel need not resolve the latter 
two issues because China has decided not to pursue th em within the confines of this dispute. Others, 
such as the United States' contention that China ha d not requested consulta tions on its claims under 
the SPS Agreement and that, therefore, these are not within th is Panel's terms of reference, will be 
addressed below.  
7.2 Another issue that pertains to this Panel's term s of reference is whether the Panel can rule on 
an expired measure given that Sec tion 727 is no longer in force.  
(b) Request for a preliminary ruling by the United States 
(i) Background 
7.3 As indicated above, the United States argues that  consultations were not requested under the 
SPS Agreement . China's consultations request read s in the relevant parts as follows: 
"In addition, although China does not believe th at the US measures at issue restricting 
imports of poultry products from China constitute sanitary and phytosanitary 
measures ('SPS measure') within the meaning of the Agreement on the Application of 
Sanitary and Phytosanitary Measures ('SPS Agreement' ), if it were demonstrated that 
any such measure is an SPS measure, China also requests consultations with the US 
pursuant to Article 11 of the SPS Agreement . In particular, to the extent any such 
measure is demonstrated to be an SPS measure , China considers that the measure is in 
breach of the US obligations under the SPS Agreement , including but not limited to 
Articles 2.1-2.3, 3.1, 3.3, 5.1-5.7, and 8 thereof.  
Generally, to the extent it is demonstrated  that any such measure is an SPS measure, 
China is concerned that the US measure may violate Articles 2.1, 2.2, 5.1-5.4, and 5.6 
of the SPS Agreement , because any SPS measure is not based on a proper assessment 
of the particular risks presented and is not  supported by sufficient scientific evidence. 
China is also concerned that any such measur e, to the extent not applied with respect 
to similarly situated imports from other Members, may violate Articles 2.3 and 5.5 of the SPS Agreement . Moreover, China is concerned that any SPS measure fails to 
observe the provisions of Annex C of the SPS Agreement  with respect to the 
operation of control, inspection and approva l procedures, and may therefore violate 
                                                                                                                                                                    
 
submission, para. 24. In response to Panel question No. 12, China confirmed that it was no longer making any 
claims with respect to the alleged moratorium. 
160 As explained in paragraph 2.29, Section 743 wa s enacted on 21 October 2009; therefore two days 
after the deadline for China's first written submission (1 9 October 2009). In its first written submission, the 
United States alleged that Section 727 had expired and thus been supplanted by Section 743. The United States 
further contended that any funding restriction imposed by Section 743 had been lifted as a consequence of the Secretary of Agriculture's issuance of a letter to the US Congress on 12 November 2009. United States' first 
written submission, paras. 62, 68 and 74. The letter can be found in Exhibit US-45.  
At its oral statement at the first substantive meeting of the Panel with the parties, China requested a 
preliminary ruling from the Panel on whether Section 743  was part of the Panel's terms of reference. China 
stated that it would refrain from providing substantive arguments regarding what it considered to be the WTO-
inconsistencies of Section 743 until the Panel decides wh ether Section 743 was within its terms of reference. 
Further to the Panel's letter of 18 December 2009 info rming the parties of its decision not to rule on a 
preliminary basis and thus defer ruling on both these matters until issuance of the Interim Report, China 
informed the Panel China in a letter dated 7 January 2010 (Exhibit CN-51) that China would not argue the WTO inconsistency of Section 743 in its second written submissi on, but reserved its rights to challenge Section 743 in 
separate dispute settlement proceedings. WT/DS392/R 
Page 86  
 
 Article 8 of the SPS Agreement.  Additionally, China is unaware of any basis on 
which any such US measure is justified under international sta ndards, guidelines or 
recommendations, or otherwise, consisten tly with Articles 3.1 and 3.3 of the 
SPS Agreement . Finally, China is unaware of any basis on which such US measure is 
justified by Article 5.7 of the SPS Agreement , if applicable." (emphasis added) 
7.4 A few days after receiving the request for cons ultations the United States informed China, via 
a letter, that based on its understandi ng of China's consultations request:  
"[I]t appears that China is not
 requesting consultations pursuant to Article 11 of the 
[SPS Agreement ] since China does not believe that the SPS Agreement  applies to the 
measures at issue. China provides that it would request consultations under the 
SPS Agreement , only if a particular condition were met. That condition is that "it 
were demonstrated that any [measure at i ssue] is an SPS measure."  Yet there is no 
avenue or mechanism for such a demonstra tion to occur, and China's belief that none 
of the measures at issue is an SPS measure continues to govern China's request. The 
United States therefore understands from your letter that China is not, in fact, 
requesting consultations pursuant to Article 11 of the SPS Agreement ."161 
7.5 The next day, China responded with a letter cl arifying that the United States' understanding 
was not correct: 
"Through its request for consultations (WT/DS392/1), China has requested 
consultations under Article 11 of the SPS Agreement  to cover a contingency, namely 
the demonstration that any of the listed measures is an SPS measure. To that end, 
China will shortly provide the United Stat es with written questions requesting the 
United States to provide answers during th e consultations concerning the nature and 
status of measures identified in the cons ultation request. Thus, China has indeed 
requested, and the United States and China w ill engage in, a consultation that fully 
addresses relevant questions concerning whether any of the US measures are 
SPS measures within the meaning of the SPS Agreement . The parties will also consult 
on the questions regarding the various claims under the SPS Agreement  applicable to 
such measures, as stated in China's consultations request."162 
7.6 Three days before the organizational meeting held on 28 September 2009, the United States 
addressed a letter to the Panel indicating its intentio n to request a preliminary ruling by the Panel on 
whether China's SPS claims are part of its terms of reference. The United States contended that China 
had failed to request consultations under the SPS Agreement  and thus the SPS claims put forward by 
China could not be part of the Panel's terms of refe rence. In that letter, th e United States requested the 
Panel to include a preliminary ruling stage in its timetable for panel proceedings. China responded in 
a letter to the Panel dated 28 September 2009 where it argued that, in the light of, in particular, the 
exchange of letters, China's consulta tions request was made pursuant to, inter alia , the SPS Agreement 
and therefore its SPS claims were well with in this Panel's terms of reference.  
7.7 Further to the organizational meeting, the Pane l sent its working procedures and timetable to 
the parties on 1 October 2009. Regarding the United St ates' request that a preliminary ruling stage be 
included in the Panel's timetable, the Panel informed the parties as follows: 
"Concerning the United States' request for th e Panel to include a preliminary ruling 
stage in its timetable and thus working pro cedures, the Panel considers that it is not 
                                                      
161 Letter from the United States to China, 27 April 2009 (Exhibit US-1). 
162 Letter from China to the United States, 28 April 2009 (Exhibit CN-38).  WT/DS392/R 
 Page 87 
 
 
 necessary at this time to modify its proposed timetable and working procedures, 
which would further delay its proceedings . The Panel is of the view that the 
procedures foreseen in paragraph 11 of its  working procedures provide adequate 
means to address preliminary ruling requests.  If the United States wishes to request a 
preliminary ruling prior to the deadline for its first written submission, the Panel 
would then set a deadline for China to respond to the United States' request, and 
would thereafter dedicate a portion of its firs t substantive meeting with the parties to 
discuss the United States' request. If the Pa nel were to receive a request from the 
United States and a subsequent response from China, and thereafter determine that an 
earlier meeting with the parties would be n eeded, the Panel will inform the parties 
and amend its timetable accordingly. Having heard the parties at the first substantive 
meeting (or at an earlier stage if deemed  necessary), the Panel would then decide 
whether to issue a preliminary ruling, or withhold ruling on matters until issuance of 
the Interim Report." 
7.8 On 1 October 2009, the United States submitted a request for a preliminary ruling pursuant to 
paragraph 11 of the Panel's worki ng procedures. By letter of 7 Oct ober 2009, the Panel informed the 
parties and third parties as follows: 
"Further to the request for a preliminary ruling submitted by the United States to the 
Panel on 1 October 2009, the Panel invites China to submit its comments on such a request within the deadline for its first written submission (i.e. 19 October 2009). The 
Panel further invites the third parties to submit their comments on the preliminary 
ruling request by 26 October 2009. Were the Panel to decide that a preliminary ruling 
hearing is needed before its first substantiv e meeting, the Panel will inform the parties 
and third parties accordingly." 
7.9 In response to the Panel's instructions, Ch ina submitted its comments in its first written 
submission. The European Union and Korea were the only third parties that submitted comments on 
this issue. After the first substantiv e meeting, the Panel, in a letter to the parties, indicated that it 
would refrain from ruling on the issue of whethe r China had requested consultations under the 
SPS Agreement  until its Interim Report. The parties were  encouraged to make decisions about 
presenting arguments with respect to the consistency of Section 727 with the SPS Agreement  bearing 
that decision in mind.  
7.10 In the same letter, the Panel also addressed Ch ina's request, made during the first substantive 
meeting, for a preliminary ruling on whether Section 743
163 was part of this Panel's terms of reference. 
Specifically, the Panel informed the parties of its decision not to rule on a preliminary basis on this 
request. The Panel noted that if China were to make arguments with respect to Section 743, the 
United States would need to be given an opportunity  to reply and that this could delay the process. 
Therefore, China was requested to  inform the Panel by 11 January 2010 whether it would argue the 
WTO inconsistency of Section 743 in its second written submissi on. On 11 January 2010, China 
informed the Panel that it would not be pursuing claims against Section 743, although it did not 
foreclose the possibility of a future dispute on this measure. 
(ii) Arguments of the parties 
7.11 The United States contends that China's claims under the SPS Agreement are outside the 
Panel's terms of reference. In its view, China has failed to request consultations under Article 11 of 
                                                      
163 We recall in paragraph 2.29, the Panel noted that in the annual appropriations act for 2010 there was 
a provision, Section 743, which, a lthough worded differently than Sec tion 727, also relates to access to 
appropriated funds for the FSIS to establish or implemen t a rule allowing the importation of poultry from China. WT/DS392/R 
Page 88  
 
 the SPS Agreement . The United States submits that Article 4.7 of the DSU provides that a request for 
establishment of a panel may be submitted only afte r consultations have first been requested and 
therefore should a "matter" have been left out of the request for consultations, it will be outside the 
terms of reference of the panel.
164  The United States argues that in order for a Member to bring a 
dispute under the DSU with respect to the SPS Agreement , that Member must, according to Article 1.1 
of the DSU bring the dispute "pursuant to the c onsultation and dispute settlement provisions of the 
agreements listed in Appendix 1 to  this Understanding", including the SPS Agreement . The 
United States argues that China's consultations re quest was only made pursuant to Article 4 of the 
DSU, Article XXII of the GATT 1994 and Article 19 of the Agreement on Agriculture .  
7.12 Although China's consultations request does refer to Article 11 of the SPS Agreement , the 
United States argues that China's conditional langua ge means that consultations were not actually 
requested.165 The United States explains that China first st ated in its consultations request that it does 
not believe that the measures at issue fall within the SPS Agreement . China then stated that if it were 
demonstrated that any such measure is an SPS m easure, it also requests consultations with the 
United States pursuant to Article 11 of the SPS Agreement . The United States argues that as China 
stated that it does not believe that the relevant measures are SPS measures, China also rendered it 
clear that the imposed condition for a request fo r consultations pursuant to Article 11 of the 
SPS Agreement  had not been fulfilled. The United States th erefore submits that the only conclusion 
that can be reached is that the condition was not fulfilled and thus that no request pursuant to 
Article 11 of the SPS Agreement  was made.166  
7.13 The United States argues that although China states  that it intended to make claims under the 
SPS Agreement in the alternative (that is, if the United States were to invoke Article 2.4 of the 
SPS Agreement as a defence),167 it is undeniable that China's consultations request, as written, does 
not request consultations in order to pursue altern ative claims, but makes the request for consultations 
itself conditional on future developments. For the United States, this is the defect in China's 
consultations request with respect to the SPS Agreement , and China's subsequent attempts at 
clarification cannot cure the jurisdictional requi rement set forth in Article 1.1 of the DSU  that 
consultations must be requested pursuant to the c onsultation and dispute settlement provisions of each 
covered agreement for which disput e settlement under the DSU is sought.168 169 
7.14 According to the United States, it is unclear what entity could be empowered to determine 
whether the measures at issue had been "demonstrated " to be SPS measures, a nd thus whether China's 
purported condition had been fulfilled.170 The United States insists that the Panel cannot be the entity 
that determines whether the measures at issue ha ve been "demonstrated" to be SPS measures, for 
purposes of interpreting China's consultations request , because "if that were th e case, then the scope 
of China's consultations request – and therefore of  the Panel's terms of re ference – would depend on 
the substantive findings of the Panel."  The United States believes such a role for the Panel is not 
permitted under the DSU. According to the United Stat es, the Panel cannot alter its terms of reference 
                                                      
164 United States' request for a preliminary ruling, para. 14. 
165 Paragraph 6 of China's consultations request read s: "In addition, although China does not believe 
that the US measures at issue restricting imports of  poultry products from China constitute sanitary or 
phytosanitary measures ('SPS meas ure') within the meaning of the Agreement on the Application of Sanitary and 
Phytosanitary Measures ('SPS Agreement'), if it were demonstrated th at any such measure is an SPS measure, 
China also requests consultations with the US pursuant to Article 11 of the SPS Agreement ...". 
166 United States' request for a preliminary ruling, para. 20. 
167 The United States refers to China' s first written submission, para. 164. 
168 The United States refers the Panel to the Appellate Body Report, US – Upland Cotton , para. 287 
(stating that the panel in that dispute "should have limited its analysis to the request for consultations" in 
assessing whether consultations were requested for purposes of a preliminary ruling request). 
169 United States' first written submission, para. 160. 
170 United States' request for a preliminary ruling, para. 20.  WT/DS392/R 
 Page 89 
 
 
 by its findings; to the contrary, the terms of re ference set the boundaries of the Panel's work. They 
thus cannot be expanded by virtue of findings that the Panel makes. 171   
7.15 The United States contends that the DSU  confirms that the complainant must clearly specify 
the scope of its consultations request and that it can not make that scope conditional on future events 
or demonstrations of particular factual and lega l conclusions. For the United States, China has failed 
to comply with Articles 4.3, 4.4 and 4.7 of the DS U. The United States claims that Article 4.3 of the 
DSU  makes it clear that the obligation to consult und er a particular covered agreement is based on a 
request for consultations "made pursuant to" that covered agreement. The United States argues that 
given the conditional request for consultations under the SPS Agreement , no request for consultations 
was "made pursuant to" that Agre ement. The United States also argues that, in accordance with 
Article 4.4 of the DSU, a Member requesting consu ltations is required to give the reasons for the 
request and indicate the legal basis of the complaint.  In the present case, the consultations request did 
not, according to the United States, make any "rep resentations" whether the measures were "affecting 
the operation" of the SPS Agreement . Rather, the United States argues, the consultations request stated 
the opposite.172  
7.16 The United States argues that China's letter of  28 April 2009 cannot cure deficiencies in the 
consultations request. According to the United States , the Appellate Body has ruled that a deficiency 
in a Panel Request cannot be subsequently cured by  a complaining party's argumentation in its first 
written submission to a panel or statement made later in  that proceeding, at least to the extent that the 
deficiency is one that affects the panel's terms of reference.173  The United States argues that China's 
28 April 2009 letter was not a new or  revised consultations request, nor  did it meet the requirements 
set forth in the DSU  for consultations requests.174  Consequently, according to the United States, the 
absence of consultations pursuant to the SPS Agreement  on 15 May 2009 was attributable to a failure 
by China to request such consultations, and not a refusal by the United States to consult.175 The 
United States submits that its pos ition is consistent with, and sup ported by, Articles 3.10 and 4.2 of 
the DSU.176  The United States suggests that China may make a new request for consultations under 
the SPS Agreement , and that the two panel proceedings may eventually be harmonized.177 In response 
to Panel question No. 7, the United States indicated  that adding claims under a different covered 
agreement cannot be considered an "evolution" of th e legal basis for claims; rather, the DSU is clear 
that in order to bring claims under a covered ag reement, the dispute has to be brought under the 
consultation and dispute settlement provisions of that Agreement. 
7.17 China  argues that its consultations request was fully in accordance with Article 11 of the 
SPS Agreement  and Article 4 of the DSU. In China's view, not only was Article 11 of the 
SPS Agreement  invoked in the consultations request, but a number of potential violations of specific 
provisions of that Agreement were included in both  paragraph 6 and paragra ph 7 of its consultations 
request. China also states that it even anticipated  and rejected a number of the potential defences of 
the United States under the SPS Agreement  in paragraph 7 of its Request. China submits that it has 
made an alternative claim, and that an argument in  the alternative is not a proper basis for disrupting 
the ability of China to achieve a "p rompt settlement" of this dispute.178 China stresses that over 
30 per cent of its consultations request  was dedicated to claims under the SPS Agreement.179 
                                                      
171 United States' request for a preliminary ruling ., para. 21. 
172 United States' request for a preliminary ruling, para. 23. 
173 Appellate Body Report, EC – Bananas III , para. 143. 
174 United States' request for a preliminary ruling, para. 28. 
175 United States' request for a preliminary ruling, para. 9. 
176 United States' request for a preliminary ruling, paras. 23, 24, 26 and 37. 
177 United States' request for a prelim inary ruling, paras. 33, 34 and 39. 
178 China's first written submission, para. 163. 
179 China's first written submission, para. 161. WT/DS392/R 
Page 90  
 
 7.18 According to China, its letter of 28 April 2009 addressed to the United States should have 
eliminated any doubts that the United States could possibly have had as to whether the upcoming consultations would include issues relating to the SPS Agreement . This letter, it argues, was not, as 
argued by the United States, an attempt to cure a defi ciency in the consultations request but rather an 
attempt to clarify and re-state the basis of consu ltations in light of the le tter China received from the 
United States on 27 April 2009. China further argues th at, consistent with its letter, it provided the 
United States with numerous questions in another le tter of 8 May 2009, seeking to determine whether 
the United States considered the m easures at issue to be SPS measures.
180   
7.19 China argues that even if  there was a flaw in the consultati ons request, by the time the actual 
consultations were held on 15 May 2009, the United States cannot claim that it did not understand that 
China's consultations request expressed intent  to consult pursuant to Article 11 of the SPS Agreement . 
The letter dated 28 April 2009 and the consultations  request demonstrate that it had always been 
China's intent to actively consu lt pursuant to Article 11 of the SPS Agreement . China argues that a 
responding party cannot unilaterally control the jurisd iction of a panel by simply refusing to consult 
on measures or violations properly ra ised in a consultations request.181 
7.20 China argues that the United States' reading of th e consultations request must also be rejected 
as it fails to accord "sympathetic consideration" to "any representations" made by China as required 
by Article 4.2 of the DSU. China states that the pr ovision is not limited to representations framed as 
direct challenges rather than arguments in the alte rnative or conditional arguments. China states that 
the core of the US critique of China's consultations  request is the phrase "if it were demonstrated that 
any such measure is an SPS measure". China argues that the US argument fails to appreciate the role 
of consultations in WTO dispute settlement, and the fact that, as the Appellate Body explained, "the 
claims set out in a panel request may thus be e xpected to be shaped by, and thereby constitute a 
natural evolution of, th e consultation process".182  According to China, one of the legitimate purposes 
of the consultations was to give the United States th e opportunity to provide its views, together with 
requested factual information, that may have dem onstrated a basis upon which it could be concluded 
that the measures at issue were SPS measures.183  The wording chosen shows, according to China, that 
China was contemplating a bilateral diplomatic di alogue to clarify and better delineate the dispute, 
thus precisely what the United States asserts it understands as the purpose of consultations.184 
7.21 China refers to Mexico – Anti-Dumping Measures on Rice  where the Appellate Body stated 
that it was entirely appropriate that  during the consultation process, a "reformulation" of the complaint 
and legal claims may occur, that "takes into account new information".185 The Appellate Body 
explained further that "the claims set out in a panel request may thus be expect ed to be shaped by, and 
thereby constitute a natural evol ution of, the consultation process".186  China thus submits that one 
type of such "evolution" that can take place pursuan t to consultations is the evolution from a claim in 
the alternative to a less conditional (or unconditional)  claim. China indicated that it had anticipated 
receiving new information and greater clarity ab out the measures pursuant to the consultations. 
7.22 In China's view, a comparison of the requirements of Article 4.4 of the DSU  with those of 
Article 6.2 of the DSU  provides a helpful context confirming that  China has fully met its obligations 
under Article 4.4. China states that the relevant part of Article 4.4 of the DSU holds that a 
consultations request "shall give the reasons for the request, including identification of the measures 
                                                      
180 China's first written submission, para. 184. 
181 China's first written submission, para. 187. 
182 China refers to the Appellate Body Report, Mexico – Anti-Dumping Measures on Rice,  para. 138. 
183 China refers to the Appellate Body Report, Brazil – Aircraft,  para. 132. 
184 China's first written submission, para. 177. 
185 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138. 
186 Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 138.  WT/DS392/R 
 Page 91 
 
 
 at issue and an indication of the legal basis for th e complaint". In contrast, Article 6.2 of the DSU  
provides, in relevant part, that a panel request shall "identify the specific measures at issue and 
provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly". Accordingly, China argues, Article 4.4 of the DSU  requires merely an "indication" of the legal basis 
of the complaint. China suggests that the l esser requirement in Article 4.4 of the DSU  compared to 
that in Article 6.2 of the DSU  reflects the understanding that the lega l bases of claims often evolve 
during the course of consultations. China argues that it satisfied the burden of providing an 
"indication" with the consultations request submitted. Thus, China argues that even if formulating the 
legal basis for a claim as a conditional claim were not "sufficient to present the problem clearly", as required for the panel request and Article 6.2 of th e DSU, it would certainly meet the threshold of 
providing an "indication" of the legal basis for the complaint as required by Article 4.4 of the DSU.
187  
7.23 China argues that, in any event, given that many of the same questions that relate to China's 
claims under the GATT 1994 also impact upo n China's alternative claims under the SPS Agreement , it 
is China's understanding that the United States did, in fact, consult on SPS-related measures. Also, China argues that this is clear considering the expl icit reference to this effect in the Request for 
establishment.
188 
7.24 China also argues that to the extent that th e Panel finds it necessary to look beyond the scope 
of the consultations request to conf irm the inclusion of claims under the SPS Agreement , the existence 
of the questions posed by Chin a to the United States for the purposes of the consultations has 
significant evidentiary value. To support its contentio n, China refers to what it claims is an analogous 
situation in the Korea – Commercial Vessels  dispute. In those proceedings, the complainant put 
forward a list of questions that had been supplied to  the respondent prior to consultations as evidence. 
The Panel found that the very fact that the measure appeared in the questions was, along with the brief 
reference to available evidence, "alone … sufficient for us to conclude that the parties consulted on 
the entirety of the KEXIM Act, including any impl ementing decrees and other regulations, and that 
the European Communities was th erefore entitled to include tho se measures in its request for 
establishment of a panel".189 
(iii) Analysis by the Panel 
7.25 The Panel is therefore called upon to determin e whether China's use of the conditional tense 
in its consultations request means that China has not requested consultations under the SPS Agreement 
and whether that would deprive the Panel of jurisdiction to hear China's claims under the 
SPS Agreement. We note that there is substantial jurispr udence on the relevance of the consultations 
request and the holding of consultations to a panel's terms of reference. Howeve r, the implications of 
using the conditional tense in a consultations request have never been consider ed by previous panels 
or the Appellate Body.  
                                                      
187 China's first written submission, para. 179. 
188 China refers to its Panel Request, WT/DS392/2, para. 2. 
189 Panel Report, Korea – Commercial Vessels , para. 7.2, subparagraphs 8 and 11. WT/DS392/R 
Page 92  
 
 The relevance of the consultations request and th e holding of consultations to a panel's terms 
of reference  
7.26 A panel's terms of refere nce, as provided for in Article 7.1 of the DSU190, are generally set in 
the Panel Request which must follow the ru les set forth in Article 6.2 of the DSU.191  Additionally, the 
Appellate Body has explained that  "as a general matter, consultati ons are a prerequisite to panel 
proceedings"192 and has underscored the importance and benef its of consultations. In particular the 
Appellate Body has pointed out that consultations serve to help the parties assess the strengths and 
weaknesses of the case, narrow the scope of differe nces between them and reach a mutually agreed 
solution. In addition, consultations provide the par ties with an opportunity to define and delimit the 
scope of the dispute.193   
7.27 Consultations are regulated in Article 4 of the DSU. Article 4.2 of the DSU provides that 
"[e]ach Member undertakes to ... afford adequa te opportunity for cons ultation regarding any 
representations made by another Member concerning measures affecting the operation of any covered 
agreement taken within the territory of the former".  
7.28 The Appellate Body also observed in Brazil – Aircraft, that "Articles 4 and 6 of the DSU ... 
set forth a process by which a complaining party mu st request consultations, and consultations must 
be held, before a matter may be referred to  the DSB for the establishment of a panel".194  In that same 
proceeding, the panel had considered that because the DSU  essentially requires the DSB to establish a 
panel automatically upon request of a party, a panel cannot rely upon the DSB to ascertain that 
requisite consultations have been held and to establish a panel only in those cases.195  Accordingly, the 
panel determined "that a panel may consider whether consultations have  been held with respect to a 
'dispute', and that a preliminary objection may proper ly be sustained if a party can establish that the 
required consultations had not been held with respect to a dispute ."196   
7.29 The requirements that apply to consultations re quests are set out in Article 4.4 of the DSU, 
which provides, in relevant part, that "[a]ny requ est for consultations shall be submitted in writing and 
shall give the reasons for the request, including identification of the measures at issue and an 
indication of the legal basis for the complaint."   
                                                      
190 Article 7.1 of the DSU states that the standard terms of reference, unless otherwise agreed by the 
Parties shall be: 
"To examine, in the light of the relevant provisions in (name of the covered agreement(s) cited by the 
parties to the dispute), the matter referred to the DSB by (name of party) in document . . . and to make such 
findings as will assist the DSB in making the recommendations or in giving the rulings provided for in 
that/those agreement(s)" 
191 Appellate Body Report, Guatemala – Cement I , paras. 69-76; see also Appellate Body Report, US – 
Carbon Steel, paras. 125-127.(explaining that the identification of the specific measure and the legal basis of the 
complaint in the Panel Request comprise the "matter referred to the DSB".) 
192 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 58. 
193 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 54. 
194 Appellate Body Report, Brazil – Aircraft , para. 131. We note that in certain instances panels and the 
Appellate Body have recognized that a responding party may be considered to have waived its objection to a 
lack of consultations if it does not object in a timely manner. Appellate Body Report, Mexico – Corn Syrup 
(Article 21.5 – US) , para. 63 (dealing with a lack of consultations request under Article 21.5 of the DSU); 
Appellate Body Report, US – FSC , paras. 165-166. However, the United States objected to China's consultations 
request upon receipt of the request for consultations, at the DSB meeting where the panel was established, and 
directly to the Panel during the timeframe set forth for requesting preliminary rulings. Therefore we do not consider "waiver" as a possible basi s for why China's claims under the SPS Agreement, might be included in our 
terms of reference. 
195 Panel Report, Brazil – Aircraft, para. 7.10 (citing) Appellate Body Report, EC – Bananas III, 
para. 142. 
196 Panel Report, Brazil – Aircraft, para. 7.10.  WT/DS392/R 
 Page 93 
 
 
 7.30 We note that the term "legal basis of the comp laint" has not been interpreted in respect of 
Article 4.4 of the DSU. The Appellate Body has, however, interpreted the same term as used in 
Article 6.2 of the DSU  to mean the claim made by the complaining party.197  The Appellate Body has 
also clarified that a claim sets forth the complainan t's view "that the respondent party has violated, or 
nullified or impaired the benefits arising from, an  identified provision of a particular agreement." 198    
Given the nearly identical language in Article 4.4 of the DSU, we consider that this understanding 
could also be applied to the term "legal basis for the complaint" in Article 4.4.  
7.31 Article 4.4 of the DSU however requires the cons ultations request to include an "indication of 
the legal basis of the complaint" while Article 6.2 of the DSU requires the panel request to "provide a 
brief summary of the legal basis for the complain t sufficient to present the problem clearly".  
7.32 In this respect, China  argues that "indication" of the legal basis of the complaint under 
Article 4.4 requires significantly less than what is re quired under Article 6.2, i.e. "identify the specific 
measures at issue and provide a brief summary of the legal basis for the complaint sufficient to present the problem clearly". In China's view, an "i ndication" under Article 4.4 is a "hint suggestion, 
or piece of information from which more may be inferred" while Article 6.2 requires a description 
that is "sufficient" meaning adequate for a certa in purpose, enough, to present the problem clearly.
199  
China considers that this difference reflects the he ightened burden of panel requests under Article 6.2 
of the DSU and the understanding that the legal ba sis of a claim often evolve during the course of 
consultations.200  China thus submits that it had met the burden of providing as "indication" in terms 
of Article 4.4 of the DSU.201 
7.33 The United States  agrees that an "indication" of the legal basis does not require that all the 
claims be spelled out in the consultations reque st. However, the United States argues that this 
distinction is not pertinent to the issue of whether claims under the SPS Agreement are within the 
Panel's terms of reference, because, in its view, China's consultations request plainly states China's 
view that the United States' measure is not subject to the SPS Agreement .202 
7.34 In describing how a panel must examine a panel request for consistency with the obligations 
in Article 6.2 of the DSU, the Appellate Body has noted that the panel request must be examined as a 
whole and in light of attendant circumstances.203  Given the relationship between the consultations 
request and the panel request, the shared language in Article 4 and Article 6.2 of the DSU, the similar 
purposes of the two requests, i.e. to delimit the scope  of the dispute, and the need to interpret both 
provisions in a harmonious way204, we find the Appellate Body reasoning pertinent for the analysis of 
the consistency of consultations requests with the obligations of Article 4.4 of the DSU as well.  
                                                      
197 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 162. 
198 Appellate Body Report, Korea – Dairy , para. 139. 
199 China's response to Panel question No. 6. 
200 China's response to Panel question No. 6. 
201 China's response to Panel question No. 6. 
202 United States' response to Panel question No. 6. 
203 Appellate Body Report, Korea – Dairy , paras. 124-127; also Appellate Body Report, US – Carbon 
Steel, para. 127. 
204 The Appellate Body has recognized the applicability of the principle of effectiveness ( ut res magis 
valeat quam pereat ) in the interpretation of the covered agreem ents. This principle was first discussed in 
Japan – Alcoholic Beverages II , para. 24. In US – Gasoline , the Appellate Body noted that this principle obliges 
a treaty interpreter to give meani ng and effect to all the terms of a treaty. (Appellate Body Report, US – 
Gasoline , p. 23). In light of the interpretative principle of effectiveness, the Appellate Body in Argentina – 
Footwear (EC) ruled that it is the duty  of any treaty interpreter to "read all applicable provisions of a treaty in a 
way that gives meaning to all of them, harmoniously." (Appellate Body Report, Argentina – Footwear (EC) , 
para. 81). The Appellate Body further held in Korea – Dairy that Article II:2 of the WTO Agreement expressly WT/DS392/R 
Page 94  
 
 7.35 The Panel is aware that in making its analysis of whether a particular claim was included in 
the consultations request, it should not inquire as to  what actually occurred during consultations. The 
panel in Korea – Alcoholic Beverages correctly noted that "[t]he only requirement under the DSU is 
that consultations were in fact held ... [w]hat takes place in those consultations is not the concern of a 
panel".
205  The Appellate Body explained in US – Upland Cotton that examining what took place in 
the consultations would seem contrary to Article 4. 6 of the DSU, which provides that "[c]onsultations 
shall be confidential, and without prejudice to the rights of any Member in any further proceedings."  
Finally, the Appellate Body noted that, there is no public record of what actually transpires during 
consultations and parties will often disag ree about what, precisely, was discussed.206   
7.36 Therefore, the Panel will inquire  whether China indicated the SPS Agreement  as a legal basis 
for its complaint in its consultations  request and in doing so will look at  that consultati ons request as a 
whole and in light of the attendant circumstances.  However, the Panel will not use as a basis for its 
determination what either party a lleges took place during consultations.207 Therefore, while we will 
consider the exchange of letters in April 2009 – which are precisely about the scope of China's 
consultations request – we will not consider an y questions posed or answers given during the 
consultations.  
Whether China has requested consultations pursuant to the SPS Agreement  
7.37 The United States focuses its argumentation on China's statement that it does not believe that 
the United States' measures are SPS measures and th at it is requesting consultations with the 
United States pursuant to Article 11 of the SPS Agreement  "if it were demonstrated that any such 
measure is an SPS measure". 
7.38 According to the United States, a "conditional" request for consultations under Article 11 of 
the SPS Agreement  does not amount to an "actual" request for consultations pursuant to Article 11 of 
the SPS Agreement .208  Most importantly, the United States c ontends that it would have no way of 
knowing whether the condition had been satisfied a nd that China's request had become operative. 
7.39 Although the language in China's consultations re quest and, in particular, the reference to a 
"demonstration" that the measures in question are SPS measures, is not the most artful, the Panel, 
further to the above-mentioned jurisprudence, s hould not look at one phrase in the consultations 
request in isolation, but rather examine the cons ultations request as a whole and in light of the 
"attendant circumstances."  This means that the Panel needs to consider the cons ultations request in its 
entirety and place the SPS references in the contex t of the rest of the consultations request. 
Additionally, the Panel will consider whether the exchange of letters are part of the "attendant 
circumstances" of the consultations request. 
7.40 With respect to the rest of the consultations re quest, the Panel notes that China's consultations 
request deals with US measures affecting the im portation of poultry products from China into the 
United States.209 Additionally, in paragraph 1 of the cons ultations request, China states that it "is 
concerned that Section 727, in conjunction with the overall US regime for regulating imports of 
                                                                                                                                                                     
manifests the intention of the Uruguay Round negotiators that the provisions of the WTO Agreement and the 
Multilateral Trade Agreements included in  its Annexes 1, 2 and 3 must be read as a whole. (Appellate Body 
Report, Korea – Dairy),  para. 81). 
205 Panel Report, Korea – Alcoholic Beverages , para. 10.19. 
206 Appellate Body Report, US – Upland Cotton , para. 287. 
207 Although China, in its first written submission, refe rs to its questions to the United States and what 
actually took place during co nsultations, given the Appellate Body findings in US – Upland Cotton , we will not 
base our decision on what one party or another says occurred during consultations. 
208 United States' Preliminary Ruling Request, para. 19. 
209 China's consultations request, WT/DS392/1, opening paragraph.  WT/DS392/R 
 Page 95 
 
 
 poultry products places restrictions on the import from China of poultry products  that are inconsistent 
with the United States' WTO obligations."210 The Panel is of the view that it is reasonable to interpret 
this reference to the overall regime  for the importation of poultry products to be a reference to the 
PPIA as well as its implementing regulations, especia lly given China's reference, in the immediately 
succeeding paragraph to 9 CFR §381.196211 as one of several US regulations that cannot be 
implemented because of Section 727. There is no dispute among the parties that the PPIA and the 
regulatory regime set up pursuant to its mandate are SPS measures. 
7.41 China's consultation request, after outlining the le gal basis for its complaint with respect to 
Articles I and XI of the GATT 1994, includes, in para graphs 6 and 7, controve rsial language where it 
specifically references the SPS Agreement .  
7.42 It appears to the Panel that China was a ttempting to challenge Section 727 under the 
GATT 1994 and the Agreement on Agriculture , and, in the alternative, under the SPS Agreement  in 
the event the United States argued that Section 727 is an SPS measure within the scope of the 
SPS Agreement . It thus seems to the Panel that China wanted to ensure that the SPS Agreement  was 
within the Panel's terms of reference in such a case. Rather than being confusing, this seems 
consistent with the panel's reasoning in Korea – Commercial Vessels  that "if a complaining party 
wishes to pursue claims in respect of a gi ven measure under multiple provisions, whether 
complementarily or alternatively, not only is it permitted  by Article 6.2 of the DSU to refer to all of 
those provisions in its request for establishment, but it is required  to do so."212   The Panel is of the 
view that the same logic should also apply to consultations requests. 
7.43 Given the surrounding context, the Panel is of th e view that China's consultations request did 
"indicate" an SPS basis for its complaint, even if that basis, seen in isolation, was qualified in 
somewhat unclear conditional language.213  In that respect, it is important to note that although there 
are many similarities between Articles 4.4 and 6.2 of the DSU  and they should be interpreted in an 
harmonious way, the obligation on a Member in its consultations request is to "indicate" the legal 
basis for the complaint whereas the obligation in the panel request is to provide a "brief legal 
summary of the legal basis of the complaint sufficien t to present the problem clearly."  Therefore, an 
indication is something less than a summary suffici ent to present the problem clearly. While the Panel 
does not wish to be perceived as encouraging WTO Members to present their problems confusingly in 
their consultations request, it does seem that there is a bit more leeway in how WTO Members phrase complaints in a consultations request vis-à-vis  the clarity required in a panel request which is the final 
word on the scope of the dispute.
214 
7.44 Additionally, if we move beyond the consultati ons request itself to an examination of the 
"attendant circumstances" and include in that ex amination the exchange of letters between the 
                                                      
210 China's consultations request, WT/DS392/1, para. 1. 
211 Code of Federal Regulations, 9 Ch. III, Food Safety and Inspection Service, USDA (1-1-08 
Edition). 
212 Panel Report, Korea – Commercial Vessels, subparagraph 29 of para. 7.2. Recall our discussion 
above on the relevance of Article 6.2 jurisprudence to an understanding of similar obligations in Article 4.4. 
213 We do note that upon receipt of the United Stat es' letter, China could have filed an amended or 
supplemental consultations request which would have eliminated any doubt on the part of the United States and avoided spending time and resources on this matter. 
214 We note that China also brings up whether th e United States was "prejudiced" by the supposed 
confusion in the consultations request (China's first wr itten submission, para. 173). Although some panels and 
indeed even the Appellate Body have delved into the issue of prejudice, we note that the Appellate Body has 
also found that jurisdiction is a fundamental prerequisite for lawful panel proceedings. (Appellate Body Report, 
US – Carbon Steel, para. 127.)  Therefore it is our view that non- compliance with the various provisions that set 
forth how to establish a panel and its terms of reference cannot be overcome by a lack of prejudice to the 
respondent. WT/DS392/R 
Page 96  
 
 United States and China, China's intentions an d the United States' understanding thereof, becomes 
even clearer. 
7.45 We note that China's letter advises the United St ates that its understanding is not correct and 
goes on to say that: 
"Through its request for consultations (WT/DS392/1), China has requested 
consultations under Article 11 of the SPS Agreement to cover a contingency, namely 
the demonstration that any of the listed measures is an SPS measure. To that end, 
China will shortly provide the United Stat es with written questions requesting the 
United States to provide answers during th e consultations concerning the nature and 
status of measures identified in the cons ultation request. Thus, China has indeed 
requested, and the United States and China w ill engage in, a consultation that fully 
addresses relevant questions concerning whether any of the U.S. measures are SPS measures within the meaning of the SPS Agreement. The parties will also consult 
on the questions regarding the various claims under the SPS Agreement applicable to 
such measures, as stated in China's consultations request."
215  
7.46 As noted by the United States itself, the Appe llate Body has concluded that "consultations 
provide the parties an opportunity to define and delimit the scope of the dispute between them."216 
Accordingly, if through consultations the comp laining party obtains a better understanding of the 
operation of a challenged measure such that additi onal provisions of the covered agreements become 
relevant, it may reformulate its complaint to include these other provisions, even from covered 
agreements not mentioned in the c onsultations request, so long as the legal basis in the panel request 
may reasonably be said to have evolved from the legal basis that formed the subject of consultations.  
7.47 We also recall the reasoning of the panel in China – Publications and Audiovisual Products, 
pursuant to the Appellate Body's conclusions in Mexico – Anti-Dumping Measures on Rice,  that:  
"[I]n some circumstances, a claim based upon a WTO provision of a covered 
agreement which was not contained in the request for consultations, can nevertheless 
be considered to be within a panel's term s of reference. If through consultations the 
complaining party obtains a better unders tanding of the operation of a challenged 
measure such that additional provisions of th e covered agreements become relevant it 
may reformulate its complaint to include these other provisions so long as the legal basis in the panel request may reasonably be  said to have evolved from the legal basis 
that formed the subject of consultations.
217  
                                                      
215 China's letter of 28 April 2009. Exhibit CN-38. 
216 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 54. 
217 Panel Report, China – Publications and Audiovisual Products , para. 7.115 citin g Appellate Body 
Report, Mexico – Anti-Dumping Measures on Rice , para. 138 where it stated: 
"A complaining party may learn of additional inform ation during consultations—for example, a better 
understanding of the operation of a challenged measure—that could warrant revising the list of treaty provisions 
with which the measure is alleged to be inconsistent. Such a revision may lead to a narrowing of the complaint, or to a reformulation of the complaint that takes into account new information such that additional provisions of 
the covered agreements become relevant. The claims set out in a panel request may thus be expected to be 
shaped by, and thereby constitute a natural evolution of, the consultation process. Reading the DSU, as Mexico does, to limit the legal basis set out in the panel request to what was indicated in the request for consultations, 
would ignore an important rationale behind the requirement to hold consultations—namely, the exchange of 
information necessary to refine the contours of the dispute, which are subsequently set out in the panel request. In this light, we consider that it is not necessary that th e provisions referred to in the request for consultations be 
identical to those set out in the panel request, provided th at the 'legal basis' in the panel request may reasonably  WT/DS392/R 
 Page 97 
 
 
 7.48 It seems to us that what has happened in this case is that China merely forecasted its 
expectation of obtaining a better understanding of th e operation of the challenged measures and that 
the SPS Agreement  might be relevant in the consultations re quest rather than simply waiting to reveal 
the possibility of an SPS claim in the Panel Request. The Panel finds it difficult to sustain a reading of 
Articles 4 and 6 of the DSU whereby a complainant c ould make no reference to the possibility of an 
evolution of its claims in its cons ultations request and nevertheless have those claims included in the 
terms of reference of the panel, yet a complainant who did mention them would have them excluded.  
7.49 In light of the above, the Panel therefore concl udes, examining the consultations request as a 
whole, that China, in its Consultation Request, indicated that the SPS Agreement  would serve as the 
basis of its claims, albeit in a conditional manner.  Additionally, an examination of the attendant 
circumstances, most notably the exchange of lette rs prior to consultations taking place, supports the 
conclusion that the SPS Agreement  was indicated as a basis for China' s claims. Accordingly, the Panel 
finds that China did request consultations inter alia pursuant to Article 11 of the SPS Agreement  and 
that, therefore, China's SPS claims are within its terms of reference. 
(iv) Conclusion 
7.50 The Panel therefore disagrees with the United St ates' contention that China did not request 
consultations under the SPS Agreement  and finds that China did request consultations pursuant to 
Article 11 of the SPS Agreement, indicated the various provisions of  that Agreement that were the 
basis for its claims, and that, therefore, China' s SPS claims are within its terms of reference. 
2. Whether the Panel may rule on an expired measure 
(a) Background 
7.51 The United States has contended, and China agreed218, that Section 727 expired on 
30 September 2009, i.e. two days after the deadline for China's first written submission. This raises 
the question of whether the Panel should make findings  on a measure that is no longer in force. We 
note that the United States has not requested the Panel not to make findings on an expired measure.219  
Nevertheless, the Panel believes that before going ahead and examining the WTO consistency of 
Section 727 pursuant to China's various claims, we need to decide whether we may make rulings and 
recommendations on a measure that is no longer in force. 
(b) Arguments of the parties 
7.52 The United States alleges that Section 727 has expired220 and thus has been supplanted by 
Section 743.221  The United States further argues that any funding restriction imposed by Section 743 
has been lifted as a consequence of the Secretar y of Agriculture's issuance of a letter to the 
US Congress on 12 November 2009.222  As indicated above, the United States has not requested the 
Panel not to rule on Section 727.  
                                                                                                                                                                     
be said to have evolved from the 'legal basis' that formed the subject of consultations. In other words, the 
addition of provisions must not have the effect of changing the essence of the complaint." 
218 United States' first written submission, para. 2; China's response to Panel question No. 11. 
219 See United States first written submission, para. 93. The United States argues that the Panel only 
needs to consider China's claims under Article XI:1 of the GATT 1994 and any needed defence under 
Article XX(b) in order to resolve this dispute. 
220 United States' first written submission, para. 62. 
221 United States' first written submission, para. 68. 
222 United States' first written submission, para. 74. The letter can be found in Exhibit US-45. WT/DS392/R 
Page 98  
 
 7.53 China  does not contest that Section 727 is no longer in force. For China, though, the 
expiration of Section 727 has no bearing on the Panel' s terms of reference, as Section 727 expired 
after the Panel was established a nd its terms of reference were set. China contends that measures 
expiring after the establishment of a panel or during the panel process have repeatedly been found by 
panels and the Appellate Body to be within a panel's jurisdiction. As an example, China argues, in 
Indonesia – Autos, the panel rejected Indonesia's argument th at the National Car program was a moot 
issue because it had expired. In doing so, China explains, the panel referenced several GATT and 
WTO disputes where measures included in the term s of reference were terminated after the 
commencement of the panel proceedings, and where pane ls nevertheless went on to make findings in 
respect of those measures.
223  China submits that this approach  has been followed in subsequent 
disputes, such as EC – Selected Customs Matters and US – Upland Cotton. China stresses that, in US 
– Upland Cotton , the Appellate Body noted that "GATT and WTO panels have frequently made 
findings with respect to measures withdrawn after the establishment of the panel [and] [i]n none of 
these cases has a panel or the Appellate Body  premised its decision on the view that, a priori , an 
expired measure could not be within  a panel's terms of reference".224   
(c) Analysis by the Panel 
7.54 The Panel will therefore determine whether it should rule on an expired measure. The 
Appellate Body explained in EC – Bananas III  (Article 21.5 – Ecuador II) , "once a panel has been 
established and the terms of reference for the panel have been set, the panel has the competence to 
make findings with respect to the measures covered by its terms of reference."  The Appellate Body 
thus concluded that it is "within the discretion of the panel to decide how it takes into account … a 
repeal of the measure at issue."225  It is therefore within our discretion to decide whether to make 
findings on Section 727. 
7.55 We note that, in the past, panels have decide d to make rulings on expired measures where the 
respondent Member had not conceded the WTO in consistency of the measure and the repealed 
measure could be easily re-imposed.226  In our view, this is precisely the case of Section 727 since the 
United States does not concede the alleged WTO inco nsistency of Section 727 and the appropriations 
legislation in the United States is of an annual natu re. As explained in Sec tion II.D above, Section 727 
reiterated the language of a previous annual ap propriations provision with identical wording, 
Section 733, and it has now expired and a new provis ion, Section 743, has been adopted to address 
FSIS access to appropriated funds for activities regard ing China's equivalence application. Although 
we acknowledge that Section 743 does not share the same language as Section 727 and its 
predecessor, Section 733, we consider that if we we re to refuse to make findings on the expired 
measure – Section 727 – the Panel might be depriv ing China of any meaningful review of the 
consistency of the United States' actions with its  WTO obligations, while allowing the repetition of 
the potentially WTO-inconsistent conduct. This would certainly call to mind the "moving target" 
scenario which the Appellate Body in Chile – Price Band System  stated that a complainant should not 
have to face. 
7.56 The Panel will thus proceed to make findings on the WTO consistency of Section 727 which 
is within its terms of reference. Nevertheless, th e Panel recognizes that it would not be appropriate to 
                                                      
223 China refers to the Panel Report, Indonesia – Autos , para. 14.9, citing Panel Report, US – Wool 
Shirts and Blouses  and GATT disputes EEC – Dessert Apples , EEC – Apples (US) , EEC – Apples I (Chile), 
US – Canadian Tuna , EEC – Animal Feed Proteins  and US –  Section 337 . China's response to Panel question 
No. 11. 
224 China refers to the Appellate Body Report, US – Upland Cotton , footnote 214. China's responses to 
Panel question No. 11. 
225 Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II) , para. 270. 
226 Panel Report, India – Additional Import Duties , paras. 7.69-7.70.  WT/DS392/R 
 Page 99 
 
 
 make recommendations pursuant to Article 19 of the DSU  with respect to a WTO-inconsistent 
repealed measure that has ceased to have legal effect.227 Indeed, if the Panel finds that Section 727 
was inconsistent with any of the provisions of the co vered agreements within it s terms of reference, it 
would be pointless to ask the United States to bri ng Section 727 into conformity with those covered 
agreements since the measure is no longer in force.  
(d) Conclusion 
7.57 The Panel therefore concludes that it will pro ceed to make findings on the WTO-consistency 
of Section 727 which is within  its terms of reference.  
3. European Union's request for enhanced third party rights 
7.58 In Section V of its third-party submission, the European Union requested the Panel to amend 
its working procedures and provide enhanced thir d-party rights to all third parties to these 
proceedings. The Panel consulted the parties whic h were both against the Panel granting such a 
request.228  The Panel also consulted the third parties wh ich – except for Korea – were all in favour of 
the European Union's request.229  On 22 January 2010, the Panel informed the European Union of the 
following decision: 
"Further to the European Union's request for enhanced third party rights and after 
having heard the parties' views, the Panel c onsiders that the views and interests of the 
third parties have been fully taken into  account during the Panel proceedings. The 
Panel does not believe that the current proceedings demand that the panel deviate from the rights embodied in Article 10.2 of the DSU. Accordingly, the Panel has decided not to grant the European Union's request for enhanced third party rights." 
B. O
RDER OF ANALYSIS OF CHINA 'S CLAIMS AND THE UNITED STATES ' DEFENCE  
7.59 China has put forward claims under Articles I a nd XI of the GATT 1994, Article 4.2 of the 
Agreement on Agriculture  and, Articles 2.3, 5.5, 5.1, 2.2, 5.6 and 8 of the SPS Agreement. 230 The 
United States has made an affirmative defence under Article XX(b) of the GATT 1994.231  T h e  
United States invokes this provision as a defence of  a violation of Articles I:1 and XI of the 
GATT 1994.232   
7.60 Because the Panel has found that all of China' s claims are within our terms of reference233, we 
need to decide the appropriate order of analysis of China's claims and the United States' defence. 
7.61 We note that China has not told the Panel its preferred order of analysis. It has however 
drawn our attention to the ruling of the panel in EC – Hormones , where it was said that the 
                                                      
227 Appellate Body Report, US – Certain EC Products, para. 81; Appellate Body Report, US – Upland 
Cotton , para. 272; and Appellate Body Report, EC – Bananas III (Article 21.5 – Ecuador II), para. 271. 
228 See parties responses to Panel question No. 1. Both China and the United States disagreed with the 
European Union's request for enhanced third party rights. 
229 See third parties responses to Panel question No. 1. All of the third parties to this dispute agreed 
with the request by the European Union. 
230 See China's Panel Request, WT/DS392/2. 
231 We note that the United States also  argues that Section 727 satisfies the exception in the footnote to 
Article 4.2 of the Agreement on Agriculture  because it is justified under Ar ticle XX(b) of the GATT 1994. See 
United States' first written submission, para. 105. 
232 United States' first written submission, paras. 99, 102-103. 
233 See Section VII.A.1(b)(iv). WT/DS392/R 
Page 100  
 
 SPS Agreement  provides specific "obligations whic h are not already imposed by GATT",
234 and 
which are "additional" to the requirements of Article XX of GATT.235 For China, there is no 
presumption of consistency with the SPS Agreement for measures that are found to be consistent with 
Article XX(b) of the GATT 1994. On the contrary, China argues that measures such as Section 727 
must comply with the requirements in both the GATT and the SPS Agreement . Therefore, in China's 
view, even if the United States were successful in demonstrating that Secti on 727 "falls squarely 
within the Article XX(b) exception"236, this would not be sufficient defence against China's 
SPS claims.237 
7.62 In response to China's arguments, the United States  submits that the Panel has the discretion 
with regard to how it structures its analysis and that  it is for the Panel to decide whether to consider 
the GATT 1994 claims before the SPS claims or vice versa . For the United States, this is not a 
situation where either the WTO Agreement  requires or the Appellate Body has found that there must 
be a particular order of analysis.238  The United States argues that although there is no general rule 
requiring that GATT 1994 claims be analysed prior to SPS claims, the appropriate order of analysis in 
this case is to start with Article  XI because China claimed that Section 727 was a budgetary measure 
and that, in any case, "China's SPS arguments are primarily a rephrasing of its fundamental argument 
under GATT 1994 Article XX – namely, that Sec tion 727 was not 'necessary' because FSIS 
procedures were sufficient to meet the U.S. goa l of ensuring the safety of poultry imports from 
China".239  
7.63 The Panel notes that this is not a case of c onflict between provisions of different covered 
agreements240; but rather of deciding in which order we are going to examine the various provisions at 
issue. In doing so, the panel in India – Autos  explained that it is important to first consider if a 
particular order is compelled by principles of valid interpretative methodology, which, if not 
followed, might constitute an error of law.241  The panel also pointed out that the order selected for 
examination of the claims may also have an im pact on the potential to apply judicial economy.242 
7.64 We recall that, in EC – Bananas III , the Appellate Body enunciated the test that should be 
applied in order to decide the order of analysis where two or more provisions from different covered 
Agreements appear  a priori  to apply to the measure in question. According to the Appellate Body, the 
provision from the Agreement that "deals specifically , and in detail" with the measures at issue should 
be analysed first.243   
                                                      
234 Panel Report, EC – Hormones , para. 8.40. 
235 Panel Report, EC – Hormones , para. 8.38. 
236 China refers to the United States' second written submission, para. 124. 
237 China's opening oral statemen t at the second substantive meeting of the Panel, para. 50. 
238 United States' response to Panel question No. 88, para. 7. 
239 United States' response to Panel question No. 88, para. 9. 
240 As put by the panel in Turkey – Textiles , "a conflict of law-making treaties arises only where 
simultaneous compliance with the obligations of different instruments is impossible. ... There is no conflict if 
the obligations of one instrument are stricter than, but not incompatible with, those of another, or if it is possible 
to comply with the obligations of one instrument by refraining from exercising a privilege or discretion accorded by another."  Panel Report, Turkey – Textiles , para. 9.92. In the WTO context, conflict may, for 
example, arise between obligations contained in GATT 1994 and obligations contained in agreements listed in 
Annex 1A, such as the SPS Agreement , "where those obligations are mutua lly exclusive in the sense that a 
Member cannot comply with both obligations at the same time", or "where a rule in one agreement prohibits 
what a rule in another agreement explicitly permits."  Panel Report, EC – Bananas III , para. 7.159. 
241 Panel Report, India – Autos , para. 7.154. 
242 Panel Report, India – Autos , para. 7.161. 
243 Appellate Body Report, EC – Bananas III , para. 204.  WT/DS392/R 
 Page 101 
 
 
 7.65 In EC – Hormones , where claims under both the GATT 1994 and the SPS Agreement  were 
raised by the complainant, the panel, in a finding not  reviewed by the Appellate Body, considered that 
the SPS Agreement was to be addressed first because it "specifically addresses the type of measure in 
dispute".244 This approach was also followed by the panel in Australia – Salmon.245 
7.66 The order of analysis of the claims would therefore depend on whether the Panel finds that 
Section 727 is an SPS measure. If so, the SPS Agreement  would be lex specialis  as it "deal[s] 
specifically, and in detail" with the type of measure at issue, i.e. an SPS measure. Therefore, if the 
Panel finds that Section 727 is an SPS measure and we  were to follow the order of analysis as set out 
in EC – Hormones  and Australia – Salmon , we should start by analysing China's SPS claims. 
7.67 The Panel draws further guidance from Article 2.4 of the SPS Agreement  which provides that 
SPS measures which conform to the provisions of the SPS Agreement shall be presumed to be in 
accordance with the provisions of the GATT 1994 wh ich relate to the use of SPS measures, in 
particular the provisions of Article XX(b).246 Therefore, if the Panel were to find that Section 727 is 
an SPS measure, a finding that it is not inconsistent with the SPS Agreement , would yield a 
presumption that Section 727 is in accordance with Article XX(b) of the GATT 1994. Accordingly, 
the Panel would not need to consider the GATT clai ms because the measure would be presumed to be 
consistent with Article XX(b). However, we agr ee with China in that there is no presumption of 
consistency with the SPS Agreement for measures that are found to be consistent with Article XX(b) 
of the GATT 1994. Hence, if the Panel were to  start with the claims under GATT 1994 and find 
Section 727 to be consistent with  that Agreement, then the Panel would still have to look at the 
SPS claims, because a measure consistent with th e GATT 1994 is not presumed necessarily to be 
consistent with the SPS Agreement .  
7.68 The Panel will therefore commence by examini ng whether Section 727 is an SPS measure 
within the scope of the SPS Agreement . If we find that Section 727 is indeed an SPS measure, we will 
proceed to examine China's claims under the SPS Agreement, by first addressing the arguments of the 
United States that China has rais ed claims under provisions of the SPS Agreement  that are not 
applicable to Section 727.  
7.69 If we find that Section 727 is inconsiste nt with one or more provisions of the SPS Agreement  
within our terms of reference, this  Panel could conclude that it has provided a positive solution to this 
dispute and therefore finalize its legal analysis with out entering into an examination of China's claims 
under Articles I:1 and XI:1 of the GATT 1994, the Un ited States' defence pursuant to Article XX(b) 
of that same Agreement and China's claim under Article 4.2 of the Agreement on Agriculture . 
However, given that the United States has focu ssed its defence solely on the claims under the 
GATT 1994 and the Agreement on Agriculture by invoking the general exception under 
Article XX(b) of the GATT 1994, the Panel finds it appropriate for due process reasons to go forward 
with an analysis of China's claims under those Agre ements and evaluate the United States' defence on 
its own merit.  
                                                      
244 Panel Report, EC – Hormones , paras. 8.41-8.42. 
245 Panel Report, Australia – Salmon , para. 8.39. See also  Panel Report, EC – Sardines , para. 7.16, in 
context of the TBT Agreement.  
246 Panel Report, US – Continued Suspension, para. 7.327 footnote 471. The panel stated that the 
reference to presumption in Article 2.4 of the SPS Agreement  is to a legal presumption that is intended to 
address potentially conflicting interp retations between two provisions. WT/DS392/R 
Page 102  
 
 C. W
HETHER SECTION 727 IS AN SPS MEASURE WITHIN THE SCOPE OF THE SPS A GREEMENT  
1. Background 
7.70 As explained in Section VII.B above, a crucial i ssue in this dispute is whether Section 727 is 
an SPS measure. Indeed, determining whether Sec tion 727 is an SPS measure will not only dictate 
whether the SPS Agreement  is applicable but also, as we explained, in which order we will analyse 
China's claims.  
7.71 China's characterization of Section 727 as an SPS measure has, during the proceedings, 
evolved from one extreme to the other. Following the language in both its consultations and Panel 
requests, China had argued in its first written submissi on that based on its text and legislative context, 
Section 727 was but a budgetary measure which resulted in the banning of imports of poultry 
products from China, and thus would not appear to be an SPS measure.247 Therefore, China's 
SPS claims were conditionally made to the extent  that Section 727 may be considered to be an 
SPS measure within the meaning of the SPS Agreement .248   
7.72 During the first substantive meeting, China ra dically changed its position and argued for the 
first time that Section 727 is an SPS measure. China justified its new approach on the assertion by the 
United States that the policy objective for enac ting Section 727 was the protection of human and 
animal life and health from the risk posed by the importation of poultry products from China.249   
7.73 The United States first notes that the burden is on China, in establishing its claim, to prove 
that Section 727 is an SPS measure. Further, the Unite d States argues that the mere fact that a measure 
implicates food safety does not dictate whether a measure is covered by the SPS Agreement . 
Additionally, for the United States, even if a measu re is covered by the definition of SPS measures in 
Annex A, it does not necessarily follow th at all of the obligations in the SPS Agreement  apply to that 
particular measure.250   
7.74 The Panel will therefore examin e whether Section 727 is an SPS measure within the scope of 
the SPS Agreement .  
2. Arguments of the parties 
7.75 After having initially argued that Section 727 was only a budgetary measure as opposed to an 
SPS measure251, China  changed its position and argued at the first substantive meeting that the 
United States had demonstrated that Section 727 is an SPS measure.252   
7.76 Concerning the definition of an SPS measure, Ch ina argues that SPS measures are defined in 
Annex A(1) of the SPS Agreement  based on their purpose and legal form.253  In its view, this 
conclusion is reached when interpreting Annex A(1)  on the basis of the Vienna Convention on the 
                                                      
247 China's first written submission, para. 116. 
248 China's first written submission, para. 117. 
249 Specifically, China said that: "[b] ecause the United States has stated  repeatedly in its first written 
submission that the purpose of Section 727 is the protection of human life and health, there is no doubt that the United States has demonstrated that Section 727 is an SPS measure as defined by the SPS Agreement" (footnote 
omitted). China's opening oral statement at the first substantive meeting of the Panel, para. 37, citing the 
United States' first written submission at paras. 119, 121, 122. 
250 United States' first oral statement, para. 9, citing the Panel Report, EC – Approval and Marketing of 
Biotech Products at paras . 7.1326–7.1448 . 
251 China's first written submission, para. 116. 
252 China's opening oral statemen t at the first substantive meeting of the Panel, para. 39. 
253 China's opening oral statemen t at the first substantive meeting of the Panel, para. 38.  WT/DS392/R 
 Page 103 
 
 
 Law of the Treaties ("VCLT").254  According to China, "SPS measures are defined in Annex A(1) as 
measures enacted for one of the purposes enumerated in paragraphs (a) through (d) – including the 
protection of 'human or animal life or health with in the territory of the Member from risks arising 
from additives, contaminants, toxins or disease causi ng organisms in food, beverages or feedstuffs"255, 
"and the 'form' of which are 'laws, decrees,  regulations, requirements or procedures."'256 
7.77 China refers to the statements made by the Un ited States in its first written submission that 
"Section 727 was enacted with the policy objective of protecting against the risk to human and animal 
life and health posed by the importation of poultry products from China"257, and to the Joint 
Explanatory Statement accompanying Section 727 wh ich in its view "defines the alleged risk to 
human health addressed by the measure in the broadest of terms, namely "concerns about 
contaminated foods" originating in China.258  China points out that, in the United States' first written 
submission, the United States refers to the risk posed by Salmonella, Listeria, and Campylobacter to illustrate the inherent danger of consuming poultry that is not pr oduced under sanitary conditions or 
thoroughly inspected for contaminants and the FSI S audit procedures that were suspended due to 
Sections 727 include rigorous assessment of the tes ting methods for Salmonella, Listeria, and E. coli 
in production facilities.
259  China argues that "[b]ased on the description of the purpose of Section 727 
in the Explanatory Statement and the representa tions made in the United States' first written 
submission, Section 727 clearly falls within the conf ines of the definition of an SPS measure, as stated 
in Annex A(1)(b)."260  Further, it notes that the form of Section 727 – a legal provision – clearly falls 
within the illustrative list in Annex A(1). China conc ludes by stating that because Section 727 affects 
international trade, it is subject to the SPS Agreement  under Article 1.1.261 
7.78 China notes that the United States has never de nied, rebutted or otherwise responded to the 
Panel's question on whether the United States considers that Section 727 satisfies the definition of an SPS measure in Annex A of the SPS Agreement .
262 
7.79 The United States  notes that China, as the complaining party, bears the burden of proving 
that Section 727 meets the definition in the SPS Agreement of an SPS measure and of explaining how 
and why each SPS provision cited applies to Section 7 27 including a consideration of the nature of the 
measure.263  Moreover, China also has the burden of explaining precisely what has changed from its 
first written submission where it claimed that Sectio n 727 was simply a "budgetary" measure to  the 
first substantive meeting when China ar gued that Section 727 is an SPS measure.264  According to the 
United States, China has not met its burden to pr ove how the measure meets each element of the 
definition in the SPS Agreement .265   
                                                      
254 China's response to Panel question No. 43. 
255 China's response to Panel question No. 42, para. 97 citing Annex A(1)(b) of the SPS Agreement . 
256 China's response to Panel question No. 42. 
257 China's opening oral statement at the first substan tive meeting of the Panel, para. 39 referring to the 
United States first written submission, paras. 199, 121, 122. 
258 China's opening oral statement at the first substan tive meeting of the Panel, para. 40, citing the Joint 
Explanatory Statement of the Agriculture Appropriations Act  2009 (Exhibit CN-33). 
259 China's response to Panel question No. 96, para.2 1 citing the Final Report of an Initial Equivalence 
Audit Covering China's Poultry Inspection p. 11 (Exhibit CN-13). 
260 China's opening oral statemen t at the first substantive meeting of the Panel, para. 42. 
261 China's opening oral statemen t at the first substantive meeting of the Panel, para. 42. 
262 China's comments on United States' response to Panel question No. 95, paras. 22 and 25. 
263 United States' response to Panel question No. 95. 
264 United States' response to Panel question No. 93. 
265 United States' second written submission, para. 86. WT/DS392/R 
Page 104  
 
 3. Analysis by the Panel 
7.80 The Panel will thus examine whether the measure at issue, i.e. Section 727, is an SPS measure 
within the scope of the SPS Agreement . We will first review the provisions of the SPS Agreement  
setting forth what an SPS measure is and how they ha ve been interpreted by panels and the Appellate 
Body. We will then look into whether Section 727 fa lls within the definition of an SPS measure under 
the SPS Agreement . In doing so, we acknowledge that it is China's burden to prove that Section 727 is 
indeed an SPS measure.  
(a) The concept of SPS measure under the SPS Agreement  
7.81 Article 1 of the SPS Agreement  provides for the scope of application of the Agreement as 
follows: 
"1. This Agreement applies to all san itary and phytosanitary measures which 
may, directly or indirectly, affect inte rnational trade. Such measures shall be 
developed and applied in accordance with the provisions of this Agreement. 
2. For the purposes of this Agreement,  the definitions provided in Annex A 
shall apply."   
7.82 Therefore, there are two conditions for the application of the SPS Agreement  to a given 
measure; namely, (i) the measure must be an  SPS measure as defined in Annex A of the 
SPS Agreement , and (ii) the measure has to directly or indir ectly affect international trade. We turn to 
examine these two conditions. 
(i) Definition of SPS measures 
7.83 Annex A of the SPS Agreement defines SPS measures in the following manner:  
"1. Sanitary or phytosanitary measure  – Any measure applied:  
... (b) to protect human or animal life or he alth within the territory of the Member 
from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs;  
...  
Sanitary or phytosanitary measures include all relevant laws, decrees, regulations, 
requirements and procedures including, inter alia , end product criteria; processes and 
production methods; testing, inspection, certification and approval procedures; 
quarantine treatments including relevant requi rements associated with the transport of 
animals or plants, or with the materials necessary for their survival during transport; 
provisions on relevant statistical methods , sampling procedures and methods of risk 
assessment; and packaging and labelling re quirements directly related to food 
safety."
266   
                                                      
266 We note that Annex A(1)(a) defines as an SPS measure, any measure taken to protect animal or 
plant life or health from the establishment or spread of pests, diseases, disease-carrying organisms, or disease-causing organisms  and that Annex A( 1)(c) defines as an SPS measure, any measure taken to protect human life 
or health from risks arising from diseas es carried by animals. The United Stat es has referred in its argumentation  WT/DS392/R 
 Page 105 
 
 
 7.84 The Panel notes that there have been six comple ted disputes, to date, which have dealt with 
SPS issues.267  In all of these cases, with the exception of EC – Approval and Marketing of Biotech 
Products , determining whether the measure at issue is  an SPS measure has been straight forward.268   
7.85 The first dispute where the panel examined th e definition of an SPS measure in depth was 
EC – Approval and Marketing of Biotech Products. In that case, the panel examined whether various 
EC actions constituted SPS meas ures that would fall under the SPS Agreement . In particular, the panel 
looked at the definition of an SPS measure set out in  Annex A(1) and explained that in determining 
whether a measure is an SPS measure, regard must be had to elements such as the purpose of the 
measure, its legal form and its nature. The panel considered that the purpose element is addressed in 
Annex A(1)(a) through (d) ("any measure applied to"); the form element is refe rred to in the second 
paragraph of Annex A(1) ("laws, decrees, regulati ons") and the nature of the measure is addressed by 
the second paragraph of Annex A(1)  "requirements and procedures".269  The panel thus took the 
phrase "laws, decrees, regulations, requirements a nd procedures including ...," and divided it into two 
components:  "Laws, decrees and regulations," it said, referred to the "form" of the measure; and "requirements and procedures" referred to its "natur e". The panel found that one of the measures at 
issue, a moratorium
270, did not have the "nature" of an SPS measure – because it did not provide for 
requirements or procedures – and therefore could not be considered an SPS measure for purposes of 
Annex A(1) of the SPS Agreement .271 
7.86 The panels in US/Canada – Continued Suspension  followed the approach of the panel in EC – 
Approval and Marketing of Biotech Products  to the extent that they indicated that they were 
examining the purpose, form and nature of the meas ure but did not examine the meaning of the term 
"nature" .272 The panels first determined whether the purpose of the measure fell within 
Annex A(1)(b), then they considered whether the measure fell within "laws, decrees and regulations 
as well as requirements and procedures'."273 Thus, the panels found that the measure at issue was 
adopted for the purpose of protecting human life from  contaminants in food and took the form and 
nature contemplated in the second paragraph of Annex A, hence an SPS measure pursuant 
Annex A(1)(b) of the SPS Agreement .274 
                                                                                                                                                                     
to the purpose of the measure being to also protect from Avian influen za. However, since China has only 
referred to the types of measures desc ribed in Annex A(1)(b) in its argumentation, we will not address the types 
of measures described in Annex A(1)(a) and (c) in detail. 
267 EC – Hormones , Australia – Salmon , Japan – Agricultural Products II , Japan – Apples , EC – 
Approval and Marketing of Biotech Product and US/Canada – Continued Suspension .   We note that for some 
of these disputes, there is more than one complainant. 
268 Panel Report, EC – Hormones, para. 8.22 (where the panel saw no need to further examine if the 
measures were "applied to protect human ... life or hea lth" because both parties agreed that the EC measures 
were "sanitary measures"); Panel Report, Australia – Salmon , para. 8.30 (noting that the parties agreed that the 
measures fell under the SPS Agreement and that the main  issue was whether they were applied to serve the 
purposes outlined in either Annex A(1)(a) or Annex A(1)(b)); Panel Report, Japan – Agricultural Products II , 
para. 8.12 (where the panel noted that the parties agreed  that the measures at issue were SPS measures); Panel 
Report, Japan – Apples , para. 8.9 (where the panel noted that the par ties agreed that the measures at issue were 
SPS measures).   
269 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.149. 
270 The so-called moratorium consisted of a decision taken by the EU and its member States to delay 
the final approval decisions for the mark eting of biotech products. Panel Report, EC – Approval and Marketing 
of Biotech Products,  para. 7.1355. 
271 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1334. 
272 Panel Report, US – Continued Suspension , para. 7.429. We note that the panel in that case was 
examining a measure that was the su ccessor to the one challenged in the EC – Hormones case and it was not 
disputed that it wa s an SPS measure. 
273 Panel Report, US – Continued Suspension , para. 7.433. 
274 Panel Report, US – Continued Suspension , para. 7.434. WT/DS392/R 
Page 106  
 
 (ii) Directly or indirectly affect[s] international trade 
7.87 Even if a measure falls within the definiti on of an SPS measure in Annex A(1) of the 
SPS Agreement , further to Article 1.1 of the SPS Agreement,  such measure still needs to be a measure 
that directly or indirectly affect[s] internati onal trade to be covered by the disciplines of the 
SPS Agreement .  
7.88 If we look at the previous SPS disputes, in Australia – Salmon , neither of the parties to the 
dispute contested that the measure at issue affected  international trade. The panel indicated that it 
agreed it affected international trade.
275 In EC – Hormones , the panel agreed with the parties that the 
measure at issue affected international trade, and added that it could not be contested that an import 
ban affects international trade.276   
7.89 The panel in EC – Approval and Marketing of Biotech Products  stated that, consistent with 
panels interpreting other pr ovisions of the WTO agreement, it determined that  "it is not necessary to 
demonstrate that an SPS measure has an actual effect  on trade" (emphasis added). It further noted that 
Article 1.1 of the SPS Agreement merely requires that an SPS measure "may, directly or indirectly, 
affect international trade."277 The panel thus concluded that measu res which caused delays or imposed 
information and documentation requirements on applicants affected international trade.278 
(b) Whether Section 727 is an SPS measure under the SPS Agreement  
7.90 The Panel therefore needs to determine whether S ection 727: (i) falls within the definition of 
Annex A(1) of the SPS Agreement  and (ii) affects directly or indirectly international trade. We begin 
by recalling the measure at issue. We will then an alyse whether Section 727 is an SPS measure within 
the definition of Annex A(1) of the SPS Agreement , and if so, turn to see whether it directly or 
indirectly affects international trade. 
(i) The measure at issue 
7.91 The Panel recalls that Section 727 was enacted on 11 March 2009279 and that it expired on 30 
September 2009.280  We further recall that the AAA of 2009 , in which Section 727 appears, is a 
regular appropriations bill that provides the necessary funding for the FSIS to carry out, inter alia , the 
functions foreseen by the PPIA.281   
7.92 Section 727 reads as follows: 
"None of the funds made available in this Act may be used to establish or implement 
a rule allowing poultry products to be imported into the United States from the People's Republic of China."
282 
                                                      
275 Panel Report, Australia – Salmon , para. 8.30. 
276 Panel Report, EC – Hormones , para. 8.23. 
277 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.435. We note that the 
panels in Japan – Apples  and Japan – Agricultural Products II  and US/Canada – Continued Suspension , did not 
assess whether the measures at issue directly or indirectly affected international trade. 
278 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.435. 
279 China's response to Panel question No. 19. 
280 United States' first written submission, para. 62. Th e Panel's ability to make findings on an expired 
measure, and the wisdom of doing so, is  analysed in Section VII.A.2 above. 
281 Omnibus Appropriations Act of 2009, p. 12. 
282 Section 727, Agriculture Appropriations Act 2009 (Exhibit CN-1).  WT/DS392/R 
 Page 107 
 
 
 7.93 We recall that the AAA of 2009 was accompanie d by a Joint Explanatory Statement (JES) 
which explains why the Congress restricted the funds  for establishing or implementing rules allowing 
the import of poultry products from China. The JES provides the following: 
"There remain very serious concerns about contaminated foods from China and 
therefore the bill retains language prohibiti ng FSIS from using funds to more forward 
with rules that would allow for the importation of poultry products from China into 
the U.S. It is noted that China has enacted  revisions to its food safety laws. USDA is 
urged to submit a report to the Committees on the implications of those changes on 
the safety of imported poultry products from China within one year. The Department 
is also directed to submit a plan for act ion to the Committees to guarantee the safety 
of poultry products from China. Such plan should include the systematic audit of 
inspection systems, and audits of all pou ltry and slaughter facilities that China would 
certify to export to the U.S. The plan also should include the systemic audit of laboratories and other control operations, expanded port-of-entry inspection, and 
creation of an information sharing progr am with other major countries importing 
poultry products from China that have conduc ted audits and plant inspections among 
other actions. This plan should be made  public on the Food Safety and Inspection 
Service web site upon its completion."
283 
(ii) Whether Section 727 falls within the definition of Annex A(1) 
7.94 The Panel will thus consider whet her Section 727 falls within th e definition of Annex A(1) of 
the SPS Agreement.  We recall that the panel in EC – Approval and Marketing of Biotech Products , 
later followed by the panels in US/Canada – Continued Suspension , explained that, in determining 
whether a measure is an SPS measure within  the definition in Annex A(1) of the SPS Agreement , 
regard must be had to elements such as the purpo se of the measure, its legal form and its nature. The 
panel in EC – Approval and Marketing of Biotech Products  considered that the purpose element is 
addressed in Annex A(1)(a) through (d) ('any measure a pplied to'); the form element is referred to in 
the second paragraph of Annex A(1) ('laws, decrees, regulations') and the nature of the measure is 
addressed by the second paragraph of Anne x A(1) "requirements and procedures".284 
7.95 We have asked the parties for their views on whether the Panel should follow the above three-
pronged test elaborated by the panel in EC – Approval and Marketing of Biotech Products.285  The 
parties have opposing views; while China wants us not to follow the test instituted by the panel in EC 
– Approval and Marketing of Biotech Products , the United States requests that we do so. For China, 
interpreting the definition of Annex A(1)(b) in light of the rules in the VCLT, SPS measures are 
defined on the basis of their purpose and legal form but  claims that the third element, "nature", is not 
                                                      
283 Joint Explanatory Statement, Division A of AAA of 2009, p. 82. (Exhibit CN-33). 
284 The panel in EC – Approval and Marketing of Biotech Products reasoned as follows: 
"Annex A(1) indicates that for the purposes of de termining whether a particular measure constitutes an 
'SPS measure' regard must be had to such elements as th e purpose of the measure, its legal form and its nature. 
The purpose element is addressed in Annex A(1)(a) through (d) ('any measure applied to'). The form element is 
referred to in the second paragraph of Annex A(1) ('laws, decrees, regulations').  Finally, the nature of the 
measures qualifying as SPS measures is also addressed in the second paragraph of Annex A(1) ('requirements 
and procedures, including, inter alia , end product criteria; processes and production methods; testing, 
inspection, certification and approval procedures; [etc.]')." 
Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.149.  See also para. 7.1334. 
285 The question posed by the Panel was the following:  "The panel in EC – Approval and Marketing of 
Biotech Products explained that in determining whether a measure is an SPS measure, regard must be had to 
such elements as the purpose  of the measure, its legal form  and its nature . This approach was followed by the 
panel in US – Continued Suspension. Should the Panel follow the same ap proach?  Please elaborate."  Panel 
question No. 43. WT/DS392/R 
Page 108  
 
 mentioned in the definition. The United States, how ever, argues that it is essential for the Panel to 
review carefully all aspects of a measure, including it s nature, purpose and form, in order to determine 
how, if at all, a food safety measure fits under any particular provision of the SPS Agreement .
286  The 
United States, however, did not elaborate on how the nature of the measure should be determined, or 
how the reasoning of the panel in EC – Approval and Marketing of Biotech Products applies to the 
facts of this case.  
7.96 The Panel must therefore decide which approach  to follow; i.e. look into the purpose, form 
and nature of Section 727, or just into the purpose and form.  
7.97 We note that the text of Annex A(1) does not mention the term "nature" but neither does it 
mention the terms "purpose" and "form" . This does no t mean that an analysis of the ordinary meaning 
of the wording of Annex A(1) in its context and in lig ht of its object and purpos e, would not lead us to 
examining both the purpose and form of Section 727 in order to determine whether it is an 
SPS measure.  
7.98 We note that the first part of Annex A(1) (a) to (d) refers to an SPS measure as "any measure 
applied ... to protect ... to prevent". Both parties  a nd the Panel agree that this language refers to the 
"purpose" of a measure.  
7.99 The second part of Annex A(1), after having enunciated the possible purposes for which an 
SPS measure could be applied, goes on to provide a list of the types of SPS measures. It reads "[SPS] 
measures include all relevant laws, decrees, regulations, requirements and procedures including, 
inter alia ... " This wording is followed by a list of  possible types of SPS measures such as: 
"[E]nd product criteria; process and pro duction methods; testing, inspection, 
certification and approval procedures; qua rantine treatments including relevant 
requirements associated with the transport of animals or plants, or with the materials 
necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods  of risk assessment; and packaging 
labelling requirements directly related to food safety."   
7.100  The Panel has carefully examined the panel's findings in EC – Approval and Marketing of 
Biotech Products  as regards the legal basis for distinction of "form" and "nature" and has difficulty 
with following the reasoning. The rationale for di viding the phrase "laws, decrees, regulations, 
requirements and procedures including ...," into "form" a nd "nature" is not clear to us as the panel did 
not elaborate on this point. The panel did not ex plain how "requirements and procedures" were 
somehow fundamentally different from "laws, de crees, regulations" or why it believed that all 
SPS measures somehow have the nature of a "require ment" or "procedure". If we examine the text of 
Annex A(1), we note that there is no such separati on and a plain reading might lead one to believe 
that "requirements and procedures" are also descr iptions of the possible types or "forms" of an 
SPS measure while the substantive descriptions following "including inter alia " are just illustrative 
examples of the types of SPS measures Members have imposed.  
7.101  While we do not see the examination of whether a particular measure is an SPS measure as a 
rigid three-part test, as seems to have been adopted by the panel in EC – Approval and Marketing of 
Biotech Products, we do agree that the Panel is to review car efully all aspects of a measure in order to 
determine whether it is an SPS measure. In our view, th e nature of a measure is an intrinsic element of 
its form. Therefore, reading the second part of Annex A(1) as a whole, means that an examination of whether a measure is of the type set forth in A nnex A(1) will encompass an holistic examination of 
the measure, including, both its form and nature.  
                                                     
 
286 United States' response to Panel question No. 43.  WT/DS392/R 
 Page 109 
 
 
 7.102  We will therefore examine whether Section 727 is an SPS measure by looking at whether it 
serves one of the purposes set forth in Annex A(1)(a) th rough (d) and whether it is  of the type listed in 
the second part of Annex A.  
Annex A(1)(a) through (d)  
7.103  According to the panel in EC – Approval and Marketing of Biotech Products , the purpose 
element is addressed in Annex A(1)(a) th rough (d) ("any measure applied to").287   
7.104  As explained by the panel in Colombia – Ports of Entry288, municipal law is to be approached 
as a "factual issue".289  In making an objective assessment of  municipal legislation, a panel should 
consider the very terms of the law290, in their proper context291, and complemented, whenever 
necessary, with additional sources, which may include  proof of the consistent  application of such 
laws, the pronouncements of domestic courts on the meaning of such laws, the opinions of legal 
experts and the writings of recognized scholars.292  The nature and extent of the evidence required to 
satisfy the burden of proof will vary from case to case.293 
7.105  We recall that it is China who bears the bur den of adducing evidence as to the scope and 
meaning of the relevant US legisl ation to substantiate its assertion that it is WTO-inconsistent. Such 
evidence will typically be produced in the form of  the text of the relevant legislation or legal 
instrument, which China has done. In this case, Chin a has produced not only the text of Section 727, 
but also the JES which explains the purpose of Section 727.294 In addition, China has argued that the 
exhibits produced by the United States including  a number of statements from the US Congress, 
support the premise that the purpose of Section 727 is the protection against the risk to human and animal life and health from contaminated food.  
7.106  The Panel will begin its analysis by considering the very terms of Section 727 to ascertain its 
purpose.
295 As we recall, Section 727 reads:   
"None of the funds made available in this Act may be used to establish or implement 
a rule allowing poultry products to be imported into the United States from the People's Republic of China."
296   
                                                      
287 Panel Report, EC – Approval and Marketing of Biotech Products,  para. 7.149; Panel Report, US – 
Continued Suspension , para. 7.429. 
288 Panel Report, Colombia – Ports of Entry , para. 7.93. 
289 Appellate Body Report, India – Patents (US) , para. 66; See also Panel Report, US – Section 301 
Trade Act , para. 7.18. See also PCIJ, Certain German Interests in Polish Upper Silesia , PCIJ, 1926, Rep., Series 
A, No. 7, p. 19. The Panel is aware that the Appellate Body has explicitly stated that when a panel examines the municipal law of a WTO Member for purposes of dete rmining whether the Member has complied with its WTO 
obligations, that determination is a legal characterization by a panel, and is therefore subject to appellate review 
under Article 17.6 of the DSU. Appellate Body Report, US – Section 211 Appropriations Act , para. 105. 
290 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 112; See also 
Panel Report, US – 1916 Act (EC) , para. 6.48. 
291 Panel Report, US – Section 301 Trade Act , para. 7.27. 
292 Appellate Body Report, US – Carbon Steel , para. 157. 
293 Appellate Body Report, US-Carbon Steel , para. 157; Appellate Body Report, US – Corrosion-
Resistant Steel Sunset Review , para. 168. 
294 Exhibit CN-33. We note that the United States also relies on the JES to support its view of the 
intended purpose of the legislation. 
295 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 112; See also 
Panel Report, US – 1916 Act (EC) , para. 6.48. 
296 Exhibit CN-1. WT/DS392/R 
Page 110  
 
 7.107  Hence, on its face, Section 727 is a measure whic h purely relates to the appropriated funds for 
the activities of an Executive Branch  agency of the United States Government. There is nothing in its 
specific text which addresses the purposes em bodied in Annex A(1)(a) through (d). 
7.108  As China has pointed out
297, the United States itself has argued that the policy objective 
underlying Section 727 was to protect against the risk  to human and animal life and health arising 
from the importation of poultry products from China.298  It has further argued that this policy 
objective is reflected in the legislative history of the measure.299   
7.109  We recall that we are to consider the very terms of the law300, in its proper context301, and 
complemented, whenever necess ary, with additional sources.302 We will therefore examine both the 
JES and the relevant statements on the Congressional R ecord to ascertain whethe r they are helpful in 
determining the purpose of Section 727. Both parti es agree that, under United States law, the JES is 
considered part of the legislative history of the AAA 2009.303 304   
7.110  As explained in Section II.B above, appropria tion bills are sometimes enacted with a JES 
which serves to explain the purposes of the provisions in the bill.305  The JES to Section 727 reads in 
pertinent part:  
"There remain very serious concerns about contaminated foods from China and 
therefore the bill retains language prohibiti ng FSIS from using funds to move forward 
with rules that would allow for the importation of poultry products from China into the U.S."
306 
7.111  The Panel notes that the JES plainly states that the purpose of Section 727 was to prohibit the 
FSIS from taking actions which the Congress felt w ould be contrary to its concerns about 
contaminated food from China.  
7.112  The United States has drawn the Panel's atte ntion to a number of statements from the 
US Congress showing that the objective of Secti on 727 was to address concerns about the risk to 
human and animal life and health posed by the prospect of importation of poultry products from China. The legislative history of the measure appear s to reflect the policy objective referred to by the 
United States. The United States provided the Pane l with the FY 2008 Omnibus Appropriations Act 
Committee Report which refers to the barring of th e funds due to food contamination episodes in 
China: 
"Given the recent situation involving pet foods contaminated with melamine from 
China and the repeated, serious food contamin ation incidents within China, it is clear 
that we cannot rely on the Chinese government  to ensure its plants adhere to U.S. 
standards in processing. Weak government cont rols in China, coupled with the high 
                                                     
 
297 China's opening oral statemen t at the first substantive meeting of the Panel, para. 39. 
298 United States' first written submissi on, para. 119.  Exhibit CN-33. 
299 United States' first written submission, paras. 119 -121 citing the JES accompanying Section 727.   
300 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 112; See also 
Panel Report, US – 1916 Act (EC) , para. 6.48. 
301 (footnote original ) Panel Report, US – Section 301 Trade Act , para. 7.27. 
302 (footnote original ) Appellate Body Report, US – Carbon Steel , para. 157. 
303 China's response to Panel question No. 20;  United States' response to Panel question No. 20. 
304 Both China and the United States agree that, under US law, legislative history is relevant when 
interpreting a statute. See China's response to Panel's qu estion 20, United States' response to Panel's question 20. 
305 Congressional Research Serv ice, Conference Reports and Joint Explanatory Statements, 1 
December, 2004. p. 7. Exhibit US-58. 
306 Joint Explanatory Statement, Division A of AAA of 2009, p. 82. (Exhibit CN-33).  WT/DS392/R 
 Page 111 
 
 
 incidence of H5N1 in that country, provid e no assurance that the returned product is 
actually from U.S. poultry or that poultry carrying the H5N1 virus is not used instead of U.S.-produced poultry. While FSIS has said that the products would be safe because processing would kill any H5N1 viruses,  U.S. inspectors will not be standing 
over the shoulders of Chinese workers; in  fact, U.S. inspectors would visit the 
Chinese plants at most once a year."
307 
7.113  The United States also cites the statements of  Representative Rosa DeLauro, the author of 
Section 727, where she said that the objective of Sec tion 727 was to address concerns about the health 
risks posed by the importation of poultry products from China.308  These statements could be seen to 
reflect the legislative intent of Section 727. 
7.114  We note that China asserts that, according to th e JES, the purpose of Section 727 is to protect 
human life and health and not animal health.309  It states that the JES refers to "serious concerns about 
contaminated food' without mentioning any animal diseases at all."310 The United States argues that 
the policy objective of Section 727 was to protect human and animal life and health from the risk posed by the importation of poultry products from China.
311  We note that the House Committee 
Report also refers to the protection of animal life and health.  
7.115  In the Panel's view, Section 727 was enacted for the purpose of protecting human and animal 
life and health from the risk posed by the prospect of the importation of contaminated poultry products from China. Accordingly, the Panel conclud es that Section 727 is a measure applied for the 
purpose set forth in Annex A(1)(b).  
Second part of Annex A(1)
  
7.116  The second part of Annex A(1) provides that  SPS measures "include all relevant laws, 
decrees, regulations, requirements and procedures ... ." 
7.117  China argues that Section 727 is a budgetary measure under the legal system of the 
United States.312 The Panel understands this to be a fact not contested by the United States. According 
to China, the obvious conclusion is that, given that Section 727 is a provision of a law, it falls within 
the illustrative list of measures in Annex A(1).313   
7.118  We recall that we have concluded that the na ture of a measure may be of relevance as an 
intrinsic part of the form to determine whether such measure is an SPS measure. The Panel notes that 
                                                      
307 House Report 110-258, at 54 (July 24, 2007) (Exhibit US-42). 
308 Exhibit US-50. 
309 China's opening oral statemen t at the first substantive meeting of the Panel, para. 41. 
310 China's opening oral statemen t at the first substantive meeting of the Panel, para. 41. 
311 United States' first written submission, para. 119, United States second written submission, para. 12. 
312 China's first written submission, para. 116; China' s opening oral statement at the first substantive 
meeting of the Panel, para. 42  We note that China often refers to Section 727 as a budgetary provision. We note however that the law is appropriations legislation, which allocates funds for an Execu tive Branch agency, in this 
case the FSIS, to use according to the manner authorized in separate legi slation. In this case Section 727 
included a limitation on how the appr opriated money could be utilized. We  recall that the US Congress enacts 
annual appropriation bills which provide funding for the agencies and programmes previously authorized. The 
US Congress can determine the terms and conditions under which an appropriation may be used. Provisions in 
appropriations acts may be intended to  prevent or restrict federal agencies  from taking certain rulemaking or 
regulatory actions. See Exhibits US-2 and 4. 
313 China's opening oral statemen t at the first substantive meeting of the Panel, para. 42. WT/DS392/R 
Page 112  
 
 Section 727 is a provision of a law, the AAA of 2009
314, dealing with appropriations relating to the 
activities of an Executive Branch agency  of the United States Government.  
7.119  The fact that Section 727 deals with monetary  appropriations concerning the activities of an 
Executive Branch agency of the Un ited States Government, instead of directly regulating sanitary and 
phytosanitary issues, could be viewed as signifyi ng that Section727 is not an SPS measure. Indeed, a 
legal provision dealing with monetary appropria tions which will affect the activities of a given 
government agency does not appear to fit the co mmon perception of an SPS measure. The Panel has 
thus carefully pondered this approach, being the first time that a measure such as Section 727 has 
been challenged under the SPS Agreement . Although, Section 727 is an  appropriations bill, it is 
Congress' way of exerting control over the activities of  an Executive Branch agency responsible for 
implementing substantive laws a nd regulations on SPS matters. Thus the fact that it is an 
appropriations bill does not exclude it from the scope of the types of SPS measures  set forth in the second part of Annex A(1).  
7.120  Given that Section 727 is a measure applied to achieve the purpose set forth in 
subparagraph (b) of Annex A(1) a nd it is a measure of the type de scribed in the second part of 
Annex A(1), the Panel concludes that Section 727 falls within the definition of an SPS measure in 
Annex A(1) of the SPS Agreement . 
(iii) Whether Section 727 affects directly or indirectly international trade 
7.121  Once we have concluded that S ection 727 falls within the defi nition of an SPS measure in 
Annex A(1) of the SPS Agreement , we need to look at the second element of the test to decide 
whether Section 727 is an SPS measure within the scope of the SPS Agreement , i.e. whether it affects 
directly or indirectly international trade. 
7.122  In this respect, China argues that by preven ting China from exporting poultry products to the 
United States, Section 727 directly or indirectly affects international trade within the meaning of 
Article 1.1 of the SPS Agreement " and therefore Section 727 is a measure subject to the 
SPS Agreement .
315  We note that the United States has not contested this statement by China.  
7.123  In the Panel's view, Section 72 7 did affect international tr ade because it prohibited the FSIS 
from using appropriated funds for the establishmen t and implementation of a rule allowing the 
importation of poultry products from China. Whether a measure affects international trade directly or 
indirectly depends on how one views it. The Panel no tes that regardless of whether one considers the 
effect of Section 727 as direct or indirect, the effect  of the measure was such that while it was in force 
poultry exports from China to the United States coul d not commence. Therefore, Section 727 directly 
or indirectly affected international trade in  poultry products. Thus, the Panel concludes that 
Section 727 also satisfies the second condition in Article 1 of the SPS Agreement . 
(c) Conclusion 
7.124  Having concluded that Section 727 falls with in the definition of an SPS measure in 
Annex A(1) of the SPS Agreement  and that it directly or indirectly affected international trade, the 
Panel finds that Section 727 is an SPS measure within the scope of the SPS Agreement . 
                                                      
314 The AAA of 2009 is a regular appropriation bill that provides th e necessary funding for the FSIS to 
carry out, inter alia , the functions foreseen by the PPIA. 
315 China's opening oral statement at  the first substantive meeting of the Panel, para. 42. China's 
response to Panel question 42.  WT/DS392/R 
 Page 113 
 
 
 D. WHETHER ARTICLE 4 IS THE ONLY PROVISION OF THE SPS A GREEMENT  APPLICABLE TO 
SECTION 727 
1. Background 
7.125  The United States has argued that Section 727 was a normal act of congressional oversight 
taken in the context of an ongoing equivalence proceeding.316 In this context, the United States 
contends that Section 727 would be subject  to the provisions of Article 4 of the SPS Agreement  
instead of the various claims presented by Chin a because Article 4 is specifically addressed to 
regulate equivalence-based measures. We note that Article 4 of the SPS Agreement  is not part of our 
terms of reference. Pursuant to our obligatio n under Article 11 of the DSU to determine the 
applicability of the cited provisions, before entering  into an examination of China's claims, we are 
going to examine the United States' co ntention that the provisions of the SPS Agreement  China cited 
do not apply to Section 727 and that only Article 4 of the SPS Agreement is the applicable provision. 
2. Arguments of the parties 
7.126  The United States argues that Section 727 was a normal act of congressional oversight taken 
in the context of an ongoing equivalence proceeding.317 It continues to explain that action by Congress 
was not separate and apart from the system in the Un ited States to ensure the safety of imported food, 
but rather, part of the system.318 It states that Section 727 is pa rt of the equivalence regime itself.319 In 
this respect, it characterizes Section 727 as a "proce dural requirement adopted in the course of an 
ongoing equivalency review".320 The United States further explains that the requirement imposed by 
Section 727 was that FSIS could not use appropriate d funds to establish or implement equivalence 
rules related to Chinese poultry during fiscal year 2009.321 
7.127  The United States further argues that Article 4 is the only Article in the SPS Agreement that is 
specifically addressed to regulate equivalence-based measures.322 The United States argues that to 
determine which SPS provisions apply to a measur e adopted in the context of an equivalence 
proceeding, one must carefully ev aluate the specific measure, and the specific arguments regarding 
the alleged breach.323 Accordingly, it submits that China has not met its burden of explaining how 
each SPS provision cited by China applies to Section 727.324   
7.128  The United States recognizes that Articles 2.2, 2.3, and 5.1 could apply to a measure – such as 
the PPIA – that establishes an equivalence-based regime.325  However, it notes that it would be 
difficult to see how these provisions necessarily apply to every measure adopted in the context of an 
equivalence proceeding.326  Based on the panel on EC – Approval and Marketing of Biotech Products , 
the United States argues that a scien tific basis is required for substantive SPS measures only – such as 
product ban or a requirement to quarantine or bor der testing – which provides protection from an 
SPS risk, and not to intermediate  measures used in assessing risk and deciding on what substantive 
                                                      
316 United States' opening oral statement at the seco nd substantive meeting of the Panel, para. 9. 
317 United States' opening oral statement at the seco nd substantive meeting of the Panel, para. 9. 
318 United States' opening oral statement at the seco nd substantive meeting of the Panel, para. 9. 
319 United States' response to Panel question No. 109. 
320 United States' second written submission, para. 99. 
321 United States' response to Panel question No. 107. 
322 United States response to Panel question No. 99. United States' second written submission, 
paras. 89-92. 
323 United States' responses to Panel question No. 99. 
324 United States' second written submission, para. 86. 
325 United States' response to Panel question No. 99, para. 27, United States' response to Panel question 
No. 100, para. 29. 
326 United States' response to Panel question No. 100, para. 29. WT/DS392/R 
Page 114  
 
 measures should be applied.
327  In its view, "it would be difficult to see why there would be a need to 
be scientific evidence for, or a b asis in scientific principles for, an y number of measures adopted in 
the context of an equivalence proceeding, such as the language, form, means of delivery, or number of 
copies of information submitted."328  Accordingly, the United States' argues that Section 727 is a 
procedural requirement adopted in the course of an ongoing equivalency review, and as such, cannot 
be required to be based on sufficient scientific evid ence or a risk assessment separate from that of the 
PPIA.329   
7.129  As for Articles 5.5 and 5.6, the United States argues that it would not appear that these 
provisions apply to an equivalence regime.330  It argues that an equivalence regime is aimed at 
determining if another Member's measures achieve the importing Member's ALOP, hence, in its view, 
by definition there would be only one ALOP at issue. It continues to argue then, that as Article 5.5 
regulates distinctions in the ALOP, Article 5.5 would not appear to apply.331  As for Article 5.6, the 
United States argues that this provision is about th e measures that a Member itself adopts rather than 
the measures another Member has adopted. An equi valence proceeding on the other hand is aimed at 
determining if the exporting Member's measures me et the importing Member's ALOP. Accordingly, it 
concludes that Article 5.6 does not appear to apply.332 
7.130  China  challenges the United States' characterizat ion of Section 727. It argues that the 
measure is not an "intermediate step" or a "proce dural requirement" in the standard FSIS equivalency 
process and that rather, it prevented FSIS from performing any science-based analysis of the 
equivalence of China's poultry safety and inspection regime.333  To that end, China notes that neither 
the CFR nor the FSIS handbook refer to Congressional action blocking the application of procedures 
for one applicant country.334  China further argues that Section 727 is a "law" enacted as part of the 
AAA 2009 which is separate and legally distinct  from the PPIA and the FSIS regulations.335  
Accordingly, China submits that Section 727 is a distinct SPS measure reflecting a separate ALOP 
that is applied only to China336, and that it must comply with all of the provisions of the 
SPS Agreement .337 
3. Analysis by the Panel 
7.131  The parties have argued vigorously about the legal characterization that the Panel should 
assign to Section 727, and the implications it has for the application of several provisions of the 
SPS Agreement . The parties dispute two main issues: firs t, whether Section 727 is part of an 
equivalence regime, and second, whether it is the t ype of SPS measure subject to the obligations 
embodied in Articles 2 and 5 of the SPS Agreement  or rather only subject to Article 4 of the 
SPS Agreement.  
7.132  In the Panel's view, the paramount question is  to determine whether Section 727 is an 
SPS measure subject to the provisions of the SPS Agreement  claimed by China. The Panel will 
commence its analysis by addressing the United States' argument that Article 4 is the only provision 
                                                      
327 United States' second written submission, para. 98 citing the Panel Report, EC – Approval and 
Marketing of Biotech Products , para. 7.1388. 
328 United States' response to Panel question No. 99. 
329 United States' second written submission, para. 99. 
330 United States' response to Panel question No. 100. 
331 United States' response to Panel question No. 100. 
332 United States' response to Panel question No. 100. 
333 China's opening oral statement at the second substantive meeti ng of the Panel, paras. 9-10. 
334 China's opening oral statemen t at the second substantive meeting of the Panel, para. 10. 
335 China's opening oral statemen t at the second substantive meeting of the Panel, para. 11. 
336 China's opening oral statemen t at the second substantive meeting of the Panel, para. 11. 
337 China's comment to United States' to Panel question No. 106.  WT/DS392/R 
 Page 115 
 
 
 in the SPS Agreement that is applicable to equivalence-ba sed measures, such as, in its view 
Section 727.338  We recognize that China has made no claim with respect to the consistency of 
Section 727 with Article 4 and thus Article 4 is outside our terms of reference. Therefore, we are not 
going into an analysis of what is required to comp ly with the obligations in Article 4. Rather, our 
examination of this provision, simply con cerns a determination of whether it is the only provision in 
the SPS Agreement  that could apply to Section 727. 
7.133  The Panel will first turn to the text of Article 4 which provides as follows: 
"1. Members shall accept the sanitary or phytosanitary measures of other 
Members as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member 
objectively demonstrates to the importing Member that its measures achieve the 
importing Member's appropriate level of sanita ry or phytosanitary protection. For this 
purpose, reasonable access shall be given, upon request, to the importing Member for inspection, testing and other relevant procedures. 
2. Members shall, upon request, enter into consultations with the aim of 
achieving bilateral and multilateral agreemen ts on recognition of the equivalence of 
specified sanitary or phytosanitary measures." 
7.134  We note that equivalence regimes adopted pursuan t to Article 4 have never been the subject 
of a dispute before the DSB. There is however, a decision from the SPS Committee entitled " Decision  
on the Implementation of Article 4 of the Agreemen t on the Application of Sanitary and Phytosanitary 
Measures " (the Decision).
339  This Decision was adopted under the authority of the SPS Committee to 
carry out the functions necessary to implement and further the objectives of the SPS Agreement  under 
Article 12.1. Its preamble provides that the Deci sion was adopted "[d]esiring to make operational the 
provisions of Article 4" of the SPS Agreement .  
7.135  The Decision sets out guidelines for any Member  who requests the recognition of equivalence 
of their SPS measures and for the importing Member  who is the addressee of such request. As 
contemplated in the Decision, upon a request for equivalence, the importing Member should explain 
the objective and rationale of the SPS measure and iden tify clearly the risks that the relevant measure 
is intended to address.340 The Decision further explains that the importing Member should indicate the 
ALOP which its SPS measure is designed to achieve.341 Such an explanation should be accompanied 
by a copy of the risk assessment on which the SPS m easure is based or a technical justification based 
on a relevant international sta ndard, guideline or recommendation.342 The exporting Member should 
then provide appropriate science-based and technical information to support its objective 
                                                      
338 United States response to Panel question No. 99. 
339 Committee on Sanitary and Phytosanitary Measures, Decision  on the Implementation of Article 4 of 
the Agreement on the Application of Sanitary and Phytosanitary Measures , document G/SPS/19/rev. 2, dated 
23 July 2004. 
340 Committee on Sanitary and Phytosanitary Measures, Decision  on the Implementation of Article 4 of 
the Agreement on the Application of Sanitary and Phytosanitary Measures , document G/SPS/19/rev. 2, dated 
23 July 2004, para. 2. 
341 Footnote 3 of the Decision states that "[i]n doing so, Members should  take into account the 
Guidelines to Further the Practical Implementation of Article 5.5 adopted by the Committee on Sanitary and 
Phytosanitary Measures at its meeting of 21-22 June 2000 (document G/SPS/19/rev. 2, dated 23 July 2004). 
342 Committee on Sanitary and Phytosanitary Measures, Decision  on the Implementation of Article 4 of 
the Agreement on the Application of Sanitary and Phytosanitary Measures , document G/SPS/19/rev. 2, dated 
23 July 2004, para. 2. WT/DS392/R 
Page 116  
 
 demonstration that its measure achieves th e ALOP identified by the importing Member.
343 The 
importing Member should analyse such information w ith a view to determining whether the exporting 
Member's SPS measure achieves the ALOP provided by its own relevant SPS measure.344 
7.136  The Panel notes, that while this decision is not binding and does not determine the scope of 
Article 4, we do consider that this Decision expands on the Members' own understanding of how 
Article 4 relates to the rest of the SPS Agreement and how it is to be implemented.345 The Panel sees 
nothing in Article 4 or the Decision which suggests that Article 4 is the only provision in the SPS Agreement which regulates the operation of equivale nce regimes, including their "procedural 
requirements" or that it should be applied in isolation from other relevant provisions of the 
SPS Agreement . In fact, the Decision states that the importing Member should explain its 
SPS measures by identifying the risk and provide a copy of the risk assessment or technical standard 
on which the measure is based. Further, it requires the importing Member to analyse the science-based 
and technical information provided by the exportin g Member with respect to that Member's own 
SPS measure(s) to examine if the measure achieves the importing Member's ALOP.  
7.137  The Decision refers inter alia  to risk assessments, international standards and ALOPs, which 
are governed by Article 2 which embodies the "Basic Rights and Obligations"
346, Article 3 governing 
harmonization with international st andards and Article 5 which regulates the assessment of risk and 
determination of the ALOP. The Decision, therefore, implies that measures taken as part of an equivalence regime, subject to Article 4, should also  comply with the other relevant provisions of the 
SPS Agreement .    
7.138  In addition, there is nothing in the text of Artic le 4 that suggests that it should be applied in a 
vacuum, isolated from other relevant provisions of the SPS Agreement . This is further reinforced by 
the fact that, as stated by the panel in Japan – Apples , Article 4 is not a defence against violations of 
other provisions of the SPS Agreement .
347 
7.139  The Panel does not intend to exhaustively explai n the relationship between Article 4 and other 
provisions of the SPS Agreement . Suffice it to say that we do not belie ve that Article 4 is to be applied 
to the exclusion of other relevant provisions of the SPS Agreement . A determination of which 
particular provisions are applicable to a given measure, must be done on a case-by-case basis. It is the Panel's view that nothing in Article 4 a priori precludes a given measure from being subject to the 
disciplines of Article 2, 4 and 5 at the same time.  
7.140  As the United States notes, Section 727 is a measu re related to the equivalence regime set up 
by the United States. In particular, Section 727 is an expression of the US Congress role in overseeing 
Executive Branch agencies. As noted a bove, we do not accept that Article 4 is ipso facto  the only 
provision applicable to measures adopted in the c ontext of an equivalence regime. In our view, a 
determination of what provisions of the SPS Agreement may apply to a given measure should be done 
on a case-by-case basis. Consequently, we will exam ine the particular features of Section 727 and 
                                                     
 
343 Committee on Sanitary and Phytosanitary Measures, Decision  on the Implementation of Article 4 of 
the Agreement on the Application of Sanitary and Phytosanitary Measures , document G/SPS/19/rev. 2, dated 
23 July 2004, para. 4. 
344 Committee on Sanitary and Phytosanitary Measures, Decision  on the Implementation of Article 4 of 
the Agreement on the Application of Sanitary and Phytosanitary Measures , document G/SPS/19/rev. 2, dated 
23 July 2004, para. 7. 
345 We note that typically, decisions of the SPS Comm ittee indicate that they are not meant to affect the 
rights and obligations of the Members under the SPS Agreement . Such language is not present in this particular 
Decision. 
346 Specifically, Article 2.2 applies to "any measure", and Article 2.3 states that "their sanitary or 
phytosanitary measures", which suggests that no SPS measure is outside the scope of this provisions. 
347 Panel Report, Japan – Apples , para. 8.107.  WT/DS392/R 
 Page 117 
 
 
 determine whether the provisions cited by  China, namely Articles 2 and 5 of the SPS Agreement are 
applicable to it. 
7.141  The Panel notes that prior panels have discussed  the scope of both Articles 2 and 5 by making 
a distinction between "substantive" SPS measure s taken to achieve a Member's ALOP and 
"procedural requirements". In particular, the panel in Australia – Salmon (Article 21.5 – Canada) , 
made a distinction between risk reduction measur es allegedly needed to achieve a WTO Member's 
ALOP, which it called "substantive SPS measures in their own right" and procedures or information 
requirements to check and ensure the fulfilment of sanitary measures that are subject to Annex C(1)(c) of the SPS Agreement .
348  
7.142  We note that Article 2 is entitled "Basic Rights and Obligations". The overarching and 
encompassing title of this Article, leads the Panel to conclude that the obligations in Article 2 inform 
all of the SPS Agreement . We find support for our understanding in  the prior decisions of panels and 
the Appellate Body with respect to the relations hip between Articles 2 and 5. In particular, the 
Appellate Body has explained that the obligations in  Article 2 and Article 5 should be constantly read 
together. The Appellate Body stated that Article 2. 2 informs and imparts meaning to Article 5.1, and 
that similarly, Article 2.3 informs Article 5.5.349  Further, the panel in Japan – Agricultural Products 
II stated that the more specific language of Article 5.6 should be read in light of the more general 
language in the first requirement of Article 2.2.350   
7.143  Article 2.2 provides that:  
"Members shall ensure that any sanitary or  phytosanitary measure is applied only to 
the extent necessary to protect human, animal or plant life or health, is based on 
scientific principles and is not maintained  without sufficient scientific evidence, 
except as provided for in paragraph 7 of Article 5. " 
7.144  The panel in EC – Approval and Marketing of Biotech Products  explained that Article 2.2 
contains three separate requirements:  (i) the requi rement that SPS measures be applied only to the 
extent necessary to protect human, animal or pl ant life or health; (ii) the requirement that 
SPS measures be based on scientific principles; a nd (iii) the requirement that SPS measures not be 
maintained without suffi cient scientific evidence.351  We note that China's claim relates only to the 
third requirement of Article 2.2 of the SPS Agreement .352  Therefore, the Panel will only focus on 
whether this third requirement, is applicable to Se ction 727. We recall that the text of Article 2.2 
plainly states that it applies to "any" SPS measure.  We, thus see nothing in the language of Article 2.2 
that would somehow exempt an SPS measure from its  scope. We have found that Section 727 is an 
SPS measure, regardless of whether it relates to e quivalence. Accordingly, we conclude that the 
disciplines of Article 2.2 apply to Section 727 and China may pursue a claim on this basis. 
7.145  The Panel now turns to Article 2.3. This provision provides that: 
"Members shall ensure that their san itary and phytosanitary measures do not 
arbitrarily or unjustifiably discriminate between Members where identical or similar 
conditions prevail, including between their ow n territory and that of other Members. 
                                                      
348 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.156. 
349 Appellate Body Report, Australia – Salmon , para. 130, Appellate Body Report, EC – Hormones , 
para. 250. 
350 Panel Report, Japan – Agricultural Products II , para. 8.71. This statem ent was endorsed by the 
Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1433. 
351 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1424. 
352 China's first written submission, paras. 144-147 . China's opening oral statement at the first 
substantive meeting of the Panel, paras. 69-70. WT/DS392/R 
Page 118  
 
 Sanitary and phytosanitary measures shall not be applied in a manner which would 
constitute a disguised restriction on international trade." 
7.146  The United States argues that "it is unclear wh ether Article 2.3 is intended to apply to a 
procedural requirement, rather than a subs tantive SPS measure, and China has presented no 
explanation of how Article 2.3 would apply."
353 China contests this assertion by arguing that the text 
of Article 2.3 refers to SPS measures without disti nguishing between different types or forms, and that 
all SPS measures are disciplined by Article 2.3.354   
7.147  The text of Article 2.3 obliges Members to ensu re non-discrimination in "their SPS measures" 
without making any distinction between possible types of SPS measures. Given that it embodies a 
non-discrimination obligation, the Panel sees no r eason to conclude that Article 2.3 of the 
SPS Agreement would be inapplicable to procedural requi rements as the United States argues. Indeed, 
both "substantive" SPS measures as well as procedur al and information requirements can be applied 
in a manner which arbitrarily or unjustifiably discriminates between Members or constitutes a 
disguised restriction on international trade. We  do not see why such arbitrary or unjustifiable 
discrimination or disguised restrictions on trade wo uld be prohibited for one type of SPS measure and 
yet allowed for another. The broad wording of Article 2.3 of the SPS Agreement and the nature of the 
obligations it contains is bound to  be applicable to all SPS measures. Because we have found that 
Section 727 is an SPS measure, regardless of whether it relates to equivalence, we conclude that the 
disciplines of Article 2.3 apply to Section 727 and China may pursue a claim on this basis. 
7.148  With respect to China's claims under Ar ticle 5, we note that the panel in EC – Approval and 
Marketing of Biotech Products  assessed the scope of Articles 5.1, 5.5, and 5.6 of the SPS Agreement 
and determined that that these provisions apply to measures aimed at achieving the relevant Member's 
ALOP.355 The type of measure referred to by the panel in EC – Approval and Marketing of Biotech 
Products as being subject to Article 5 appears to be the same as the "substan tive SPS measure in its 
own right" referred to by the panel in Australia – Salmon (Article 21.5 – Canada). We find the 
reasoning of these prior panels to be  persuasive and make it our own.356   
7.149  Because the provisions in Article 5 cited by Ch ina apply to "substantive" SPS measures, we 
turn now to assess whether Section 727 is a "substa ntive" SPS measure which must comply with the 
obligations in Articles 5.1, 5.2, 5.5 and 5.6. 
7.150  We recall the United States' argument that there is  a risk to human and animal life and health 
from the importation of poultry products from China.357  In its view, "this risk results from both the 
inherent danger of cons uming poultry that is not produced unde r sanitary conditions or thoroughly 
inspected for contaminants, the risk  to animal life and health from the import of poultry infected with 
avian influenza, and the particular risk that ex ists when importing food from China due to China's 
                                                      
353 United States' second written submission, para. 102, United States' comment to China's response to 
Panel question No. 99. 
354 China's opening oral statemen t at the second substantive meeting of the Panel, para. 24. 
355 Panel Report, EC – Approval and Marketing of Biotech Products . paras. 7.1388, 7.1402, 7.1416, 
7.1433, 7.1439. 
356 We believe a close examination of the types of measures which satisfy the definition of an 
SPS measure in Annex A(1) supports our view that not all SPS measures are subject to th e disciplines of 
Article 5 on risk assessment and determining the ALOP. For example, it would not make sense for a Member to 
be required to conduct a risk assessment, as defined in Annex A(4), for determining its risk assessment methodology (which is one of the identified types of SPS measures in the second part of Annex A(1)).    
357 United States' first written submission, para. 113.  WT/DS392/R 
 Page 119 
 
 
 history of food safety scandals and longstanding sy stemic issues with smuggling, corruption, and the 
inadequate enforcement of its food safety laws."358  
7.151  The United States thus contends that Section 727 ensured that no Chinese poultry would be 
imported during 2009 by ensuring that equivalence rules for Chinese poultry would not be established 
and thus protect life and health.359  The United States further argues that this is one of the ways in 
which Section 727 contributed to poultry pr oducts from China being considered "safe"360, and it had 
already mentioned that "safe" was the ALOP enshrined in the PPIA.361 In addition, the United States 
argues that Section 727 and its JES also contributed to the protection of life and health by ensuring 
that FSIS would take additional steps to evaluate China's food safety inspection system in light of its recent food safety crises, enforcement issues, and new food safety law.
362 
7.152  We note that the establishment and implementation of a rule by FSIS in the Federal Register 
allowing the importation of poultry products from a give n country is a prerequisite for the importation 
of such products.363  Without the establishment or implementation of this rule, countries are prohibited 
from importing poultry products to the United States.  
7.153  Section 727 thus forbids the FSIS to use appropr iated funds to "establish" or "implement" a 
rule allowing the importation of poultry products from China. This funding restriction, although not 
directly prohibiting the importation of Chinese poultr y products, has the effect of prohibiting the 
importation of poultry products from China because w ithout a rule being established / implemented, 
Chinese poultry products are banned from entering the US market.  
7.154  It is through this ban, as well as the related activity that the USDA was urged to undertake,  
that Section 727 would be contributing to combating the risks highlighted by the United States. The 
United States has referred to certain risks that Ch inese poultry might entail – contaminants and avian 
influenza – and the need to prevent them entering its territory through a prohibition on importation. The United States has sought to achieve its ALOP – poultry products in the market being safe – through a ban on the importation of Chinese poultry pr oducts. We therefore conclude that Section 727 
is a "substantive SPS measure in its own right"
364 because it was enacted to achieve the United States' 
ALOP for poultry products from China.365  Section 727 is therefore subject to the obligations under 
Articles 5.1, 5.2, .5.5, 5.6, 2.2 and 2.3 of the SPS Agreement . 
7.155  Having concluded that China has raised claims regarding the consistency of Section 727 with 
provisions that are applicable to it, we thus pro ceed to examine the claims presented by China under 
the SPS Agreement . 
E. ORDER OF ANALYSIS OF CHINA 'S CLAIMS UNDER THE SPS A GREEMENT  
7.156  The Panel notes that China has presented its claims under the SPS Agreement starting with the 
basic obligation in, Article 2.3 not to arbitrarily or unjustifiably discriminate between Members and 
Article 5.5 of the SPS Agreement , which prohibits distinctions in ALOPs that result in arbitrary or 
                                                      
358 United States' first written submission, para. 113. 
359 United States' response to Panel question No. 110. 
360 United States' response to Panel question No. 110. 
361 United States' second written submission, para. 57. 
362 United States' second written submission, paras. 17-30. 
363 USDA/FSIS, Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory 
Systems , p. 12 (Exhibit CN-7), 9 CFR § 381.196(a)(1) and § 381.196 (b) (Exhibit CN-6). 
364 Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.156. 
365 We recall the findings of the panel in EC – Approval and Marketing of Biotech Products . 
paras. 7.1388, 7.1402, 7.1416, 7.1433, 7.1439, where it found that measures adopted to achieve a Member's 
ALOP are subject to these provisions. WT/DS392/R 
Page 120  
 
 unjustifiable discrimination. Next, China focuses on the provisions requiring that SPS measures be 
based on scientific evidence: Articles 5.1, 5.2 and 2.2 of the SPS Agreement , and then moving to 
Article 5.6 of the SPS Agreement , which relates to the extent the measure is applied to achieve the 
ALOP. Finally, China concludes with the operation of  control, inspection and approval procedures, in 
Article 8 of the SPS Agreement .  
7.157  Although the SPS Agreement does not provide any guidance on a sequence for analysing its 
provisions, the Panel prefers to follow a different orde r of analysis to that ch osen by China. In our 
view, it would be preferable to start the analysis  by looking at whether Section 727 is based on 
scientific evidence, before examining how Section 727 is applied. Accordingly, we will start by 
analysing Articles 5.1, 5.2 and 2.2 of the SPS Agreement . We will commence with Article 5.1 and 5.2 
because any inconsistency that the Panel finds with  these provisions would by implication lead to a 
finding of inconsistency with Article 2.2 of the SPS Agreement .
366  
7.158  We will next examine whether Section 727 is  inconsistent with the prohibition against 
arbitrarily or unjustifiable discrimination among Memb ers in Article 2.3 and whether the application 
of different ALOPs in different, but comparable situations, results in arbitrary or unjustifiable 
discrimination that is inconsistent with Article 5.5 of the SPS Agreement . Similarly to the analysis of 
the relationship between Articles 2.2 and 5.1, the Appellate Body has found that Article 5.5 may be 
seen to mark out and elaborate a particular route lead ing to the same destination set out in Article 2.3. 
Therefore, a finding of a violation of Article 5.5 necessarily implies a violation of Article 2.3.367  
7.159  In those disputes, the Appellate Body was faced  with a situation where the discrimination 
resulting from distinctions in ALOPs was discrimi nation between Members. However, we note that 
Article 5.5 does not contain the phrase "between Me mbers" and it is conceivable that a case could 
arise where the distinction in ALOPs in different  situations was between products coming from the 
same Member. In such a case while an inconsiste ncy with Article 5.5 could be established, there 
would be no discrimination between Members. Ther efore,  a violation of Article 2.3 would not 
necessarily follow. 
7.160  In this dispute, China has presented two "diffe rent situations" for the purposes of analysis 
under Article 5.5. One of those "different situati ons" involves an allegation of discrimination between 
the same product, poultry, coming from different Memb ers. Given that in cases of an allegation of 
discrimination between Members a violation of Article 5.5 necessarily implies a violation of Article 2.3, we will follow the practice of prior pane ls and begin with the more specific obligation in 
Article 5.5, before moving on to Article 2.3.  
7.161  We will then consider whether Section 727 is mo re trade-restrictive than required pursuant to 
Article 5.6 of the SPS Agreement . Finally, we will analyse whether Section 727 is inconsistent with 
Article 8 by failing to observe the pr ovisions of Annex C(1)(a) of the SPS Agreement . 
F. W
HETHER SECTION  727  IS INCONSISTENT WITH ARTICLES  2.2,  5.1 AND 5.2 OF THE 
SPS A GREEMENT  
1. Arguments of the parties  
7.162  China  argues that Section 727 is not supported by a risk assessment and, therefore, it is 
inconsistent with Articles 2.2, 5.1 and 5.2 of the SPS Agreement.  China notes that there is no 
indication in any publicly available documentati on that Section 727 was enacted on the basis of 
                                                      
366 Appellate Body Report, Australia – Salmon , para. 151. 
367 Appellate Body Report, EC – Hormones, para. 212; See also Appellate Body Report, Australia – 
Salmon, para. 252.     WT/DS392/R 
 Page 121 
 
 
 scientific evidence demonstrating that Chinese poultr y products posed any specific health threat as 
required by Article 2.2, or on the basis of a risk assessment as required by Article 5.1 of the SPS Agreement .
368  
7.163  China submits that the legislative history of Section 727 does not indicate that there was any 
scientific evidence underpinning the provision sufficien t to meet the standards of Article 2.2 of the 
SPS Agreement .369 It points to the fact that the JES does not  mention any specific health threat posed 
by Chinese products that Section 727 was meant to a ddress. Further, that the JES does not provide an 
explanation why poultry products are targeted in order to address undefined concerns about 
contaminated foods in general.370 In response to the evidence the United States proffered regarding 
China's food safety crises, China argues that th e "newspaper stories and USDA reports alleging 
'contamination' and food safety crisis in China" are not referenced by the JES, and that none of the 
evidence submitted by the United States indicates that  there has been even one food safety crisis 
related to Chinese poultry.371 China submits that newspaper stories and reports are irrelevant to the 
question of whether Section 727 was enacted on the basis of specific, scientific evidence related to 
Chinese poultry. 
7.164  Further, China argues that the funding restriction would eventually impede the elaboration of 
a risk assessment because the FSIS' expert scientists were prohibited from investigating the risk by the very terms of Section 727.
372   
7.165  Finally, China notes that had the United Stat es conducted a proper risk assessment, it would 
not have resulted in a total ban of Chinese poultry. It finds support for  its contention in the FSIS 2004 
and 2006 audit reports of China's poultry inspection system as part of its equivalency application 
which conclude that China's food safety regulatory system for poultry products achieves food safety 
results which are "equivalent" to those achieved under the United States system .373 
7.166  As explained in Section VII.D above, the United States  argues that Articles 2.2, 5.1 and 5.2 
of the  SPS Agreement do not apply to Section 727 because it is a procedural requirement adopted in 
the course of an equivalence determination.374  In response to a question by the Panel, the 
United States argued that Section 727 was based on science and that it is intended to address food 
safety problems identified with respect to China and th at there was a need to ensure that exports from 
China would be safe.375   
2. Analysis by the Panel 
(a) Relationship between Articles 2.2, 5.1 and 5.2 of the SPS Agreement  – Order of analysis 
7.167  We note that Articles 2.2, 5.1 and 5.2 of the SPS Agreement  are provisions that deal with the 
scientific foundation of SPS measures. We note that the Appellate Body has ruled that Articles 2.2 
and 5.1 of the SPS Agreement  should "constantly be read toge ther", because Article 5.1 of the 
SPS Agreement  may be viewed as a specific application of the basic obligations contained in 
Article 2.2 of the SPS Agreement .376  Therefore, according to the Ap pellate Body, Article 2.2 informs 
                                                      
368 China's first written submission, para. 137, China' s opening oral statement at the first substantive 
meeting of the Panel, para. 69. 
369 China's first written submission, para. 146. 
370 China's opening oral statemen t at the first substantive meeting of the Panel, para. 70. 
371 China's opening oral statemen t at the first substantive meeting of the Panel, para. 71. 
372 China's opening oral statemen t at the first substantive meeting of the Panel, para. 72. 
373 China's opening oral statemen t at the first substantive meeting of the Panel, para. 73. 
374 United States' second written submission, para. 101. 
375 United States' response to Panel question No. 114. 
376 Appellate Body Report, EC – Hormones , para. 180. WT/DS392/R 
Page 122  
 
 Article 5.1 and thus the elements that define the b asic obligation set out in Article 2.2 impart meaning 
to Article 5.1.
 377 
7.168  The Panel further notes that prior panels and th e Appellate Body have reasoned that in the 
event that an SPS measure is not based on a risk assessment conducted according to the requirements 
in Article 5.1 and 5.2, this measure can be presume d, more generally, not to be based on scientific 
principles or to be maintained without sufficient scientific evidence.378  Nonetheless, given the more 
general character of Article 2.2 of the SPS Agreement  not all violations of Article 2.2 are covered by 
Article 5.1 and 5.2 of the SPS Agreement .379   
7.169  Consistent with prior rulings of  panels and the Appellate Body, the Panel will therefore begin 
its consideration of China's claims under Articles 2.2, 5.1 and 5.2 of the SPS Agreement  by examining 
the two latter "more specific" provisions first.380 
(b) Article 5.1 and 5.2 of the SPS Agreement  
7.170  We note that Article 5.1 of the SPS Agreement  enunciates the basic principle that 
SPS measures must be based on a risk asse ssment. This provision reads as follows: 
"Members shall ensure that their sanitary or phytosanitary measures are based on an 
assessment, as appropriate to the circumstances, of the risks to human, animal or 
plant life or health, taking into account risk assessment techniques developed by the 
relevant international organizations."  
7.171  Article 5.2 of the SPS Agreement  further instructs WTO Members on how to conduct a risk 
assessment. Specifically, Article 5.2 states that: 
"In the assessment of risks, Members sha ll take into account available scientific 
evidence; relevant processes and production methods; relevant inspection, sampling 
and testing methods; prevalence of specific di seases or pests; exis tence of pest- or 
disease-free areas; relevant ecological and environmental conditio ns; and quarantine 
and other treatment." 
7.172  The panel in Japan – Apples  noted that Article 5.1 and 5.2 of the SPS Agreement  "directly 
inform each other, in that paragraph 2 sheds light  on the elements that are of relevance in the 
assessment of risks foreseen in paragraph 1".381  Therefore, because Article 5.2 imparts meaning to the 
general obligation contained in paragraph 1 to base measures on an "assessment...of risks", we may 
also consider elements contained in Article 5.2 in the course of our analysis under Article 5.1.382  
7.173  Accordingly, an analysis under Article 5.1 of the SPS Agreement  would consist of answering 
two fundamental questions: first, was a risk assessme nt, appropriate to the circumstances, taking into 
account risk assessment techniques developed by th e relevant internationa l organizations and the 
elements listed in Article 5.2, c onducted?  Second, is the SPS measure based on that risk assessment?   
                                                      
377 Appellate Body Report, EC – Hormones , para. 250. 
378 Appellate Body Report, Australia – Salmon , para. 138; Panel Report, Australia – Salmon 
(Article 21.5 – Canada) , paras. 7.85 and 7.161; and Panel Report, EC – Approval and Marketing of Biotech 
Products , para. 7.3399. 
379 Panel Report, Australia – Salmon , para. 8.52. "Article 5.1 and 5.2 – in the words of the Appellate 
Body in EC – Hormones  when dealing with the relationship between Articles 2.3 and 5.5 – 'may be seen to be 
marking out and elaborating a particular route leadin g to the same destination set out in' Article 2.2. 
380 Appellate Body Report, Australia – Salmon , para. 137. 
381 Panel Report, Japan – Apples , para. 8.230. 
382 Panel Report, Japan – Apples, para. 8.232.  WT/DS392/R 
 Page 123 
 
 
 7.174  In determining whether a measure is based on a risk assessment within the meaning of 
Article 5.1 of the SPS Agreement , one needs to first determine whether a risk assessment was 
conducted at all. In order to do so it is helpful to start by looking into what a risk assessment is, in 
light of the definition in Annex A(4).  
(i) The concept of risk assessment pursuant to Annex A(4) of the SPS Agreement 
7.175  The concept of risk assessment is defined in Annex A(4) of the SPS Agreement  as follows:   
"The evaluation of the likelihood of entry, establishment or spread of a pest or disease 
within the territory of an importing Member according to the sanitary or 
phytosanitary measures which might be applied, and of the associated potential biological and economic consequences; or the evaluation of the potential for adverse 
effects on human or animal health arising from the presence of additives, 
contaminants, toxins or disease-causing organi sms in food, beverages or feedstuffs." 
(Emphasis added). 
7.176  Annex A(4) therefore provides for two differe nt types of risk assessment depending on 
whether the imposing Member is analysing the "like lihood"of entry, establishment or spread of a pest 
or disease" or rather analysing "the potential for ad verse effects on human or animal health arising 
from the presence of additives, contaminants, toxi ns, or disease-causing organi sms in food, beverages 
or feedstuffs".  
7.177  As noted in Section VII.C above , Section 727 satisfies the de finition of an SPS measure under 
Annex A(1)(b) of the SPS Agreement . It would seem that SPS measures under Annex A(1)(a) and (c) 
would require risk assessments conducted pursuant to the definition under the first sentence of 
Annex A(4), while those which satisfy the definiti on of an SPS measure under Annex A(1)(b) would 
require that the risk assessment be conducted pur suant to the second sentence of Annex A(4).
383  
7.178  With respect to the second sentence of Annex A(4) of the SPS Agreement , the panels in 
US/Canada – Continued Suspension  held that such a risk assessment required the imposing Member 
to: (i) identify the additives, contaminants, toxins  or disease-causing organisms in food, beverages or 
feedstuffs at issue (if any); (ii) identify any possible adverse effect on human or animal health; and 
(iii) evaluate the potential for that adverse effect to arise from the presence of  the identified additives, 
contaminants, toxins or disease-causing orga nisms in food, beverages or feedstuffs.384 
7.179  We note that the Appellate Body has found that the requirement to conduct a risk assessment 
is not satisfied merely by a general discussion of the disease sought to be avoided by the imposition of 
                                                      
383 See Panel Report, Canada – Continued Suspension , para. 7.461. We note that the distinction 
between the two types of assessment is not merely academic. In Australia – Salmon,  the Appellate Body further 
elaborated on the dis tinction between the two standards for risk assessment contained in Annex A(4) and the 
need for a substantive distinction between the evaluation of "likelihood" in the first sentence and the evaluation 
of "potential" in the second sentence. Specifically, the Appellate Body stated: 
"We note that the first type of risk assessment in paragraph 4 of Annex A is substantially different from 
the second type of risk assessment contained in the same paragraph. While the second requires only the 
evaluation of the potential for adverse effects on human or animal health, the first type of risk assessment 
demands an evaluation of the likelihood  of entry, estab lishment or spread of a dis ease, and of the associated 
potential biological and economic consequences. In view of the very different language used in paragraph 4 of 
Annex A for the two types of risk assessment, we do not believe that it is correct to diminish the substantial 
differences between these two types of risk assessments..."  
Appellate Body Report, Australia – Salmon , footnote 69. 
384 Panel Report, Canada – Continued Suspension , para. 7.479. WT/DS392/R 
Page 124  
 
 an SPS measure.
385  Rather the risk assessment must  address the specific risk at issue.386  We also note 
that, in Japan – Apples , the Appellate Body clarified that a ri sk assessment should refer in general to 
the harm concerned as well as to the pr ecise agent that may possibly cause the harm.387  M o r e  
recently, in US/Canada – Continued Suspension , the Appellate Body also clarified that the risk 
assessment cannot be entirely isolated from the appropriate level of protection.  
(ii) When is a measure "based" on a risk assessment? 
7.180  The Appellate Body in EC – Hormones  explained that "Article 5.1, when contextually read as 
it should be, in conjunction with and as informed by Article 2.2 of the SPS Agreement , requires that 
the results of the risk assessment must sufficiently warrant – that is to say, reasonably support – the 
SPS measure at stake."388  In other words, there must be a "rational relationship" between the 
SPS measure and the risk assessment.389  The Appellate Body went on to explain that this requirement 
is a substantive one.390  However, the Appellate Body has clarified that while Article 5.1 requires that 
SPS measures be "based on" a risk  assessment, this does not mean that the SPS measures have to 
"conform to" the risk assessment.391   
7.181  Moreover, the risk assessment need not "come to  a monolithic conclusion that coincides with 
the scientific conclusion or view implicit in the SPS measure", nor does the risk assessment have to 
"embody only the view of a majority of the relevant scientific community."392  While recognizing that, 
in most cases, WTO Members "tend to base thei r legislative and administrative measures on 
'mainstream' scientific opinion", the Appellate Body  has observed that, "[i]n other cases, equally 
responsible and representative governments may act in good faith on the basis of what, at a given 
time, may be a divergent opinion coming from qualified and respected sources."393  The Appellate 
Body added that an approach based on a diverg ent opinion from a qualified and respected source, 
"does not necessarily signal the absence of a reasona ble 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 and imminent thr eat to public health and safety."394  
7.182  Finally, we note that the Appellate Body in EC – Hormones determined that "Article 5.1 does 
not insist that a Member that adopts a sanitary m easure shall have carried out its own risk assessment 
                                                      
385 Appellate Body Report, Japan – Apples , para. 202. 
386 Appellate Body Report, US/Canada – Continued Suspension , para. 559. Specifically, in EC – 
Hormones , the Appellate Body concluded that a risk assessment in this instance required not a general 
evaluation of the carcinogenic potential of entire categories of hormones, but rather should include an 
examination of residues of those hormones found in meat derived from cattle to which the hormones had been 
administered for growth promotion purposes. Appellate Body Report, EC – Hormones , para. 200. 
387 Appellate Body Report, Japan – Apples , para. 202. In a footnote, the Appellate Body explained: 
"Indeed, we are of the view that, as a general matter, 'risk' cannot usually be understood only in terms 
of the disease or adverse effects that may result. Rather, an evaluation of risk must connect the possibility of adverse effects with an antecedent or  cause. For example, the abstract refe rence to the 'risk of cancer' has no 
significance, in and of itself, under the SPS Agreement , but when one refers to the 'risk of cancer from smoking 
cigarettes', the particular risk is given content." 
Appellate Body Report, Japan – Apples , at footnote 372. 
388 Appellate Body Report, EC – Hormones , paras. 193-194. 
389 Appellate Body Report, EC – Hormones , para. 193. 
390 Appellate Body Report, EC – Hormones , para. 193. 
391 Appellate Body Report, US/Canada – Continued Suspension , para. 528. 
392 Appellate Body Report, EC – Hormones , para. 194. 
393 Appellate Body Report, EC – Hormones , para. 194. 
394 Appellate Body Report, EC – Hormones , para. 194.  WT/DS392/R 
 Page 125 
 
 
 …  The SPS measure might well find its objective justification in a risk assessment carried out by 
another Member, or an international organization".395   
(c) Whether the United States has conducted a risk assessment and whether Section 727 is based 
on such a risk assessment 
7.183  The Panel will therefore examine whether the United States has based Section 727 on a risk 
assessment.396 
7.184  China argues that the evidence demonstrates that  Section 727 is not based on any risk 
assessment that specifically addresses risks posed by poultry products from China, let alone one that 
meets the requirements of Article 5.1 and 5.2.397  Additionally, China argues that the available 
evidence suggests that Section 727 would not be supported by the likely scientific conclusions of a 
risk assessment consistent with the requirements of the SPS Agreement .398 
7.185  The United States does not dispute that no risk assessment was conducted. In fact, the 
United States has not presented any risk assessment  to this Panel. The United States has merely 
responded to a question from the Panel that there was a scientific basis underlying Section 727 as 
required by Article 2.2 of the SPS Agreement.399 
7.186  In the context of its defence under Artic le XX(b) of the GATT 1994, though, the 
United States does present some evid ence with respect to increased h ealth and safety concerns with 
respect to China.  
7.187  In particular, the United States has argued, in the context of its defence under Article XX(b) 
of the GATT 1994, that China's food safety problems  have been written about at length in reports 
from international organizations and governmental bodi es, and they have also been the subject of 
academic study, such as an Asian Development Bank Policy Note, and some United Nations bodies 
reports, where it was stated that enforcement in Ch ina of food control places an excessive reliance on 
end-product testing with very little u se of auditing as an inspection tool.400  
7.188  The United States also cites to a 2009 USDA re port which elaborates on the problems with 
China's food safety system and cites some of the sp ecific safety risks posed by imports from China401  
The USDA report indicates that China accounts for a disproportionate percentage of import refusals 
resulting from over 50 different types of food safety violations, the most common of which include "general filth, unsafe additives or chemicals, microbi al contamination, inadequate labelling, and lack 
of proper manufacturer registrations."  Additionall y, the USDA report explains some of the problems 
with China's current system for verifying the saf ety of its exports, which failed to detect these 
numerous shipments of unsafe products to the United States.
402  The United States contends that an 
academic study published by Global Health Governance reaches many of the same conclusions, 
expounding at length on some of the problems with  enforcement of China's food safety laws as well 
                                                      
395 Appellate Body Report, EC – Hormones , para. 190, followed by  Panel Report, EC – Approval and 
Marketing of Biotech Products , para. 7.3024. 
396 We understand that it is not our role to conduct our own risk assessment based on scientific 
evidence gathered by us or submitted by the parties during the Panel proceedings. Panel Report, EC – Hormones 
(Canada) , para. 8.104; Panel Report, EC – Hormones  (US), para. 8.101. Likewise, we acknowledge that we are 
not to impose any scientific opinion on the United States. Panel Report,  Australia – Salmon , para. 8.41. 
397 China's first written submission, para. 141. 
398 China's first written submission, para. 142. 
399 United States' response to Panel question No. 114. 
400 United States' first written submission, paras. 50-51. 
401 United States' first written submission, para. 52 citing Exhibit US-24. 
402 United States' first written submission, paras. 53-54 citing Exhibit US-24. WT/DS392/R 
Page 126  
 
 as corruption.
403  The United States stresses that numerous hi gh-profile scandals have threatened the 
health of consumers and have led to bans on products from China.404  
7.189  The United States has drawn our attention to so me other incidents related to China's food 
safety problems that had a direct impact on the United States, including smuggled poultry from China which potentially put consumers at risk for avian influenza.
405   
7.190  The United States also presented China's Minist ry of Health statement in a March 2009 news 
release that "China's food security situation rema ins grim, with high risks and contradictions".406 
7.191  We recall that the Appellate Body has held that  the risk assessment need not be conducted by 
the WTO Member imposing the SPS measure.407  So the fact that some of the studies have not been 
carried out by United States authorities does not mean they cannot constitu te the risk assessment. 
However, the United States has not contended that these various studies form the "risk assessment" 
upon which Section 727 is based. Because the United States has not presented any arguments or evidence to prove the existence of a risk assessment , we can only conclude that the United States has 
not based Section 727 on any risk assessment, whet her conducted by its authorities or by any other 
entity.  
7.192  Having examined the evidence presented by the pa rties, the Panel thus concludes that China 
has made a prima facie case that the United States h as not conducted a risk assessment in respect of 
Section 727, within the terms of Articles 5.1, 5.2 and Annex A(4) of the SPS Agreement . The Panel 
further concludes that the United States has not re butted the presumption of inconsistency. Therefore, 
the Panel finds that Section 727 is not based on a ri sk assessment and is therefore inconsistent with 
the obligations in Article 5.1 and 5.2 of the SPS Agreement.  
(d) Whether Section 727 is based on scientific princi ples and is not maintained without sufficient 
scientific evidence as required by Article 2.2 of the SPS Agreement  
(i) Arguments of the parties 
7.193  China  argues that Section 727 is not based on a ny scientific evidence let alone that which 
would be sufficient to meet the standards of Article 2.2 of the SPS Agreement .
408  Additionally, China 
argues that the legislative history of Section 727 does not indicate that there was any scientific 
evidence underpinning the provision nor does it men tion any specific health th reat posed by Chinese 
poultry products that Section 727 is meant to address.409  
7.194  With respect to the United States' references, in its submission, to newspaper stories and 
USDA reports alleging "contamination" and China's f ood safety crises, China argues that none of this 
evidence is referenced in the JES,  none describes any specific health threat posed by poultry products, 
and none indicates that there has been even one fo od safety crisis related to Chinese poultry. Thus, 
China concludes that for purposes of Articles 2.2 and Article 5.1 claims, these newspaper stories and 
                                                      
403 United States' first written submission, para. 55  citing Exhibit US-25. 
404 United States' first written submission, para. 56. 
405 United States' first written submission, para. 57. 
406 United States' first written submission, para. 58. 
407 Appellate Body Report, EC – Hormones , para. 190, followed by  Panel Report, EC – Approval and 
Marketing of Biotech Products , para. 7.3024. 
408 China's first written submission, paras. 144-147. 
409 China's opening oral statemen t at the first substantive meeting of the Panel, para. 70.  WT/DS392/R 
 Page 127 
 
 
 reports are irrelevant to the question of whether Section 727 was enacted on the basis of specific, 
scientific evidence related to Chinese poultry.410 
7.195  The United States first argues that Section 727, whic h is not a substantive SPS measure 
designed to achieve the United States' ALOP, is not s ubject to the obligation in Article 2.2 to be based 
on scientific principles and not maintained without sufficient scientific evidence.411  Additionally, the 
United States argues that China has failed to ad dress another difficulty in attempting to apply 
Articles 2.2 and 5.1 to the measure at issue, name ly, that the process of determining equivalence for 
an exporting Member's SPS measures is not the sam e as the process of performing a risk assessment 
of products imported from another Member. In particular, the United States notes that: 
"The determination that poultry products po se a risk of being unsafe, and therefore 
that measures are needed to protect against that risk, pre-dates Section 727 and 
applies regardless of origin (whether importe d or domestically produced). Indeed, it is 
not contested in this dispute that imported poultry products can pose a risk of being unsafe."
412   
7.196  The United States argues that evidence of China's food safety crises and enforcement 
problems support Section 727, especially in light of the fact that FSIS's equivalence system places a 
large reliance on the exporting country to enforce its own laws to ensure that the food being exported 
is safe.  The United States produced a number of newspaper articles and publi cations related to avian 
influenza, poultry smuggling, and melamine in chicke n feed.  The United States thus contends that it 
follows scientifically from that evid ence that there was a need to take  additional action to ensure that 
exports from China would be safe.413   
(ii) Analysis by the Panel 
7.197  We start our analysis by looking at the text of Article 2.2 of the SPS Agreement  which reads 
as follows: 
"Members shall ensure that any sanitary or  phytosanitary measure is applied only to 
the extent necessary to protect human, animal or plant life or health, is based on 
scientific principles and is not maintained  without sufficient scientific evidence, 
except as provided for in paragraph 7 of Article 5."414 
7.198  We note that Article 2.2 not only requires that measures be based on scientific principles, but 
that they not be maintained without sufficien t scientific evidence, except as provided for in 
Article 5.7. The Appellate Body has interpreted the ob ligation in Article 2.2 to require that there be a 
rational or objective relationship between the SPS measure and the scientific evidence.415  
                                                      
410 China's opening oral statemen t at the first substantive meeting of the Panel, para. 71. 
411 United States' second written submission, paras. 98-99. 
412 United States' second written submission, para. 100. 
413 United States' response to Panel question No. 114, para. 236. 
414 Article 5.7 of the SPS Agreement  provides for the provisional adoption of SPS measures on the basis 
of available pertinent information, where it is not possible to conduct a full risk assessment. If a Member imposes a measure pursuant to Article 5.7 it is required to seek to obtain additiona l information necessary for a 
more objective assessment of risk and review the sani tary or phytosanitary m easure accordingly within a 
reasonable period of time. We note in this respect th at the United States has not invoked Article 5.7 as a 
justification for why it did not conduct a risk assessment prior to imposing the prohibition on the use of funds 
which prevented the FSIS from establishing or implementing a rule enabling the importation of processed 
poultry products from China into the United States. 
415 Appellate Body Report, Japan – Agricultural Products II , para. 84 upholding the Panel Report, 
Japan – Agricultural Products II , paras. 8.29 and 8.42. WT/DS392/R 
Page 128  
 
 Additionally, the panel in Japan – Apples (Article 21.5 – US) , noted that in order for scientific 
evidence to support a measure sufficiently, it seems l ogical to us that such scientific evidence must 
also be sufficient to demonstrate the existence of  the risk which the measure is supposed to address.
416   
7.199  We also recall that the Appellate Body expl ained that Articles 3.3, 5.1 and 5.7 provide 
relevant context for understanding the extent of the obligation in Article  2.2 not to maintain a measure 
without sufficient scientific evidence.417  We find relevant context in the reference in Article 3.3 to 
"scientific justification" which is defined in the footnote to that Article as "examination and 
evaluation of available scientific information in c onformity with the relevant provisions of this 
Agreement."  It is our understanding, purs uant to the Appellate Body's reasoning in EC – Hormones, 
that this language implies that "scientific justifica tion" is of the nature of a risk assessment required 
under Article 5.1.418 With respect to Article 5.7, which pe rmits provisional measures when there is 
"insufficient scientific evidence", the Appellate Body has reasoned that the relevant scientific 
evidence will be considered "insufficient" for purposes of Article 5.7 "if the body of available 
scientific 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. "419    
7.200  Given the foregoing, it is the Panel's view that  for the United States to maintain Section 727 
with sufficient scientific evidence,  the scientific evidence must bear  a rational relationship to the 
measure, be sufficient to demonstrate the existenc e of the risk which the measure is supposed to 
address, and be of the kind necessary for a risk assessment.420  
7.201  As explained above, in paragraph 7.168, wh ere an SPS measure is not based on a risk 
assessment as required in Article 5.1 and 5.2 of the SPS Agreement , this measure is presumed not to 
be based on scientific principles and to be ma intained without suffici ent scientific evidence.421    
7.202  Additionally, with respect to the evidence the United States refe rs to, we note that while it 
deals generally with food safety issues in China,  it does not specifically address China's poultry 
inspection system.  We also note that the evidence do es not address the existence of the risk which the 
measure is supposed to address.422  The United States has produced a number of newspaper articles 
and publications related to avian influenza, poultr y smuggling, and melamine in chicken feed.  Apart 
from the FSIS reports in the frame work of the equivalence proceed ings, the United States has not 
submitted to the Panel any specific scientific justifi cation, notably through a risk assessment carried 
out according to the principles and disciplines in Article 5 and paragraph 4 of Annex A of the 
SPS Agreement , concerning the risk posed by poultry products from China.  We accept the 
United States' point that the general science on the safety of poultry products was well established 
prior to the imposition of Section 727. However, the evidence referred to by the United States does 
not establish the existence of a risk of consumi ng unsafe poultry from China.  Therefore, the Panel 
finds that the evidence of food safety enforcemen t problems presented by the United States is not 
                                                      
416 Panel Report, Japan – Apples (Article 21.5 – US) , para. 8.45. 
417 Appellate Body Report, Japan – Agricultural Products , paras. 74-80. 
418 Appellate Body Report, EC – Hormones , para. 175. 
419 Appellate Body Report, Japan – Apples, para. 179; Appellate Body Report, US/Canada – Continued 
Suspension, para. 674. 
420 The Panel notes that Article 5.2 of the SPS Agreement  includes relevant scientific evidence as one of 
several factors Members are to take into account in their assessment of the risks. 
421 Appellate Body Report, Australia – Salmon , para. 138; Panel Report, Australia – Salmon 
(Article 21.5 – Canada) , paras. 7.85 and 7.161; and Panel Report, EC – Approval and Marketing of Biotech 
Products , para. 7.3399. 
422 We note that the evidence submitted by the United St ates on China's food sa fety enforcement issues 
does not concern the safety of Chinese pou ltry products. The evidence presented by the United States rather 
refers to other food products such as seafood or pork.  WT/DS392/R 
 Page 129 
 
 
 "sufficient" within the meaning of Article 2.2.423  The Panel thus concludes that Section 727 was 
maintained without sufficient scientif ic evidence in contravention of the obligation in Article 2.2 of 
the SPS Agreement .  
7.203  Hence, having found that Sec tion 727 is not based on a risk assessment in violation of 
Article 5.1 and 5.2 of the SPS Agreement , and further, finding that the United States has not 
maintained Section 727 with sufficient scientific ev idence, the Panel finds that Section 727 is not 
consistent with Article 2.2 of the SPS Agreement . 
(e) Conclusion 
7.204  In the absence of a risk assessment, the Panel fi nds that the Section 727 is inconsistent with 
Article 5.1 and 5.2 of the SPS Agreement  because it is not based on a risk assessment which took into 
account the factors set forth in Article 5.2. Addi tionally, the Panel finds that Section 727 is 
inconsistent with Article 2.2 of the SPS Agreement  because it was maintained without sufficient 
scientific evidence. 
G. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  5.5 OF THE SPS A GREEMENT  
1. Arguments of the parties 
7.205  Relying on the Appellate Body Report in EC – Hormones , China claims that Section 727 is 
inconsistent with Article 5.5 of the SPS Agreement  because the United States applies different ALOPs 
to comparable situations, the application of such different ALOPs is arbitrary and the distinction in 
ALOPs leads to discrimination.424 
7.206  In particular, China claims that Section 727 resulte d in distinctions in levels of protection "in 
different but comparable situations" because the Un ited States imposes a different and stricter ALOP 
to Chinese poultry products compared to other WTO Members' poultry or to Chinese non-poultry 
food products which share a common risk of potential contaminants, namely Salmonella, 
Campylobacter and Listeria. China also refers to E. coli and Highly Pathogenic Avian Influenza 
(HPAI) virus.425 
7.207  With respect to the comparison of Chinese poultry to poultry from other WTO Members, 
China argues that it is one of just ten WTO Member s that have obtained FSIS authorization to export 
poultry to the United States. However, it contends that , under Section 727, its poultry products are, in 
effect, treated as more dangerous than those origin ating in Members that have never obtained an 
equivalence determination from the FSIS. China thus  argues that, regardless of the possibility of 
improving its food safety system for poultry, China is prevented by Section 727 from having such 
authorization considered, granted or implemented.426 
7.208  With respect to the comparison of Chinese pou ltry to other food products from China, China 
notes that neither the text nor the legislative history of Section 727, nor FSIS documentation asserts or 
                                                      
423 The Panel is not, however, sayi ng that evidence of the type adduced by the United States could not 
be considered in an adequate assessment of the risks. Indeed, we recall that the Appellate Body has explained that evidence of risk is not limited to that which is susceptible of quantitative analysis by the empirical or 
experimental laboratory methods commonly associated w ith the physical sciences, but also includes "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 wo rk and die."  Appellate Body Report, EC – Hormones ,  para. 187. 
424 China's comment to the United States ' response to Panel question No. 121. 
425 China's opening oral statement at the second substantive meeting of the Panel para.36-37, China's 
response to Panel question No. 123. 
426 China's first written submission, para. 131. WT/DS392/R 
Page 130  
 
 otherwise provides contemporaneous evidence that poultry  is more likely to be "contaminated" than 
other types of food products.
427  China asserts that these contaminants are within the meaning of 
footnote 4 and are not unique to China as well as not only found in poultry products.428 
7.209  Moreover, China agrees with the United Stat es that its ALOP for poultry is normally 
expressed by Section 466(a) of the PPIA429 of which the implementing regulations are the FSIS 
procedures.430  However, China submits that Section 727 is legally distinct from the PPIA since it 
targets only China. China further cl aims that Section 727 constitutes "less than zero risk" tolerance 
which eliminates any opportunity for only China to  export its poultry to the United States even if 
Chinese poultry had been scientifically confir med to meet the United States' ALOP.431  While on the 
other hand, the ALOP for all other WTO Member s' poultry provided in the FSIS procedures or non-
poultry food products provided in FDA import procedures tolerates some risk as long as the WTO 
Members' inspection system has been deemed equivalent to the US system.432  Therefore, China 
concludes that the ALOP applied to Chinese poultry is  thus "different" from – and much stricter than 
– the ALOP normally applied by the United States for imported poultry.433  
7.210  In response to questions from the Panel, China ad mitted that the relevant point of analysis is 
not whether the FDA measures that are applied to non-poultry products are "different" from the FSIS 
procedures applied to poultry products but rather  whether the difference in ALOPs is arbitrary. 
According to China, the United States has violated Article 5.5 by applying a different and much stricter ALOP to Chinese poultry (compared to pou ltry from other countries, or compared to other 
non-poultry Chinese products) which share common risk of potential contamination
434 without 
scientific or other justification.435  China argues that Section 727 was not necessary to ensure the 
compliance with the US ALOP because Section 727 prevents the only US Government employees 
capable of evaluating the safety of Chinese poultry products by means of budget restriction from conducting scientific audits, investigatio ns and rule making in and for China.
436 
7.211  China further argues that the dis tinction in ALOPs is arbitrary.437 China submits that there is 
no legitimate justification why the FSIS procedures ca nnot be applied to China to determine whether 
its poultry products may be exported to the United St ates. China contends that given the absence of 
any scientific evidence or risk assessment, th e United States has provided no publicly available 
justification for applying such a disparate level of sanitary protection to China.  
7.212  China argues that, by forbidding the consid eration, granting or implementation of 
authorization for Chinese poultry products, while  offering the possibility to every other WTO 
Member to seek and obtain FSIS authorization to  export poultry products to the United States, 
Section 727 discriminates against China.438  China further argues that th e distinction in ALOPs leads 
to discrimination because Section 727 blocks the importation of only Chinese poultry while other Chinese food products posing the same health risks may be imported.
439   
                                                      
427 China's opening oral statemen t at the first substantive meeting of the Panel, para. 55. 
428 China's response to Panel question No. 123. 
429 China refers to 21 USC §466 which is where the PPIA is codified. 
430 China's response to Panel question No. 116. 
431 China's response to Panel question No. 116. 
432 China's responses to Panel questions Nos. 117 and 124. 
433 China's response to Panel question No. 116. 
434 China's response to Panel question No. 123. 
435 China's response to Panel question No. 123. 
436 China's comment to the United States ' response to Panel question No. 121. 
437 China's first written submission, para. 132. 
438 China's first written submission, para. 121. 
439 China's comment to the United States ' response to Panel question No. 121.  WT/DS392/R 
 Page 131 
 
 
 7.213  The United States  contends that, for both situations, Ch ina has not demonstrated a difference 
in the ALOPs applied. The United States submits th at there is only one ALOP and thus there is no 
distinction in its ALOP for poultry from China as opposed to that of the United States or other WTO  Members.
440  Moreover, the United States argues that Section 727 does not impose an "import ban" or  
preclude a finding of equivalence on Chinese poultry; ra ther it is just a procedural measure meant to 
ensure that China's food safety problems are fu lly considered in the process of determining 
equivalence due to the heightened risk posed by Chinese poultry.441  The United States explains that 
the FSIS operates under an equivalence regime wh ile the FDA relies on "import alerts" and more 
rigorous border measures so such a comparison is inappropriate.442 
7.214  With respect to China's comparison of Chinese poultry to other food products from China, the 
United States asserts that China has not established that the types of risks addressed by the PPIA are 
the same as the risks associated with other types of food products and that poultry has a different 
ALOP than other food products.443  
7.215  The United States further argues that China has not put forward an argument showing that the 
alleged distinction in ALOPs results in interna tional trade discrimination and that China has not 
established that any distinction in ALOPs is arbitrary or unjustifiable.444 
7.216  The United States points out that China's food safety enforcement problems and food safety 
crises have been the subject of reports and articles by numerous well-regarded international 
organizations (including the WHO) and academics.445 Moreover, to justify whether there was 
discrimination in an arbitrary and unjustifia ble manner between China and other WTO Members 
because of Section 727, the United States contends  that China's proposed situations are not 
comparable to other WTO Members.  This is because the United States argues, first, most Members 
have never attempted to export p oultry  products to United States; second, many of the equivalent 
WTO Members have been exporting to the United States for many years without any significant incident resulting in confidence and familiarity with  their inspection system including their ability to 
resolve any problems that may ari se such as in the case of Mexico.
446   
2. Analysis by the Panel 
7.217  We are therefore called upon to examine whether Section 727 is inconsis tent with Article 5.5 
of the SPS Agreement . We shall start by looking at the text of Article 5.5 of the SPS Agreement  and 
how it has been interpreted by previ ous panels and the Appellate Body. 
(a) Article 5.5 of the SPS Agreement  
7.218  Article 5.5 of the SPS Agreement  embodies a non-discrimination principle in respect of the 
application of the appropriate level of sanitary or phytosanitary protection ("ALOP"). This provision 
reads as follows: 
                                                      
440 United States' response to Panel question No. 120. 
441 United States' comment to China's response to Panel question No. 116 and United States' response 
to Panel question No. 118. 
442 United States' comment to China's response to Panel question No. 124. 
443 United States' response to Panel question No. 121. 
444 China's comment to the United States ' response to Panel question No. 121. 
445 United States' opening oral statement at the sec ond substantive meeting of the Panel, paras. 39 
and 42. 
446 United States' opening oral statem ent at the second subs tantive meeting of the Panel, paras. 43-44 
and 48. WT/DS392/R 
Page 132  
 
 "With the objective of achieving consistency in the application of the concept of 
appropriate level of sanitary and phytosanita ry protection against risks to human life 
or health, or to animal and plant life or health, each Member shall avoid arbitrary or 
unjustifiable distinctions in the levels it considers to be appr opriate in different 
situations, if such distinctions result in discrimination or a disguised restriction on 
international trade." 
7.219  Annex A(5) further defines the concept of ALOP as "the level of protection deemed 
appropriate by the Member establishing a sanitary or  phytosanitary measure to protect human, animal 
or plant life or health within its territory".  
7.220  We note that the Appellate Body has explained that there is an implicit obligation for 
Members to determine their ALOP.
447 Although it need not be determ ined in quantitative terms, the 
ALOP cannot be determined "with such vagueness or equivocation that the application of the relevant 
provisions of the SPS Agreement  ... becomes impossible".448 Precisely, the Appellate Body has ruled 
that if a Member fails to determine its ALOP, or does so with insufficient precision, then the ALOP 
"may be established by [the panel] on the basis of the level of protection reflected in the SPS measure 
actually applied."449   
7.221  The Appellate Body in EC – Hormones  identified three conditions that must all be satisfied in 
order to establish a violation of Article 5.5 of the SPS Agreement , which are that: (i) the Member has 
set different levels of protection in "different situa tions"; (ii) the levels of protection show "arbitrary 
or unjustifiable" differences in their treatment of different situations; and (iii) these arbitrary or 
unjustifiable differences lead to "discrimination or disguised restrictions" on trade.450 
7.222  Additionally, we note that the panel in EC – Hormones held that "in order to give effect to all 
three elements contained in Article 5.5 and giving  full meaning to the text and context of this 
provision, we consider that all three elements n eed to be distinguished and addressed separately."451  
We also note that the panel on Australia – Salmon (Article 21.5 – Canada) held that the complainant 
"bears the burden of demonstrating that the compar isons it refers to meet all three elements under 
Article 5.5."452 
7.223  The Panel must therefore determine whether Chin a has met its burden of proof with respect to 
its claim of violation of Article 5.5 of the SPS Agreement . Our first step will be to ascertain whether 
China has presented any such comparisons to demonstr ate that the three elements of Article 5.5 are 
met. In this respect, we note that China has pr esented two possible comparisons: (i) a comparison of 
Chinese poultry vis-à-vis  poultry from other WTO Members and (ii) a comparison of Chinese poultry 
vis-à-vis  other Chinese food products.  
7.224  We will address whether each of the three elemen ts are satisfied for each of the comparisons 
China refers to, in turn.  
                                                      
447 Appellate Body Report, Australia – Salmon , para. 206. 
448 Appellate Body Report, Australia – Salmon , para. 206. 
449 Appellate Body Report, Australia – Salmon, para. 207. 
450 Appellate Body Report, EC – Hormones, paras. 214-215. 
451 Panel Report, EC – Hormones (Canada) , para. 8.187. 
452 Panel Report, Australia – Salmon (Article 21.5 – Canada) , para. 7.88.  WT/DS392/R 
 Page 133 
 
 
 (b) The importation of Chinese poultry products vis-à-vis  that of poultry products from other 
WTO Members 
(i) Whether Section 727 results in distinctions in  ALOPS in different yet comparable situations 
7.225  As we explained above, the Appellate Body has id entified the first of the three elements to be 
assessed under Article 5.5 of the SPS Agreement  as "the Member imposing the measure complained 
of has adopted its own appropriate le vels of sanitary protection against risks to human life or health in 
several different situations."453  Thus, the first element of Article 5.5 appears to have two, closely 
related aspects:  (1) the existence of different situ ations; and (2) and the existence of different ALOPs 
in such situations. 
7.226  The Appellate Body, in EC—Hormones,  noted that, although the situations must be 
"different", the situations exhibiting differing leve ls of protection cannot, of course, be compared 
unless they are comparable, that is, unless they pr esent some common element or elements sufficient 
to render them comparable.454 According to the Appellate Body, if the situations proposed to be 
examined are totally  different from one another, they woul d not be rationally comparable and the 
differences in ALOP cannot be examined for arbitrariness. 455 
7.227  We note that several panels have addressed  the question of what constitutes "common 
elements" or "elements sufficient to render" th e different situations comparable. The panel in EC – 
Hormones , for example, considered that for the pur poses of its dispute, which dealt with an 
SPS measure to protect human health from contaminants in food, "different" yet comparable situations in the sense of Article 5.5 were those wh ere the same substance or the same adverse health 
effect is involved.
456 
7.228  With respect to an SPS measure imposed to protect  plant or animal life or health from pests or 
disease, the Appellate Body in Australia – Salmon held that a "common element" can be " either  a risk 
of entry, establishment or spread of the same or a similar disease, or a risk of the same or similar 
associated potential biological and economic consequences.457 
7.229   We shall therefore examine whether poultry products from China and poultry products from 
other WTO Members are such "different situations " that are comparable. If we conclude in the 
affirmative, we will then examine whether the United  States has made distinctions in ALOPs in that 
"different situation". 
Whether different yet comparable situations exist  
7.230  The Panel therefore needs to decide whether we agree with China that the importation of 
Chinese poultry products and that of poultry produc ts from other WTO Members are two different but 
comparable situations within the meaning of Article 5.5 of the SPS Agreement .  
7.231  China argues that the establishment or implementation of a rule allowing importation cannot 
occur while the funding restriction remains in place, whereas other WTO Members may (if their 
                                                      
453 Appellate Body Report, EC – Hormones , paras. 214-218; see also Appellate Body Report, Australia 
– Salmon , paras. 140, 143 citing  Panel Report, Australia – Salmon , para. 8.108. 
454 Appellate Body Report, EC – Hormones , para. 217. 
455 Appellate Body Report, EC – Hormones , para. 217. 
456 Panel Report, EC – Hormones , para. 8.176 also referenced in Appellate Body Report, EC – 
Hormones , para. 217. 
457 Appellate Body Report, Australia – Salmon, para. 146 (emphasis in original); confirmed by  
Document G/SPS/15, Committee on Sanitary and Phytosanita ry Measures, Guidelines to Further the Practical 
Implementation of Article 5.5, 18 July 2000, para. A.2. WT/DS392/R 
Page 134  
 
 regimes are deemed equivalent by FSIS) have a ru le established and implemen ted allowing imports of 
poultry products into the United States from those Members. Therefore, according to China, poultry 
products from China, which are subject to Section 727, is a "different situation"  within the meaning of 
Article 5.5 of the SPS Agreement to poultry products from other WTO members, who have access to 
the regular FSIS procedures. In respect to the United States' position that there are no different 
situations since the ALOP is the same, China di sagrees with the United Stat es' narrow interpretation 
of "different situations" by quoti ng the Appellate Body decision in Australia – Salmon  stating 
different situations may be compared if they have just one risk factor in common.
458 
7.232  The United States  argues that there is no distinction in its ALOP for poultry from China as 
opposed to that of the United States or other WT O Members and therefore there is no "different 
situation".459  
7.233  We recall that Section 727 specifically provides that "[n]one of the funds made available in 
this Act may be used to establish or implement a rule allowing poultry products to be imported into 
the United States from the People's Republic of China " (emphasis added). It is thus clear that the 
funding restriction imposed through Section 727 applies only to poultry products from China, and not 
to poultry products from other WTO Members. Hence,  the funding restriction in Section 727 results in 
a differentiation being made between the measure applied to poultry products from China, i.e. 
Section 727, vis-à-vis  the measures applied to poultry products from other WTO Members, i.e. FSIS 
procedures. We therefore agree with China that the importation of Chinese poultry products and that 
of poultry products of other WTO Me mbers qualify as different situations. 
7.234  In addition to being different, though, we reca ll that the Appellate Body has called for the 
situations to be comparable. In this respect , China identifies the common element between its 
"different" situations as the risk of the sam e contaminants being present in the poultry.460 To that end, 
China references some of the pathogenic bacteria noted by the United States in its defence under 
Article XX(b) of the GATT 1994, most notably  Salmonella, Campylobacter and Listeria.461 Based on 
China's answers to our questions462, we understand that China believes that the purpose of Section 727 
is to protect human health from contaminants  in food as defined by Annex A(1)(b).  
7.235  We note that the crux of the United States' arguments seems to be that Section 727 is a 
supplement to the PPIA and is meant to further its goals of ensuring that poultry is wholesome, 
unadulterated, and fit for human c onsumption. We further note that the three pathogenic bacteria 
identified by China are not only identified by the Un ited States as a concern with respect to Chinese 
                                                      
458 China's comment to the United States ' response to Panel question No. 120. 
459 United States' response to Panel question No. 120. 
460 China's response to Panel question No. 47. 
461 During the second substantive meeting, the Panel asked China whether what China had identified as 
the common element – Salmonella , Campylobacter , and Listeria , would not rather be "disease causing 
organisms", which are also addressed by the definition of SPS measures in Annex A(1)(b), instead of 
"contaminants", as defined in footnote 4. This footnote provides that "'contaminants' include pesticide and veterinary drug residues and extraneous matter." China explained to the Panel that its argument is that 
Salmonella , Campylobacter , and Listeria  are pathogenic bacteria that can be considered as "extraneous matter" 
within the scope of the definition of contaminants under footnote 4. For China, "ext raneous" means "of external 
origin, introduced or added from without; foreign to the object to which it is attached or which contains it". 
China, nevertheless, argued that, in the alternative, pa thogenic bacteria may also be considered as disease-
causing organism. See China's response to Panel question No. 123. 
Because both "disease causing organisms" and "con taminants" are addressed in the definition of 
SPS measures in Annex A(1)(b), the Panel accepts that Ch ina has identified as a common element the risk of 
Salmonella , Campylobacter , and Listeria  being present in the poultry, irrespective of their classification as 
contaminants or disease-causing organisms. 
462 China's response to Panel questions Nos. 42(d) and 43.  WT/DS392/R 
 Page 135 
 
 
 poultry products, but are also identified as a basi s for the implementation of the PPIA regime as a 
whole.  
7.236  We therefore agree that the risk of Salmonell a, Campylobacter and Listeria being present in 
respect to both the poultry products from Chin a and those from other WTO Members makes the 
different situations – the importation of poultry products from China vis-à-vis  that of poultry products 
from other WTO Members – comparable for the purposes of Article 5.5 of the SPS Agreement .463  
7.237  The Panel therefore concludes that the importation of Chinese poultry products is a different 
yet comparable situation to that of poultry pr oducts from other WTO Members. Having made this 
conclusion, and as explained by the Appellate Body in EC – Hormones , the Panel now turns to 
consider whether the United States has applied di stinctions in ALOPs in these two different yet 
comparable situations. 
Whether distinctions in ALOPs exist  
7.238  The second aspect of the first element of Article 5.5 of the SPS Agreement  thus refers to the 
existence of different ALOPs being applied in different but comparable situations.  
7.239  We note that the Appellate Body in EC – Hormones , stated that "[c]learly, comparison of 
several  levels of sanitary protection deemed appropriate by a Member is necessary if a panel's inquiry 
under Article 5.5 is to proceed at all."464 The Appellate Body also refe rred to "situations exhibiting 
differing levels of protection ."465 Finally, the panel in Australia – Salmon reasoned that a substantial 
difference in the measures applied could reflect a di stinction in the ALOPs applied in two different 
but comparable situations.466 
7.240  We recall that China  claims that Section 727 constitut es "less than zero risk" tolerance which 
eliminates any opportunity for only China to export its poultry products to the United States, even if 
Chinese poultry had been scientifically confir med to meet the United States' ALOP.467 While on the 
other hand, the ALOP for all other WTO Members'  poultry provided in the FSIS procedures tolerates 
some risk as long as the specific WT O Member's inspection system has been deemed equivalent to the 
US system.468  Therefore, China concludes that the ALOP applied to Chinese poultry is thus 
"different" from – and much stricter than – th e ALOP normally applied by the United States for 
imported poultry.469  China submits that Section 727 was not  necessary to ensure the compliance with 
the United States' ALOP since Section 727 prevents  the only US Government employees capable of 
                                                      
463 Additionally, the Panel takes note that China has made significant arguments with respect to Avian 
Influenza without specifically identifying it as one of the "common elements" which may render different 
situations comparable or by alleging that Section 727 satisfies the definitions of an SPS measure set forth in Annex A(1)(a) or (c) (China's opening oral statement at the second substantive meeting of the Panel paras. 36-
37, China's response to Panel question No. 123, paras. 90  and 93). China has therefore not specifically identified 
how the two situations – the importation of poultry products from China vis-à-vis  that of poultry products from 
other WTO Members – involve a risk of entry, establishment or spread of the same or a similar disease, or a risk 
of the same or similar associated potential biological and economic consequences, as would be required for an 
SPS measure consistent with the defin ition in Annex A(1)(a) or (c). Theref ore, the Panel is not taking into 
account China's arguments on this poin t in its analysis of whether the mentioned different situations are 
comparable. 
464 Appellate Body Report, EC – Hormones , para. 217. 
465 Appellate Body Report, EC – Hormones , paras. 215 and 217. 
466 Panel Report, Australia – Salmon , paras. 8.123-8.124, 8.129. 
467 China's response to Panel question No. 116. 
468 China's response to Panel question No. 117. 
469 China's response to Panel question No. 116. WT/DS392/R 
Page 136  
 
 evaluating the safety of Chinese poultry products  by means of budget restriction from conducting 
scientific audits, investigations and rule making in and for China.
470 
7.241  The United States disagrees and argues that China is confusing the ALOP with the measures 
applied and that the PPIA sets the same ALOP for a ll poultry; it is just that the ALOP for poultry is 
achieved through a different mechanism, Section 727, with respect to China.471 The United States 
submits that Section 727 does not impose an "import ban" or preclude a finding of equivalence on 
Chinese poultry; rather it is a procedural measure meant to ensure that China's food safety problems 
are fully considered in the process of determining equivalence due to the heightened risk posed by 
Chinese poultry.472   
7.242  We therefore need to asses whether the United Stat es is applying a different ALOP to imports 
of poultry products from China than the ALOP it app lies to imports of poultry products from other 
WTO Members. In this respect, the United Stat es has identified a single ALOP for all poultry 
products as set forth in Section 466 of the PPIA as follows:  
"The PPIA contains a more specific definition with regard to slaughtered poultry, 
which states that 'no slaughtered poultry, or parts or products thereof, of any kind 
shall be imported into the United States unl ess they are healthful, wholesome, fit for 
human food, not adulterated, and contai n no dye, chemical, preservative, or 
ingredient which renders them unhealthful,  un wholesome, adulterated, or unfit for 
human food.'  PPIA, Sec. 466 (Exhibit CN-04)."473   
7.243  The essence of the United States' requirement is  that all poultry products must be "safe".474  
China agrees with the United States that its ALOP for poultry is normally expressed by Section 466 of 
the PPIA of which implementing regulations are the FSIS procedures475 but argues that Section 727 is 
legally distinct from the PPIA because it targets only China. 
7.244  The Panel recognizes that the United States is fre e to decide its own ALOP and thus accepts 
that the United States' ALOP for poultry, in genera l, is embodied in Section 466 of the PPIA. This 
however does not mean that we will not examine whether the ALOP actually being applied by the 
United States to poultry products from China differs fro m that in the PPIA. We note that the Appellate 
Body in Australia – Salmon explained that a panel may deduce an unexpressed ALOP from the 
measure being applied.476 In our view, even in a case where a Member has expressed a particular 
ALOP, a panel should nevertheless examine the measur e in question to determine whether that ALOP 
is the one actually being applied via that measu re. To ignore the measure and rely solely on a 
Member's declared ALOP could permit a Member to evade the disciplines of Article 5.5 by simply 
declaring one generic ALOP for all SPS-related matters.477   
7.245  The United States correctly notes that the panel in Australia – Salmon concluded that the 
application of different measures does not necessarily m ean that there is an application of different 
                                                      
470 China's comment to the United States ' response to Panel question No. 118. 
471 United States' response to Panel question No. 49. 
472 United States' comment to China's response to Panel question No. 116 and United States' response 
to Panel question No. 118. 
473 United States' second written submission, footnote 59. 
474 United States' second written submission, para. 62. 
475 China's response to Panel question No. 16. 
476 Appellate Body Report, Australia – Salmon, para. 207. 
477 We do not mean to infer that the United States has attempted to hide behind a generic ALOP in this 
case. However, we believe that we cannot ignore Section 727 in our analysis of what ALOP is being achieved 
through the measure itself.  WT/DS392/R 
 Page 137 
 
 
 ALOPs.478  However, the United States cannot exp ect the Panel to completely divorce the 
determination of whether different ALOPs are be ing applied from the measures adopted. As noted 
above, substantial differences in the SPS measures app licable in different yet comparable situations 
may demonstrate that the ALOPs are different.479   
7.246  We will therefore assess whether we can dedu ce from the measures applied – Section 727 vis-
à-vis  FSIS procedures – different ALOPs for poultry products from China and poultry products from 
other WTO Members. To that end, the Panel will de termine whether the differences in those measures 
are substantial. 
7.247  Through the PPIA, the United States prohibits the importation of poultry from any WTO 
Member who cannot affirmatively demonstrate that it s internal SPS measures result in the equivalent 
ALOP applied to domestic US poultry, i.e. the AL OP expressed in the quotation from Section 466 of 
the PPIA above. Through Section 727, the US Congress prohibited the FSIS from establishing or implementing a rule allowing the importation of poul try from China because it had concluded that the 
poultry was not "safe" within the meaning set forth in the PPIA. Therefore, it could be concluded that the same ALOP is applied in both measures.  
7.248  However, while both measures – Section 727 vis-à-vis  the FSIS procedures – result in a 
prohibition on the importation of poultry products  that the United States fears may be "unsafe", 
Section 727 prohibits not only the importation of a llegedly "unsafe" poultry, it also prohibits one 
branch of the US Government establishing or implementing a rule permitting the importation of poultry products from China. Such a prohibition is not applied to any other WTO Member. China argues that it is this prohibition which demonstrates  that a different ALOP is applied to its poultry 
products. For China, the FSIS procedures allow for some  minimal and inherent risk that contaminated 
poultry could enter the United States
480 and it compares this acceptance of some risk with 
Section 727's prohibition on China obtaining FSIS approval to export poultry to the United States. China argues that pursuant to Section 727, "[e]ven if China's food safety regime could guarantee 100% safety for all Chinese poultry, Section 727 would still prevent China from obtaining FSIS 
approval to export poultry to the United States."
481 
7.249  We acknowledge that an import ban does not necessarily reflect a different ALOP than an 
equivalence regime, as even an import ban accepts some  minimal and inherent risk that contaminated 
poultry could enter the United States. Ho wever, we do note that the panel in Australia – Salmon found 
that an import ban for salmon was substantially  different from permitting the importation of 
ornamental fish after control and therefore reflected a difference in the levels of protection considered 
                                                      
478 In particular, the panel in Australia – Salmon  concluded that: 
"[T]he level of protection achieved by a specific sanitary measure will also depend on the degree of 
risk against which that measure is intended to protect. In that sense,… imposing the same sanitary measure for 
different situations does not necessarily result in the same  level of protection. Indeed, in many situations (e.g., 
situations representing different risks) the same sanitary measure might result in different levels of protection. 
On the other hand, different sanitary measures for different  situations might ensure the same level of protection. 
Indeed, one given situation might only represent a small ri sk for which a lenient sanitary measure will achieve a 
high level of protection, whereas another situation might pose very high risks requiring a very strict and 
different sanitary measure in order to meet that same high level of protection."  
Panel Report, Australia – Salmon , para. 8.123. 
479 Panel Report, Australia – Salmon , para. 8.129; See also Appellate Body Report, Australia – Salmon , 
para. 232. 
480 Specifically, China argues that "although the FSIS procedures are extensive, their application 
nevertheless involves some minimal and inherent risk that contaminated poultry could enter the United States. 
This is because, even if a country has been deemed equi valent, there is some minima l risk that it could export 
unsafe poultry to the United States."  China's response to Panel question No. 48. 
481 China's response to Panel question No. 48. WT/DS392/R 
Page 138  
 
 to be appropriate in the sense of the first element of Article 5.5.
482  We find similarities in the present 
dispute to the one examined by the panel in Australia – Salmon. The regular FSIS procedures prohibit 
importation of poultry products from a particular country  only until that country has demonstrated that 
its SPS measures can achieve the ALOP expressed in the PPIA. However, the effect of Section 727 
was to prohibit the importation of poultry from Chin a in any instance, regardless of whether China 
demonstrated that its own SPS measures could ac hieve the ALOP expressed in the PPIA. The 
absolute import ban imposed by Section 727 refl ects an ALOP substantially different from the 
conditional import ban under the regular FSIS pro cedures, because the regular FSIS procedures at 
least allow an avenue for an exporting Member to gain access to the United States market, which is  
not available in any case for Chinese poultry products. 
7.250  We agree with the panel in Australia – Salmon that the determination of the ALOP is not 
dependent on the performance of a risk assessment.483 However, the Panel is of the view that to prove 
that such substantially different measures were n eeded to achieve the same ALOP, the United States 
would have to demonstrate that poultry products  from China presented a greater risk than poultry 
products from other WTO Members.  
7.251  The United States attempts to meet its burden  by pointing out that no other WTO Members 
with the same systemic issues with respect to f ood safety were as far along in the equivalency process 
as China. Therefore, according to the United States,  the measures applied to China were necessary to 
achieve the ALOP set forth in the PPIA that poul try imports be "safe". The United States seems to 
leave open the option that if the FSIS was about to  establish or implement a rule permitting another 
country with the same systemic issues exhibited in  China to import poultry products, the US Congress 
would have contemplated similar action. However, the Panel considers this to be a purely speculative 
argument.  
7.252  To counter this premise, China notes that Mexico had similar systemic problems yet the US 
Congress did not step in and order the FSIS to suspe nd Mexico's equivalency st atus or deny funding 
for the regular annual equivalency audits necessary to ma intain Mexico's status as eligible to export to 
the United States.484 
7.253  In our view, as the panel in Australia – Salmon reasoned, a substantial difference in the 
measures applied such as, in this case, Section 727 versus  standard FSIS procedures, do reflect a 
distinction in the ALOPs applied in two different but comparable situations; i.e. the importation of 
poultry products from China and that of poultry products from other WTO Members.485  We therefore 
find that the standard FSIS procedures are so substa ntially different from Section 727 such that they 
reflect a distinction in ALOPs.  
Conclusion  
7.254  Having found that the importation of poultry products from China and that of poultry 
products from other WTO Members are different yet co mparable situations and that the United States 
is applying different ALOPs to such situations, we co nclude that the first element of Article 5.5 of the 
SPS Agreement  is satisfied, with respect to this compar ison. Therefore, we will proceed with our 
analysis of whether the distinction in ALOPs is arbitrary or unjustifiable. 
                                                      
482 Panel Report, Australia – Salmon , para. 8.129; See also Appellate Body Report, Australia – Salmon , 
para. 232. 
483 Panel Report, Australia – Salmon , paras. 8.125-8.126. 
484 China's response to Panel question No. 48. 
485 Panel Report, Australia – Salmon , paras. 8.123-8.124 and 8.129.  WT/DS392/R 
 Page 139 
 
 
 (ii) Arbitrary or unjustifiable differences in ALOPs 
7.255  We recall that the second element of Article 5.5 involves the consideration of whether there is 
an "arbitrary or unjustifiable" dis tinction between the relevant ALOPs.486   
7.256  In this respect, China  argues that it is one of just ten WTO Members that have obtained the 
FSIS authorization to export poultry to the United St ates. However, it contends, under Section 727, its 
poultry products are, in effect, treated as more dangerous than those originating in WTO Members 
that have never obtained an equi valence determination from the FSIS. Regardless of the possibility of 
China improving its food safety system for poultry, it  says, it is prevented by Section 727 from having 
such authorization considered, granted or implemented.487 China further argues that there is no 
legitimate justification why the FSIS procedures cannot  be applied to China to determine whether its 
poultry products may be exported to the United States and thus, the distinction in levels of sanitary 
protection is arbitrary and unjustifiable.488 
7.257  The United States  responds that China has not establishe d that any distinction in ALOPs is 
arbitrary or unjustifiable.489 The United States points out that China's food safety enforcement 
problems and food safety crises have been the subject of reports and articles by numerous well-
regarded international organizations (including WHO) and academicians.490 Moreover, to justify 
whether there was discrimination between China an d other WTO Members because of Section 727 in 
an arbitrary and unjustifiable manner, the United St ates contends that China's proposed situations are 
not comparable to other WTO Members. This is beca use, in its view, first, most Members have never 
attempted to export poultry prod ucts to United States; and second, many of the equivalent WTO 
Members had been exporting to the United States for many years without a significant incident 
resulting in confidence and familiarity with thei r inspection system. This includes the ability to 
resolve any problems that may ari se, such as in the case of Mexico.491   
7.258  The Panel will therefore need to assess whether there is an  arbitrary or unjustifiable 
distinction between the ALOPs that the United States  applies to poultry products from China, on the 
one hand, and poultry products from other WTO Members, on the other.  
7.259  In examining the terms "arbitrary or unjustif iable", we recall the customary rules of 
interpretation set out in the VCLT. Article 31 of the VCLT prescribes that a treaty has to be 
interpreted "in good faith in accord ance with the ordinary meaning to be given to the terms of the 
treaty in their context and in the light of its object  and purpose." The starting point for determining the 
ordinary meaning of the terms is, of course, the dictionary. A dictionary definition of the term 
"arbitrary" is "based on mere opinion or preference as opp. to the real nature of things, capricious, 
unpredictable, inconsistent."492  In turn, the term "unjustifiable" is defined as "not justifiable, 
indefensible", with "justifiable" meaning "[c]apable of being legally or morally  justified, or shown to 
be just, righteous, or innocent; defensible"493 and "[c]apable of being ma intained, defended, or made 
good."494 
                                                      
486 See, for example, the Appellate Body Report, EC – Hormones , para. 214. 
487 China's first written submission, para. 131. 
488 China's first written submission, para. 132. 
489 United States' response to Panel question No. 121. 
490 United States' opening oral statement at the sec ond substantive meeting of the Panel, paras. 39 
and 42. 
491 United States' opening oral statem ent at the second subs tantive meeting of the Panel, paras. 43-44 
and 48. 
492 Oxford English Dictionary Online, accessed on 29 August 2008. 
493 Oxford English Dictionary Online, accessed on 29 August 2008. 
494 Oxford English Dictionary Online, accessed on 29 August 2008. WT/DS392/R 
Page 140  
 
 7.260  The Appellate Body has also clarified that its fi ndings with respect to the ordinary meaning of 
"arbitrary or unjustifiable" from the chapeau of Article XX of the GATT 1994  are relevant and 
provide guidance in interpreting the terms "arbitrary or unjustifiable discrimination" in Article 2.3 of 
the SPS Agreement . Although the Appellate Body's conclusions were with respect of the use of the 
terms in Article 2.3
495, we believe that they are equally releva nt for an interpretation of the obligation 
in Article 5.5 which is, after all, a more specifi c enunciation of the basic obligation in Article 2.3.496    
7.261  Turning, therefore, to the prior reasoning on the chapeau  of Article XX of the GATT 1994, 
we note that the Appellate Body Reports in US – Gasoline , US – Shrimp , and US – Shrimp 
(Article 21.5 – Malaysia)  show that the analysis of whether th e application of a measure results in 
arbitrary or unjustifiable discrimination should fo cus on the cause of the discrimination, or the 
rationale put forward to explain its existence.497 In Brazil – Retreaded Tyres , the Appellate Body's 
analysis of the measures at issue under the chapeau  of Article XX focused on whether discrimination 
that might result from the application of the measures at issue had a legitimate cause or rationale in 
the light of the objectives listed in the paragraphs of Article XX.498 Futher, the Appellate Body 
explained that the assessment of whether discriminati on is "arbitrary or unjus tifiable" should be made 
in light of the objectives of the measure and whethe r the discrimination bears a rational connection to 
the stated objective of the measure.499 It is important thus to remember that not all discrimination in 
the application of measures is necessarily "arbitrar y or unjustifiable" and it is only the arbitrary or 
unjustifiable inconsistencies that are to be avoided.500   
7.262  Following the analysis conducted under the chapeau  of Article XX, we must focus on the 
justification for the distinction and whether that justification bears a rational relationship to the 
objective of the measures. In this line, we agree with the panel in Australia – Salmon  when, in 
assessing the second element of Article 5.5 of the SPS Agreement , looked at the measures applied in 
the specific context of the relevant risks and asserted that if there is no justification for the distinction 
in sanitary measures and corresponding levels of protec tion, this distinction could be considered to be 
"arbitrary or unjustifiable" in the sense  of the second element of Article 5.5.501  These findings were 
later upheld by the Appellate Body.502   
                                                      
495 Appellate Body Report, Brazil – Retreaded Tyres , para. 227; see also Appellate Body Report, 
Australia – Salmon , para. 251 (recognizing that Article 2.3 assembles obligations similar to those arising under 
Article I:1 and Article III:4 of the GATT 1994 and that it in corporates part of the chapeau to Article XX of the 
GATT 1994.) 
496 We do recognize that Article 5.5 refers to "arb itrary or unjustifiable di stinctions" in the ALOPs 
whereas Article 2.3 and the chapeau of Article XX refer to "arbitrary or unjustifiabl e discrimination". However, 
we also recognize that this "distinction" is only forbidde n if it results in discrimination or a disguised restriction 
on trade. 
497 Appellate Body Report, Brazil – Retreaded Tyres , para. 226. 
498 Appellate Body Report, Brazil – Retreaded Tyres,  para. 225. 
499 Appellate Body Report, Brazil – Retreaded Tyres , para. 227. 
500 The Appellate Body in EC – Hormones clarified that: "We think, too, that the goal set is not 
absolute or perfect consistency, since governments establish their appropriate levels of protection frequently on 
an ad hoc  basis and over time, as different risks present them selves at different times. It is only arbitrary or 
unjustifiable inconsistencies that are to be avoided."  Appellate Body Report, EC – Hormones , para. 213. 
501 Panel Report,  Australia – Salmon , para. 8.133. "[W]e… recall that Australia effectively bans the 
import of the salmon products further examined, but allows the import of the other four categories of fish or fish products. It might, therefore, be expected that some jus tification for this distinction in sanitary measures and 
corresponding levels of protection exists, such as a higher  risk related to imports of the salmon products further 
examined. If not, these distinctions could be considered to be 'arbitrary or unjustifiable' in the sense of the 
second element of Article 5.5." 
502 Appellate Body Report, Australia – Salmon , para. 158.  WT/DS392/R 
 Page 141 
 
 
 7.263  Given that the measures involved in the comparison – Section 727 and the FSIS procedures – 
are SPS measures503, and must therefore necessarily be based on scientific principles and not 
maintained without sufficient scientific  evidence, we are of the view th at the scientific support, or lack 
thereof, for the difference between the ALOPs the measures seek to achieve should have a bearing on 
an analysis of whether such a difference is ar bitrary or unjustifiable under Article 5.5 of the 
SPS Agreement . Indeed, in the context of Article 5.5 to show that the distinction in ALOPs is not 
arbitrary or unjustifiable, a Member must demonstrate that there are differing levels of risk between the comparable situations. We are of the view that  such a demonstration requires scientific evidence.  
7.264  We shall therefore examine whether there is an y justification based on scientific evidence for 
the distinction in ALOPs achieved by the measures used to address the risk of potentially unsafe 
poultry – Section 727 for poultry products from China and the FSIS procedures for poultry products 
from other WTO members – and corresponding ALOPs.  
7.265  We recall again that the United States point s out that China's food safety enforcement 
problems and food safety crises have been the subject of reports and articles by numerous well-regarded international organizati ons (including WHO) and academics.
504 The United States contends 
that China is not comparable with other WTO Members because most other Members have never 
attempted to export poultry products to the United States. The United States further argues that many of the WTO Members who the FSIS has determined to  be equivalent to the United States had been 
exporting to the United States for many years without a significant incident resulting in confidence and familiarity with their inspection systems. This  includes the ability to resolve any problems that 
may arise, such as in the case of Mexico.
505   
7.266  Nonetheless, as China points out, the FSIS had determined that China's poultry inspection 
system was equivalent to that of the United St ates for processed foreign poultry products and had 
made a preliminary decision also finding China's inspection system for domestically slaughtered 
poultry products equivalent to that of the United Stat es. Therefore, China argues that it is one of the 
ten WTO Members that have obtained FSIS authori zation to export poultry to the United States. 
However, China explains, under Section 727, its poultry products are, in effect, treated as more 
dangerous than those originating in WTO Memb ers that have never obtained an equivalence 
determination from the FSIS.  
7.267  The United States seeks to justify the different  ALOP applied in Section 727 as opposed to 
that in the PPIA, by arguing that  poultry produc ts from China pose a higher risk that those from other 
WTO Members because of China's food safety enfo rcement problems and food safety crises. As 
indicated above, we will examine such a justificatio n by verifying whether it is based on scientific 
principles and founded on scientific evidence. In this  respect, we recall our findings that Section 727 
is not based on a risk assessment in violation of Article 5.1 and 5.2 of the SPS Agreement . We have 
also found that the United States has not prov ided sufficient scientif ic evidence underlying 
Section 727 and thus we have concluded that Sec tion 727 was maintained without sufficient scientific 
evidence in violation of Article 2.2 of the SPS Agreement .  
                                                      
503 We agree with the panel in EC – Approval and Marketing of Biotech Products  which found that : 
"In the light of this, we consider that although Ar ticle 5.5 does not explicitly refer to "SPS  measures", 
implicitly it envisages that the "measure complained of" is an "implementing measure". In other words, the measure complained of must be an SPS measure applied for achieving a particular level of sanitary or 
phytosanitary protection. In this respect, there is therefore no difference between Article 5.5, on the one hand, 
and Articles 5.1 and 5.6, on the other hand." (footnote omitted) 
Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1416. 
504 United States' opening oral statement at the sec ond substantive meeting of the Panel, paras. 39 
and 42. 
505 United States' opening oral statem ent at the second subs tantive meeting of the Panel, paras. 43-44 
and 48. WT/DS392/R 
Page 142  
 
 7.268  Because Section 727 is not based on a risk as sessment and was maintained without sufficient 
scientific evidence, we can only conclude that ther e is no justification based on scientific principles 
and founded in scientific evidence fo r the distinction in ALOPs, as  reflected in the differences 
between the measures used to tackle the risk of potentially unsafe poultry – Section 727 for poultry products from China and the FSIS procedures for poultry products from other WTO Members.  
7.269  We therefore find that the distinction in ALOPs for poultry products for China and for poultry 
products from other WTO members is "arbitrary or unj ustifiable" within the terms of Article 5.5 of 
the SPS Agreement . We thus conclude that the second  element of Article 5.5 of the SPS Agreement  is 
satisfied, with respect to the importation of Chinese poultry products vis-à-vis  that of poultry products 
from other WTO members.  
(iii) Discrimination or disguised restriction on international trade 
7.270  Having found that both the first and the second elements of Article 5.5 of the SPS Agreement  
are met, we proceed to examine the third element of  this provision, i.e. whether the distinction in 
ALOPs in different yet comparable situations results in discrimination or a disguised restriction on international trade.  
7.271  Relying on the Appellate Body Report in Australia – Salmon , China  argues that the 
Section 727 evinces all three "warning signals" that indicate discrimination is present. China also contends that an additional f actor which demonstrates discrimination which was discussed by the 
Panel in Australia – Salmon , is also present. Specifically, China asserts that the distinction between 
the two ALOPs is arbitrary and unjustifiable, that the difference is significant, and there was a substantial difference in official conclusions about the two situations  without scientific justification.
506  
China, therefore, concludes that the warning signa ls and additional factor suggest that Section 727 
results in "discrimination", the third cumulativ e element establishing a violation of Article 5.5.507 
7.272  China refers to its arguments under Article 2.3 of the SPS Agreement , where it affirms that the 
measures at issue restrict only China from seeking and obtaining authorization to export poultry products to the United States, which ultimately lim its competitive opportunities and restrict imports of 
poultry products originating in China. Therefore, according to China, by forbidding the consideration, 
granting or implementation of authorization for Chinese poultry products, while offering the 
possibility to every other WTO Member to seek and obt ain FSIS authorization to export poultry to the 
United States, Section 727 discriminates against China.
508 
7.273  China also considers that "identical or simila r" conditions prevail in China, on the one hand, 
and in all other poultry-exporting WTO Members, on the other, based on the scope and effectiveness 
of FSIS procedures, as applied to poultry products from all WTO Members. These comprehensive 
rules are capable of determining whether poultry products from any Member are safe for importation 
into the United States. China further bases its claim on the fact that FSIS has demonstrated before the 
imposition of the measures at issue, that Chinese rules are fully applicable to and adequate to address 
any risks posed by poultry products from China.509 
7.274  China asserts that the discrimination against Chin a is "arbitrary or unjustifiable", as there is 
no scientific evidence, risk assessment or other justification for treating Chinese poultry products 
differently from those of other WTO Members. Fu rthermore, FSIS procedures are comprehensive and 
able to address risks arising from poultry products produced anywhere in the world, including China. 
                                                      
506 China's opening oral statement at the first subs tantive meeting of the Panel, paras. 56 and 66. 
507 China's first written submission, paras. 133-135. 
508 China's first written submission, para. 121. 
509 China's first written submission, para. 122.  WT/DS392/R 
 Page 143 
 
 
 China, once again recalls that, China was one of only ten WTO Members that had successfully 
obtained authorization to export poultry to the United States under FSIS approval procedures, and due 
to Section 727, its poultry products are treated wo rse than those originating in WTO Members that 
have never been granted FSIS authorization.510 
7.275  The United States  contends that China relies solely on  the panel and Appellate Body reports 
in Australia – Salmon which are not applicable in this case be cause China has not even alleged any 
factors that might show a disguised trade restriction.511 The United States chooses to focus on the lack 
of distinction in the ALOPs applied. 
7.276  We shall therefore examine whether the distin ction in ALOPs applied to the importation of 
poultry products from China and that of poultry pr oducts from other WTO Members which we have 
found to be different but comparable situations, resu lts in discrimination or a disguised restriction on 
international trade. 
7.277  We note that the panel on Australia – Salmon identified three "warning signals" which 
indicate whether the application of distinctions in ALOPs in different situations results in 
discrimination or a disguised restriction on interna tional trade, but explained that none of these "is 
… conclusive in its own right"512: 
(a) the arbitrary and unjustifiable character of differences in the levels of protection513; 
(b) the "rather substantial" difference in the levels of protection; and 
(c) the inconsistency of the SPS measure at issue with Articles 5.1 and 2.2 of the 
SPS Agreement . 
7.278  The panel and Appellate Body in Australia – Salmon, also considered additional factors 
specific to the facts of that case.514  One of the additional factors in that case, which China references 
in its submissions, is that there were substan tial differences in the conclusions concerning the 
measures required to address the perceived risk in a pa rticular situation, in sequential reports issued 
by the importing Member government only one year apart. 
7.279  It seems to us that the reasoning of the panel in Australia – Salmon  may be somewhat circular 
and appears to defeat the purpose of the conclusi on that the three elements in Article 5.5 are 
cumulative and must all be present. Essentially, what th e panel is saying is that proof of the other two 
elements as well as inconsistenc y with Article 5.1 and 2.2 ipso facto  equates to discrimination or a 
disguised restriction on trade with no further analysis being required.  
7.280  The Appellate Body seems to have recognized that the analysis in Australia – Salmon did not 
fully address the third element of Article 5.5 when it noted in EC – Hormones that "the difference in 
levels of protection that is characterizable as arb itrary or unjustifiable is only an element of (indirect) 
proof that a Member may actually be applying an SPS measure in a manner that discriminates between Members or constitutes a disguised  restriction on international trade."
515 
                                                      
510 China's first written submission, paras. 123-124. 
511 United States' comment to China's response to Panel question No. 125. 
512 Panel Report, Australia – Salmon , para. 8.151. 
513 The panel held that "[i]n this dispute, we do consid er that the arbitrary charact er of the differences in 
levels of protection is a 'warning signal' that the measure at issue results in 'a disguised restriction on 
international trade'." Panel Report, Australia – Salmon , para. 8.149. 
514 Appellate Body Report, Australia – Salmon , paras. 167-176. 
515 Appellate Body Report, EC – Hormones, para. 240. WT/DS392/R 
Page 144  
 
 7.281  The Appellate Body added that:  
"[T]he presence of the second element – the arbitrary or unjustifiable character of 
differences in levels of protection considered  by a Member as appropriate in differing 
situations – may in practical effect operate as a 'warning' signal that the implementing measure in its application might be a discrim inatory measure or might be a restriction 
on international trade disguised as an SPS measure for the protection of human life or 
health. Nevertheless, the measure itself need s to be examined and appraised and, in 
the context of the differing levels of protec tion, shown to result in discrimination or a 
disguised restriction on international trade."
516 
7.282  Therefore, it seems, according to the Appellate Bo dy, that even if the presence of all three 
warning signals was demonstrated, that would not necessarily support a conclusion that the measure 
results in discrimination or a disguised restriction on trade. We further note that the Appellate Body in 
EC – Hormones  stated that in the context of the third element of Article 5.5 of the SPS Agreement , the 
analysis should be on a case-by-case basis.517   
7.283  Nevertheless, since Australia – Salmon , parties have typically structured their arguments 
around the third element in Article 5.5 by discussi ng these warning signals and additional factors. 
That is also the case in the current proceedings. Accordingly, the Panel will examine whether China 
has demonstrated the warning signals and add itional factors and then determine whether any 
additional proof is necessary to demonstrate discrimination.  
7.284  The conclusion on whether the first warning signal is present, flows from the analysis of the 
second element of Article 5.5. We recall that the Pa nel has found that there is a distinction in ALOPs 
and that this distinction is arbitrary or unjustifia ble, therefore, the first warning signal is present and 
we move to the second warning signal.  
7.285  The second warning signal is the "rather substantia l" difference in the levels of protection. In 
this respect, China argues that there are "significan t" differences in the applied ALOPs because one is 
less than zero and one accepts that there may be some minimal and inherent risk of importing unsafe 
poultry from an "equivalent" WTO Member.518  In our view, it cannot be assumed that an import ban 
reflects an ALOP of zero or, in fact, an ALOP different from a control regime. Conversely, it is also difficult to maintain that the mere  fact that there is no way to fully guarantee zero exposure through a 
particular control regime means that the ALOP set  by the importing Member is not, in fact, zero. 
Additionally, it is unclear whether a "s tricter than zero" tolerance exists.  
7.286  Having said that, we refer to our findings u nder the first element of Article 5.5 of the 
SPS Agreement  in respect to the application by the Un ited States of two different ALOPs for poultry 
products from China and poultry products from othe r WTO Members. We recall that, following the 
panel in Australia – Salmon, we concluded that the ALOP reflected  in Section 727, which imposed an 
absolute import ban on poultry products from China,  was substantially different from the ALOP in the 
PPIA which is achieved via a conditional import ba n which at least provides an avenue for WTO 
Members, other than China, to eventually  achieve access to the United States market.
519 Therefore, the 
second warning signal is also met. 
7.287  We note that even though it has brought claims under Articles 5.1 and 2.2, China did not 
argue that the warning signal of a violation of tho se articles was present. However, given our findings 
                                                      
516 Appellate Body Report, EC – Hormones , para. 215. 
517 Appellate Body Report, EC – Hormones , para. 240. 
518 China's response to Panel question No. 48. 
519 See Section VII. G.2(b)(i) above.  WT/DS392/R 
 Page 145 
 
 
 of violation of both provisions in Section VII.F.2( e) above, we can conclude that the third warning 
signal is also present.  
7.288  Having concluded that the three warning signals are present, we will go ahead and determine 
whether any additional proof is necessary to demonstrate discrimination.  
7.289  In determining whether discrimination exists , we find the language of the panel in Canada – 
Pharmaceutical Patents  particularly interesting. In that case,  which dealt with the TRIPs Agreement, 
the panel noted: 
"The primary TRIPS provisions that deal with discrimination, such as the national 
treatment and most-favoured-nation provisions  of Articles 3 and 4, do not use the 
term 'discrimination'. They speak in more precise terms. The ordinary meaning of the 
word 'discriminate' is potentially broader than these more specific definitions. It 
certainly extends beyond the concept of diffe rential treatment. It is a normative term, 
pejorative in connotation, referring to results of the unjustified imposition of 
differentially disadvantageous treatment. Discrimination may arise from explicitly different treatment, sometimes called 'de jure discrimination', but it may also arise 
from ostensibly identical treatment which,  due to differences in circumstances, 
produces differentially disadvantageous effects, sometimes called 'de facto 
discrimination'. The standards by which the justification for differential treatment is 
measured are a subject of infinite complexity . 'Discrimination' is a term to be avoided 
whenever more precise standards are available,  and, when employed, it is a term to be 
interpreted with caution, and with care to  add no more precision than the concept 
contains."
520 
7.290  We recall that both the pane l and Appellate Body in Australia – Salmon521, considered as an 
additional factor that proved discrimination the s ubstantial differences in the conclusions concerning 
the measures required to address the perceived risk in  a particular situation,  in sequential reports 
issued by the importing Member government only one y ear apart. In this respect, China points to the 
"substantially different conclusions " on how to deal with Chinese poultry in a short period of time. 
China's argument focuses on the fact that in 2006,  the FSIS concluded that Chinese processed poultry 
was safe enough to satisfy the United States' ALOP articulated in the PPIA; yet in 2008 the US 
Congress supplanted that determination with a finding that Chinese processed poultry was so dangerous that the FSIS needed to be prev ented from going forward with establishing and 
implementing a rule permitting its importation. We ag ree that this may be considered to be an 
"additional factor".  
7.291  Furthermore, the fact that Section 727 only applies to poultry products from China is 
discriminatory by nature. Indeed, examining the measur e itself in the context of the differences in the 
ALOPs, we conclude that discrimination was occu rring, in particular because Section 727 applies 
only to China. We note that the panel in Canada – Pharmaceutical Patents  considered that 
"discrimination" refers "to results of the unjus tified imposition of differe ntially disadvantageous 
treatment".
522   Therefore, a determination that "discrim ination" exists would still rest on whether the 
different treatment applied was "justified".523  Having determined that the differences in ALOPs are 
                                                      
520 Panel Report, Canada – Pharmaceutical Patents, para. 7.94. 
521 Appellate Body Report, Australia – Salmon , paras. 167-176. 
522 Panel Report, Canada – Pharmaceutical Patents , para. 7.94. 
523 We however note that the panel in Argentina – Hides and Leather , when discussing the differences 
between the types of discrimination discussed throughout the GATT, noted that a provision (Article III:2) could 
prohibit even "justifiable" discrimination. Panel Report, Argentina – Hides and Leather , para. 11.315. 
"It is important to bear in mind that the standard of "unjustifiable" discrimination is different in nature 
and quality from the standard of discrimination contained in  Article III:2, first sentence. As Argentina correctly WT/DS392/R 
Page 146  
 
 unjustified
524, we can reasonably conclude that the differences in ALOPs result in discrimination 
against China.  
7.292  We also recall the finding of the Appellate Body in US – Shrimp  that "discrimination results 
not only when countries in which the same conditions prevail are differently treated, but also when the 
application of the measure at issue does not allo w for any inquiry into th e appropriateness of the 
regulatory program for the conditions prevailing in those exporting countries."525  It would seem that a 
ban preventing the FSIS from considering China's a pplication for equivalency would be just such a 
measure as that described by the Appellate Body.  
7.293  Therefore, it seems reasonable to conclude that  Section 727 results in discrimination against 
China. We thus find that the arbitrary or unjustifiable distinction in ALOPs applied by the 
United States in respect of poultry products from China vis-à-vis  poultry products from other WTO 
Members results in discrimination against China. Acco rdingly, the third element of Article 5.5 of the 
SPS Agreement  is satisfied, with respect to the importation of Chinese poultry products vis-à-vis  that 
of poultry products from other WTO Members. 
(iv) Conclusion 
7.294  Having found that the importation of poultry products from China and that of poultry 
products from other WTO Members are different yet co mparable situations and that the United States 
is applying different ALOPs to such situations; that the distinction in ALOPs for poultry products from China and for poultry products from other WTO Members is "arbitrary or unjustifiable"; and 
that this arbitrary or unjustifiable distinction in AL OPs results in "discrimination " against China, we 
conclude that the three elements of Article 5.5 of the SPS Agreement are present. Accordingly, the 
Panel finds that Section 727 is inc onsistent with Article 5.5 of the SPS Agreement.  
(c) The importation of Chinese poultry products vis-à-vis  that of other food products from China 
7.295  The second set of comparable situations presen ted by China refers to a comparison of the 
importation of Chinese poultry products and that of  other food products from China. We shall 
therefore commence our analysis by examining whet her such different situations exist and if so, 
whether they are comparable.  
Whether different yet comparable situations exist
 
7.296  We shall start by considering whether the im portation of Chinese poultry products and that of 
other food products from China are "different" situati ons. This is not a difficult examination since the 
measure applied to Chinese poultry products – Se ction 727 – is only applied to Chinese poultry 
products; and hence all other food products from China will be subject to different measures and thus 
will be in different situation. In response to a qu estion from the Panel, China clarified that the FDA 
has jurisdiction over all imported food except for meat, poultry, and fresh eggs, which are under the jurisdiction of the FSIS.
526 The basis for the FDA procedures is the Food, Drug and Cosmetic Act .527 
                                                                                                                                                                     
points out, the prohibition on unjustifiable discriminati on in the application of  a measure by necessary 
implication leaves room for justifiable discrimination. On the other hand, this does not imply that some 
discrimination is always justifiable. Whether or not any discrimination is justifiable, in a given instance, and if so, to what extent, must be ascertained by way of analysis of the specific ci rcumstances of each case." 
524 See para. 7.269 above. 
525 Appellate Body Report, US – Shrimp , para. 165. 
526 Exhibit CN-7, Exhibit CN-48, Exhibit CN-57. 
527 Sections 701, 801 of 21 USC §371, (Exhibit CN-89).  WT/DS392/R 
 Page 147 
 
 
 According to China, the FDA import procedur es are, like Section 727, an SPS measure under 
Annex A.528  
7.297  In addition to being different, though, we reca ll that the Appellate Body has called for the 
situations to be comparable. China must thus est ablish a common element between the two situations.  
7.298  At first, China  broadly argued that "based on the logic of the JES, any food product from 
China could in theory be contaminated, since all food products produced in China are subject to the 
food safety laws that the United States cl aims in its submission are not enforced."529  China also 
argues that any food product, including but certainly not limited to poultry products, could be contaminated, for example, basil, peanut butter,  and pet food contaminated with Salmonella; candy 
contaminated with lead; fish contaminated with  mercury; and rice contaminated with unapproved 
genetic material.
530  In China's view, the common element between these two situations is sharing 
common risk of potential contaminants whic h are pathogenic bacteria such as Salmonella, 
Campylobacter and Listeria in addition to E Co li and Highly Pathogenic Avian Influenza (HPAI) 
virus.531 China asserts that these contaminants are with in the meaning of footnote 4 or disease-causing 
organism according to Annex A(1)(b), they are not unique to China, in addition they are not only 
found in poultry products.532   
7.299  In response to a question from the Panel, China clarified that it was not arguing that all food 
products subjected to the same regulatory regime c ould be contaminated with the same contaminant. 
According to China, each of these pathogenic bacteria  affects different types of food products in 
addition to poultry as explained in the FDA fact  sheet in Exhibits CN 85, CN 87 and CN 88.533 China 
also notes that neither the text nor the legislativ e history of Section 727, nor the FSIS documentation 
asserts or otherwise provides contemporaneous evidence that poultry  is more likely to be 
"contaminated" than other types of food  products such as basil or pet food.534  It contends that the 
FDA which has jurisdiction over all imported food except for meat, poultry and fresh eggs considers 
"contaminated foods" to include foods containing  bacteria such as Salmonella, Campylobacter, 
Listeria and E. coli.535  
7.300  The United States responds that China has not established that the types of risks addressed by 
the PPIA are the same as the risks a ssociated with other types of food products and that poultry has a 
different ALOP than other food products.536 Moreover, the United States also clarifies that FSIS 
operates under an equivalence regime while the FDA relies on "import alerts" and more rigorous 
border measures so the situations are not comparable.537   
7.301  We note that China has not contended that all Chinese food products could have Salmonella, 
Campylobacter and Listeria. It certainly has not argued that all Chinese food products could be 
potential sources of Avian influenza. It has instead initially argued that many Chinese food products could potentially be contaminated with the same  pathogenic bacteria that the United States has 
indicated are of concern with respect to poultry imports.
538 In China's response to a question from the 
                                                      
528 China's response to Panel question No. 124. 
529 China's opening oral statemen t at the first substantive meeting of the Panel, para. 49. 
530 China's opening oral statemen t at the first substantive meeting of the Panel, para. 54. 
531 China's opening statement at the second substantive meeting, paras. 36-37 and China's response to 
Panel question No. 123. 
532 China's response to Panel question No. 123. 
533 China's response to Panel question No. 123. 
534 China's opening oral statemen t at the first substantive meeting of the Panel, para. 55. 
535 China's response to Panel question No. 124. 
536 United States response to Panel question No. 121. 
537 United States' comment on  China's response to Panel question No. 124. 
538 China's response to Panel question No. 123. WT/DS392/R 
Page 148  
 
 Panel, China provided the following list of food products which could be contaminated by the 
pathogenic bacteria namely: 
 – Salmonella:  Eggs, poultry, milk, juice, cheese, fruits, and vegetables. 
  – Listeria:  Cheese, milk, deli meats, and hot dogs.  
 
 – Campylobacter:  Poultry, and milk.   – E.coli:  Meat, milk, juice, fruits and vegetables, and cheese.  
7.302  China also provided tables taken from UN Comtrade on the potential for contamination in 
food groups imported from China.
539 
7.303  We also note that China has only provided the more specific information about the 
SPS measures applied to food products from China ot her than poultry products and that relating to 
which pathogenic bacteria affect which types of f ood products late in the proceedings.  Indeed, China 
provided this information only in response to a qu estion from the Panel during and after the second 
substantive meeting asking where that informati on could be found in China's prior submissions.540  
7.304  It is questionable whether the above list is su fficient to establish the common elements that 
make all "other food products" comparable to poultry products such that they are "different situations" 
within the meaning of Article 5.5. We do not belie ve that Article 5.5 permits a "mix and match" 
approach but rather requires that China links the me asures to which it alleges the United States applies 
a lower ALOP, with the risks it believes are comparable  to those posed by poultry. It is certainly not 
for the Panel to examine every other food product exported by China to the United States to determine which ones have the same contaminants or adverse health effects as poultry and then examine whether 
the measures applied to those products exhibit the same ALOP as Section 727.  
7.305  However, given that the Panel has already found  that Section 727 is inconsistent with the 
obligations in Article 5.5 with respect to distinc tions in ALOPs for imports of poultry products from 
China vis-à-vis  poultry from other WTO Member s, the Panel does not see how continuing to make a 
finding on the second comparable situations propos ed by China would assist in obtaining a positive 
resolution to the dispute. Therefore, we exercise  judicial economy with respect to this aspect of 
China's claim under Article 5.5.  
7.306  The Panel recalls that the principle of judicial economy is recognized in WTO law. The 
Appellate Body has consistently ruled that panels ar e not required to address all the claims made by a 
complaining party but rather a panel has discretion to determine which claims it must address in order 
to resolve the dispute between the parties, provi ded that those claims are within its terms of 
reference.
541  The Appellate Body has relied on the exp licit aim of the dispute settlement mechanism, 
which is to secure a positive solutio n to a dispute, as provided in Article 3.7 of the DSU, or a 
satisfactory settlement of the matter as per Article 3.4 of the DSU. The Appellate Body has stressed 
                                                      
539 China's response to Panel question No. 123, referring to Exhibit CN-41. 
540 We note that pursuant to the working procedures of the Panel, all factual evidence was to have been 
submitted at the time of the first substantive meeting unless in response to a specific question by the Panel for 
that information or to rebut facts presented by the other pa rty. We note that China appended this information in 
response to a question from the Panel asking where the information could be found in the closed factual record 
and that the Panel did not specifically ask China to provide new factual information in response to the question. 
However, the United States has not objected to this untimely submitted evidence and has had an opportunity to 
comment on it, in its comments on China's responses to  the Panel's questions after the second substantive 
meeting. 
541 Appellate Body Report, India – Patents (US), para. 87.  WT/DS392/R 
 Page 149 
 
 
 that the basic aim of dispute settlement in the WT O is to settle disputes and not to "make law" by 
clarifying existing provisions of the WTO Agreement that fall outside the context of resolving a particular dispute.
542  
7.307  We bear in mind that, in Australia – Salmon , the Appellate Body cautioned panels against 
false judicial economy arguing that the right to exercise judicial economy could not be exercised 
where only a partial resolution of a dispute would result.543  The Panel believes that this is not the case 
in the current proceedings. In maki ng findings under Article 5.5 of the SPS Agreement with respect to 
distinctions in ALOPs for imports of poultry products from China vis-à-vis  poultry from other WTO 
Members,  the Panel considers that it has effectively resolved China's claim under Article 5.5. 
H. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  2.3 OF THE SPS A GREEMENT  
1. Arguments of the parties 
7.308  China  argues that the United States is applying a hi gher level of protection to China which is 
arbitrary or unjustifiable and results in discrimination.544   
7.309  China affirms that the measures at issue rest rict only China from seeking and obtaining 
authorization to export poultry products to the United States, which ultimately limits competitive 
opportunities and restricts imports of poultry products originating in China. Therefore, by forbidding 
the consideration, granting or implementation of  authorization for Chinese poultry products, while 
offering the possibility to every other WTO Member to seek and obtain FSIS authorization to export poultry to the United States, Section 727 discriminates against China.
545 
7.310  China seems to invoke only the firs t sentence of Article 2.3 of the SPS Agreement  in its 
claims. In its first written submission, China cites Article 2.3 of the SPS Agreement  in full546 but it 
does not advance specific arguments in regard to whether the United States measures are a disguised 
restriction on trade.547  China submits that, under certain ci rcumstances, a finding of inconsistency 
with Article 5.5 would necessarily imply incons istency with Article 2.3. Particularly the 
demonstration of a "disguised restriction on inte rnational trade" which can be found in the second 
sentence of Article 2.3 and Article 5.5 of the SPS Agreement .548  However, China claims that it is not 
the case for the "discrimination" element since Article 2.3 of the SPS Agreement  has a narrower non-
                                                      
542 The Appellate Body has explained that given the explicit aim of dispute settlement that permeates 
the DSU, it does not consider that Article 3.2 of the DSU is meant to encourage either panels or the Appellate 
Body to make law by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute. In the Appellate Body's view, a panel need only address those claims which must be 
addressed in order to resolve the matter at i ssue in the dispute.. Appellate Body Report, US – Wool Shirts and 
Blouses , DSR 1997:I, 323 at 340. 
543 The Appellate Body explained that: 
"The principle of judicial economy has to be applied keeping in mind the aim of the dispute 
settlement system. This aim is to resolve the matter at issue and 'to secure a positive solution to a dispute'. To provide only a partial resolution of the matter at issue would be false judicial 
economy. A panel has to address those claims on which a finding is necessary in order to 
enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member with those recommendations and rulings 'in order to ensure 
effective resolution of disputes to the benefit of all Members.' 
Appellate Body Report, Australia – Salmon , para. 223. 
544 China's first written submission, para. 126. 
545 China's first written submission, para. 121. 
546 China's first written submission, para. 118. 
547 China's first written submission, paras. 120-125. 
548 China's response to Panel question No. 125. WT/DS392/R 
Page 150  
 
 discrimination requirement which has a territorial component that is absent in Article 5.5 of the 
SPS Agreement .
549 
7.311  China also notes that it does not clai m a violation of Article 2.3 of the SPS Agreement  based 
on arbitrary distinctions in the ALOPs applie d by the United States to poultry and non-poultry 
products from China.550 
7.312  Finally, China argues that "identical or sim ilar conditions" prevail between it and all other 
WTO Members that had the opportunity to seek an d achieve equivalence. China points to Mexico 
which, in its view, is in the same situation as China in terms of its equivalence process and the 
allegation of systemic food safety crisis.551 
7.313  The United States  contends that it is unclear whethe r Article 2.3 is meant to apply to a 
procedural requirement rather than a substantiv e SPS measure. In particular, the United States 
contends that it is unclear if Article 2.3 was inte nded to apply in addition to  the main SPS equivalence 
provision, Article 4.1. The United States also argues that  there is no need to look at Article 2.3 of the 
SPS Agreement , because the issues addressed under Article 2.3 are essentially the same as those under 
the chapeau of Article XX(b) of the GATT 1994.552 
7.314  The United States also argues that  China has not even alleged any factors that might show a 
disguised trade restriction.553 
7.315  Finally, the United States argues that the prope r comparison to determine whether "identical 
or similar conditions prevail" is not between Chin a and all countries who seek to export poultry to the 
United States. Rather, it argues that the co mparison should be between China and other 
WTO Members with equivalent food safety problems and whose poultry inspection systems have 
already been found equivalent or fo r whom determination was imminent.554 The United States asserts 
that "identical or similar conditions" do not preva il in China and Mexico for numerous substantive 
and temporal reasons inter alia  Mexico has never experienced a food safety crisis characterized by the 
WHO as one of the largest food safety events the ag ency has had to deal with in recent years, the 
absence of broad systemic and food safety enfor cement problems, Mexico's exporting history of 
poultry products to the United States and the diffe rent stages in the equivalence process where the 
problems arose.555 
2. Analysis by the Panel 
(a) Article 2.3 of the SPS Agreement  
7.316  Article 2.3 of the SPS Agreement  provides: 
"Members shall ensure that their san itary and phytosanitary measures do not 
arbitrarily or unjustifiably discriminate between Members where identical or similar 
conditions prevail, including between their ow n territory and that of other Members. 
Sanitary and phytosanitary measures shall not be applied in a manner which would 
constitute a disguised restriction on international trade."  
                                                      
549 China's response to Panel question No. 125. 
550 China's response to Panel question No. 126. 
551 China's response to Panel question No. 128. 
552 United States' second written submission, paras. 102-107. 
553 United States' comment to China's response to Panel question No. 125. 
554 United States' response to Panel question No. 127. 
555 United States' response to Panel question No. 129.  WT/DS392/R 
 Page 151 
 
 
 7.317  The panel in Australia – Salmon (Article 21.5 – Canada)  found that there were three elements 
required in order to establish a violation of Artic le 2.3, first sentence: (i) that the measure 
discriminates between the territories of Members other than the Member imposing the measure or 
between the territory of the Member imposing the m easure and that of another Member; (ii) that the 
discrimination is arbitrary or unjustifiable; and (iii) that identical or similar conditions prevail in the 
territory of the Members compared.556   
7.318  We also recall that the panel in Australia – Salmon , upheld by the Appellate Body, noted that 
because Article 2.3 sets forth the "basic obligation" and Article 5 is a more specific enunciation of that obligation, a finding of a viola tion of Article 5.5 would necessarily imply a violation of Article 2.3.
557 
We agree with the reasoning of the panel and the Appellate Body in Australia – Salmon and conclude 
that because Section 727 is inconsistent with Article 5.5 of the SPS Agreement , by virtue of a 
distinction in ALOPs which results in discrimination between Members, it is also inconsistent with the 
first sentence of Article 2.3 of the SPS Agreement.  
(b) Conclusion 
7.319  The Panel finds that the inconsistency of  Section 727 with Article 5.5 of the SPS Agreement 
necessarily implies that Section 727 is also  inconsistent with Article 2.3 of the SPS Agreement . 
Therefore, the Panel finds that Section 727 is inconsis tent with the first sentence of Article 2.3 of the 
SPS Agreement .  
I. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  5.6 OF THE SPS A GREEMENT  
1. Arguments of the parties 
7.320  China claims that Section 727 is inconsistent with the obligation in Article 5.6 of the 
SPS Agreement that SPS measures not be unduly trade-restrictive558;  China refers to the findings of 
Australia – Salmon , where the Appellate Body stated that, to establish a violation of Article 5.6, a 
Member must demonstrate that there is an altern ative SPS measure which: (i) is reasonably available 
taking into account technical and economic feasibility; (ii) achieves the Member's appropriate level of 
sanitary or phytosanitary protection; and (iii) is signi ficantly less restrictive to trade than the contested 
SPS measure.559 
7.321  China argues that there is an alternative measure that meets all of these criteria, i.e. the 
application to China of normal FSIS approval pr ocedures for the importation of poultry products.560 
China bases its arguments on the fact that FSIS approv al procedures are applied on a regular basis to a 
variety of WTO Members involving a number of different risk factors, the FSIS approval process is technically and economically feasible and they have  already been effectively applied to China, 
resulting in the 2006 equivalence determination and subsequent establishment of a rule authorizing 
the importation of processed poultry products from China.
561 
                                                      
556 Panel Report, Australia – Salmon (Article 21.5 – Canada) , para. 7.111. 
557 Panel Report, Australia – Salmon , para. 8.109. (concluding that a finding of violation of the more 
specific Article 5.5, particularly a conclusion that the third element had been met, would imply a violation of the more general Article 2.3. However, the panel did recognize, at the same time, that, given the more general 
character of Article 2.3, not all violations of Article 2.3 are covered by Article 5.5); upheld by Appellate Body 
Report, Australia – Salmon , para. 252. 
558 China's first written submission, para. 192; China's second written submission, para. 114. 
559 Appellate Body Report, Australia – Salmon , para. 194 cited in China's first written submission, 
para. 150. 
560 China's first written submission, para. 151. 
561 China's first written submission, para. 152. WT/DS392/R 
Page 152  
 
 7.322  China considers that this altern ative measure would meet the "a ppropriate level of protection" 
of the United States in connection with imported poultry products. The United States' appropriate 
level of protection for imported poultry from all WT O Members other than China, as reflected in its 
normal FSIS approval procedures, is much lower than  that implied by Section 727. Those measures 
apply a risk tolerance of zero to Chinese poultry pr oducts. Application of the normal FSIS approval 
procedures to China would achieve the lower level of  sanitary protection applied by the United States 
to all other imported poultry produc ts, and it would be significantly less trade-restrictive than the 
measures at issue. FSIS procedures provide for the po ssibility of obtaining authorization to export to 
the United States, if the applicant country's poultr y products conform to US food safety requirements. 
Section 727 precludes this possibility, regardless of how safe the Chinese food safety system and 
procedures are, or whether they are equivalent to the United States' system. The resulting de facto 
import ban is far more trade-restrictive than necessary.
562 Moreover, China submits that FSIS 
procedures would have made a greater contribution to  protect human and animal life and health than 
Section 727 because Section 727 prevented the FSIS from conducting any examination whatsoever of 
alleged food safety problems that could affect Chinese poultry products.563 
7.323  Finally, China contends that the possibility of having more restrictive measures is not relevant 
under Article 5.6 because the relevant test requires th at there be a no less trade restrictive alternative 
measure (compared to the measure at issue) available to the imposing Member.564 
7.324  In its oral statement at the first substantive m eeting, China referred the Panel to its rebuttal of 
the US Article XX(b) defence for a demonstration th at an alternative measure that meets all of the 
criteria of Article 5.6 would be the application to China of the normal FSIS procedures.565  
7.325  The United States reiterates its main point that the subs tantive obligations in Article 5 do not 
apply to equivalence regimes set up pursuant to Article 4 of the SPS Agreement . Specifically, the 
United States argues that Article 5.6 does not app ear to apply to every procedural requirement 
adopted in the course of operating SPS measures. Inst ead, according to the United  States, it appears to 
apply to substantive measures "establishing or maintaining" the importing Member's ALOP.566 
7.326  The United States finds support for its position in note 3 which clarifies that Article 5.6 is not 
breached unless there is another measure that ach ieves the ALOP. The United States argues that 
application of Article 5.6 to equivalence proce dures seems inapposite as in that context it is the 
exporting Member that chooses the SPS measures intended to achieve a level of protection, and the question for the importing Member is whether tho se measures achieve the result of equivalence. 
According to the United States, it is hard to a pply Article 5.6, which turns on whether SPS measures 
chosen by the importing Member are more trade restrictive than required, in the context of an 
equivalency regime.
567   
7.327  In response to Panel question No. 46 the Unite d States disagreed with China's assertion that 
the normal FSIS procedures were a reasonably availa ble alternative to Section 727. According to the 
United States, China's argument is "simply anot her way of asserting that Section 727 was not 
necessary to protect human and animal life and heal th against the risk posed by potentially dangerous 
                                                      
562 China's first written submission, para. 154. 
563 China's comment to the United States ' response to Panel question No. 130. 
564 China's response to Panel question No. 91. 
565 China's opening oral statemen t at the first substantive meeting of the Panel, para. 76. 
566 United States' second written submission, para. 116. 
567 United States' second written submission, para. 117.  WT/DS392/R 
 Page 153 
 
 
 poultry products from China in the first place."568  According to the United States, it has demonstrated 
that Section 727 was indeed necessary to accomplish this objective. 
7.328  Moreover, the United States argues that the norma l FSIS procedures cannot be regarded as a 
less-trade restrictive, technically and economically  feasible alternative measure because although the 
FSIS has the ability to temporarily suspend or permanently withdraw an equivalence finding, 
potentially dangerous poultry from China could still enter the United States. This would put 
consumers at risk before "something goes wrong" and th is approach is inconsistent with ensuring that 
China's measures achieve the United States' ALOP.569  
7.329  The United States finally contends that China's interpretation of Article 5.6 of the 
SPS Agreement –  by referring to Article XX of the GATT 1994 – is incorrect because it is contrary to 
the customary rules of interpretation and in f act would appear to render Article 5.6 of the 
SPS Agreement  inutile.570  However, the United States also argues that applying the normal FSIS 
procedures is not an alternative at all or is not l ess trade restrictive because there is no guarantee that 
the United States will determine that China's measures are equivalent.571  In its view, Section 727 is 
necessary because FSIS has never before been confront ed with a similar challenge to that poised by 
China's food safety crisis and therefore the "norma l" procedures were not enough alone in order to 
cope with the unusual circumstances.572 
2. Analysis by the Panel 
(a) Article 5.6 of the SPS Agreement  
7.330  We commence by looking at the text of Article 5.6 of the SPS Agreement  which provides that: 
"Without prejudice to paragraph 2 of Artic le 3, when establishing or maintaining 
sanitary or phytosanitary measures to achieve the appropriate level of sanitary or 
phytosanitary protection, Members shall en sure that such measures are not more 
trade-restrictive than required to achieve their appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility.
3 
_______________ 
3 For purposes of paragraph 6 of Article 5,  a measure is not more trade-restrictive 
than required unless there is another me asure, reasonably available taking into 
account technical and economic feasibility, that achieves the appropriate level of 
sanitary or phytosanitary protection and is significantly less restrictive to trade."  
7.331  In Australia – Salmon , with respect to the structure of Article 5.6 of the SPS Agreement , the 
Appellate Body agreed with the panel that footno te 3 provides a three-pronged test to establish a 
violation of Article 5.6. In partic ular, the Appellate Body held that: 
"The three elements of this test under Ar ticle 5.6 are that there is an SPS measure 
which: 
(1) is reasonably available taking into account technical and economic 
feasibility; 
                                                      
568 United States' response to Panel question No. 46. 
569 United States' response to Panel question No. 130. 
570 United States' comment to China's response to Panel question No. 91. 
571 United States' comment to China's response to Panel question No. 92. 
572 United States' comment to China's response to Panel question No. 92. WT/DS392/R 
Page 154  
 
 (2) achieves the Member's appropriate level of sanitary or phytosanitary 
protection; and 
(3) is significantly less restrictive to trade than the SPS measure contested. 
These three elements are cumulative in the sense that, to establish inconsistency with 
Article 5.6, all of them have to be met. If any of these elements is not fulfilled, the 
measure in dispute would be consistent with Article 5.6. Thus, if there is no 
alternative measure available, taking into  account technical and economic feasibility, 
or if the alternative measure does not ach ieve the Member's appropriate level of 
sanitary or phytosanitary protection, or if it is not significantly less trade-restrictive, 
the measure in dispute would be consistent with Article 5.6."
573 
7.332  We note that the burden rests on the complaining party to demonstrate that there is an 
alternative measure that meets all three requirements in Article 5.6.574  As noted above, China has 
proposed as an alternatively available, less trade -restrictive measure the standard FSIS procedures 
which would apply to China in the absence of Section 727.  
7.333  We note that China argues that Section 727 is mo re trade restrictive th an required to achieve 
the United States' ALOP for poultry as expressed in the PPIA. We recall our finding that the 
United States applies a different ALOP via Secti on 727 from what it does via the PPIA. Indeed, China 
has argued this strenuously in the context of its cl aims under Article 5.5. We note that Article 5.5 
deals with determining whether a Member is applying distinctions that are arbitrary or unjustifiable in 
the application of ALOPs to the same risk. We note that the analysis under Article 5.5 is with respect 
to determining whether the Member is applying different ALOPs to the same risk. Article 5.6 deals 
with whether a particular measure is more trade restrictive than required to achieve the Member's 
ALOP. In our view, in a dispute where claims are made under both Articles 5.5 and 5.6 a finding of inconsistency with Article 5.5 cannot be taken to mean that the ALOP used in the analysis under 5.6 
would always necessarily be the less restrictive ALOP of those being applied. Therefore, a finding that a Member is applying different ALOPs cannot be taken to mean that the Panel is determining 
which ALOP the Member should apply.
575  A finding of inconsistency w ith Article 5.5 cannot deprive 
the importing Member of its prerogative to choose its own ALOP.  
7.334  In its arguments regarding its claims under Artic le 5.6, China has asked the Panel to assess 
the trade restrictiveness of the measure Section 727, vis-à-vis  what is required by the ALOP in the 
PPIA and not the ALOP that it itself argues is reflect ed in Section 727. China is asking the Panel to 
gauge the trade restrictiveness of the measure vis-à-vis  what is required by the ALOP it believes the 
United States should  apply to its poultry products. We do not be lieve that it is an appropriate role for 
this Panel to engage in a speculative exercise of  what ALOP a Member should apply to protect its 
own territory from public health risks. In particular , we recall the reasoning of the Appellate Body in 
Australia – Salmon that "'the level of protection deemed appropriate by the Member establishing a 
sanitary ... measure' is a prerogative  of the Member concerned and not of a panel or the Appellate 
Body."576 
7.335  Additionally, we note that a determination of wh ether a measure is more trade restrictive than 
required to achieve the ALOP of a Member must be  done by comparing the ALOP actually applied to 
                                                      
573 Appellate Body Report, Australia – Salmon , para. 194. 
574 Appellate Body Report, Japan – Agricultural Products II , para. 126. 
575 The determination of the ALOP, as defined in paragraph 5 of Annex A, is a prerogative of the 
Member concerned and not of a panel or of the Appellate Body.  Appellate Body Report, Australia – Salmon , 
para. 199. 
576 Appellate Body Report, Australia – Salmon, para. 199.  WT/DS392/R 
 Page 155 
 
 
 the risks posed by the products. We recall our fi ndings under Articles 5.1, 5.2 and 2.2 that the 
United States has not based Section 727 on a risk a ssessment and that it has maintained Section 727 
without sufficient scientific evidence. Without k nowing the level of risk posed by Chinese poultry 
products the Panel would have to enter into an hypot hetical analysis that would be akin to the Panel 
doing its own risk assessment and then comparing that  risk to the United States' ALOP to determine 
whether Section 727 is more trade restrictive than  required. We recall that this is also not the 
appropriate role for a panel. In particular prior panels have explained that , a panel should not conduct 
its own risk assessment577 or impose any scientific opinion on the importing Member.578      
7.336  Given the above considerations, in the present case an analysis under Article 5.6 would be 
inappropriate for this Panel to engage in as it w ould be entirely speculative and be exceeding our role 
under Article 11 of the DSU to make an objective assessment of the matter.  
7.337  Accordingly, after careful consideration, th e Panel refrains from ruling on China's claim 
under Article 5.6 of the SPS Agreement .  
(b) Conclusion 
7.338  For the above reasons, the Panel concludes that  it would not be appropriate to proceed and 
rule on China's claim under Article 5.6 of the SPS Agreement , and, thus, declines to do so. 
J. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  8 OF THE SPS A GREEMENT  
1. Arguments of the parties 
7.339  China  claims that the United States has violated Article 8 of the SPS Agreement  by failing to 
follow the requirements under Annex C(1)(a) of the SPS Agreement  concerning WTO Members' 
obligations to "undertake and complete" the pro cedures for assessing compliance with a substantive 
SPS measure "without undue delays". China argues th at the application of Section 727 unjustifiably 
delayed the application of the normal FSIS proce dures to Chinese poultry products, and it could not 
be justified based on China's inaction. China ma intains that the delay which resulted from the 
application of Section 727 was "undue" and c onstituted a violation of Article 8 of the 
SPS Agreement .579 
7.340  China specifically refers to the panel report in EC – Approval and Marketing of Biotech  
Products , arguing that the obligation in Annex C(1)(a ) means that "approval procedures [must] be 
undertaken and completed with no unjustifiable loss of time", and that such determination depends on 
"whether there is a legitimate reason, or justifica tion for a given delay, not the length of a delay as 
such".580 
7.341  China notes that Section 727 was one of a ser ies of measures – including its predecessor, 
Section 733, and the measure that replaced it, Sect ion 743 – that delayed the application of FSIS 
procedures to China by two years.581  
7.342  China clarifies that the normal FSIS procedures are "control, inspection and approval 
procedures" covered by Annex C and Article 8 of the SPS Agreement582, and that Section 727 caused 
                                                      
577 Panel Report, EC – Hormones (Canada) , para. 8.104; Panel Report, EC – Hormones  (US), 
para. 8.101. 
578 Panel Report, Australia – Salmon , para. 8.41. 
579 China's first written submission, paras. 156-160. 
580 China's first written submission, para. 158 . 
581 China's opening oral statement at the first substantive meeting of the Panel, para. 78. As explained 
in Section VII.A.1(a), Sections 733 and 743 are not part of our terms of reference. WT/DS392/R 
Page 156  
 
 "undue delay" in undertaking and completing th e FSIS procedures of "control, inspection and 
approval".
583  China further asserts that Article 8 and Annex C of the SPS Agreement  apply to all 
types of "control, inspection and approval pro cedures" whether for one product or multiple 
products584,  and argues that Annex C(1)(a) of the SPS Agreement  does not specify whether the source 
of an "undue delay" must be caused by an SPS measure  or by other requirements. According to China, 
the only requirement to demonstrate a failure to obs erve the requirements in Annex C(1)(a) is "that 
the 'undue delay' impacts the undertaking and co mpleting of 'control, inspection, and approval 
procedures' used 'to check and ensure the fulf ilment of sanitary and phytosanitary measures'."585 
7.343  Alternatively, China maintains that Secti on 727 denied the approval of Chinese poultry 
imports in a manner that allows it to be character ised as an "approval procedure", since it withheld 
funds from the FSIS and, thereby, prevented the re view of China's applications to export poultry 
under normal FSIS procedures.586 
7.344  The United States  contends that China has failed to show that Section 727 breached Article 8 
and Annex C(1)(a) of the SPS Agreement  first because these provisions apply to "control, inspection, 
and approval procedures" which do not include equi valence determinations under Article 4 of the 
SPS Agreement . Second, because China has not established the existence of any "undue delay".  
7.345  The United States further argues that Article 8 of the SPS Agreement  only mentions systems 
for approving the use of additives and system s for establishing tolerances for contaminants. 
According to the United States, these two exampl es relate only to the approval and control of 
particular products or substances, rather th an an examination of an exporting Member's 
SPS measure.587   
7.346  Moreover, the United States submits that the text of Annex C of the SPS Agreement  provides 
contextual support for its view that "control, insp ection or approval" procedures involve particular 
products or substances, and not the evaluation of an  equivalence determination of another Member's 
regulatory system.588 
7.347  The United States further asserts that China's ar gumentation on this claim is conclusory and 
merely repeats its other claims, in particular that Se ction 727 is lacking in ju stification and results in 
discrimination. The United States argues that, to th e contrary, it "has shown that Section 727 falls 
squarely within the Article XX(b) exception and  is both necessary under the meaning of Article XX(b) and not discriminatory under the meaning of the chapeau."
589 
2. Analysis by the Panel 
7.348  The Panel will therefore examine China's claim th at the United States has acted inconsistently 
with Article 8 of the SPS Agreement by failing to observe the requireme nts of Annex C(1)(a) of the 
SPS Agreement, because Section 727 unduly delayed the appli cation of the normal FSIS procedures to 
Chinese poultry products . We will commence our analysis by reviewing the text of Article 8 and 
Annex C(1)(a) of the SPS Agreement , and how these provisions had been interpreted in the past.  
                                                                                                                                                                     
582 China's response to Panel question No. 133, para. 123; question 141, para. 142; and question 144, 
paras. 149-151. 
583 China's response to Panel question No. 133. 
584 China's response to Panel question No. 134. 
585 China's response to Panel question No. 139. 
586 China's response to Panel question No. 133. 
587 United States second written submission, paras. 118-122. 
588 United States second written submission, para. 123. 
589 United States second written submission, para. 124.  WT/DS392/R 
 Page 157 
 
 
 (a) Article 8 and Annex C(1)(a) of the SPS Agreement  
7.349  Article 8 of the SPS Agreement, entitled "Control, Inspecti on and Approval Procedures" 
requires, inter alia , that Members observe the provisions of  Annex C in the operation of "control, 
inspection and approval procedures". Article 8 of the SPS Agreement  reads as follows: 
"Members shall observe the provisions of  Annex C in the operation of control, 
inspection and approval procedures, includi ng national systems for approving the use 
of additives or for establishing tolerances fo r contaminants in foods, beverages or 
feedstuffs, and otherwise ensure that thei r procedures are not inconsistent with the 
provisions of this Agreement." 
7.350  We note that Annex C of the SPS Agreement which is also entitled "Control, inspection and 
approval procedures", in footnote 7, clarifies that  "[c]ontrol, inspection and approval procedures 
include, inter alia , procedures for sampling, testing and certification." 
7.351  Annex C(1)(a) of the SPS Agreement  reads as follows: 
"1. Members shall ensure, with respect to  any procedure to check and ensure the 
fulfilment of sanitary or phytosanitary measures, that:   
(a) such procedures are undertaken and completed without undue 
delay and in no less favourable ma nner for imported products than 
for like domestic products;" 
7.352  The panel in  EC – Approval and Marketing of Biotech Products , was the first panel that 
examined the disciplines in Annex C(1)(a) thoroughly.590  The panel found that Annex C(1) 
establishes obligations "with respect to any procedure to check and ensure the fulfilment of sanitary or 
phytosanitary measures". In that respect, the measur es before the panel were SPS measures within the 
terms of Annex A(1) and, according to the panel, also constituted procedures "to check and ensure the 
fulfilment of sanitary or phytosanitary measu res" within the meaning of Annex C(1).591  
7.353  In that panel's view, the first clause of Anne x C(1)(a) determines that Members must ensure 
that approval procedures are "undertaken  and completed without undue delay".592  With respect to the 
textual interpretation of the phrase "undertaken and completed", the panel explained that the verb 
"undertake" makes clear that Memb ers are required to begin, or start, approval procedures after 
receiving an application for approval, while the ve rb "complete" indicates that approval procedures 
are not only to be undertaken, but are also to be finished, or concluded.593  For that panel, the phrase 
"undertake and complete" covers all stages of appr oval procedures meaning that, once an application 
has been received, approval procedures must be started and then carried out from beginning to end.594 
7.354  The panel in EC – Approval and Marketing of Biotech Products  further considered that the 
ordinary meaning of the phrase "without undue delay" requires that "approval procedures be 
                                                      
590 We note that the panel in Australia – Salmon (Article 21.5 – Canada)  succinctly addressed the scope 
of Annex C(1), and concluded that the Australian requirements under the specific circumstances of that particular case were substantive measures in their own right, and not "procedures or information requirements 
'to check and ensure the fulfilment of sanitary ... meas ure' that are subject to paragraph 1(c) of Annex C."  
Therefore, the panel did not consider the Australian measures vis-à-vis  the obligations in Annex C(1).  Panel 
Report, Australia – Salmon (Article 21.5 – Canada) , paras. 7.156-7.157. 
591 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1491. 
592 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1494. 
593 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1494. 
594 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1494. WT/DS392/R 
Page 158  
 
 undertaken and completed with no unjustifiable loss of time."
595  Therefore, only "undue" delay in the 
undertaking or completion of approval procedures is contrary to the first clause of Annex C(1)(a). 
Regarding "undue delay", what matters, according to the panel, is whether there is a legitimate reason, 
or justification, for a given delay, not the length of a delay as such.596  The panel also explained that 
the determination of "without undue delay" must be made on a case-by-case basis according to the 
relevant facts and circumstances of a specific case. In its view, delays attributable to action, or 
inaction, of an applicant must not be held ag ainst a Member maintaining the approval procedure.597 
7.355  The panel in EC – Approval and Marketing of Biotech Products  further considered that the 
phrase "without undue delay" relates to both elements  of the phrase "undertake and complete". Thus, 
Members must "undertake" approval procedures "without  undue delay" and, subsequently, "complete" 
them "without undue delay".598   
7.356  Article 8 and Annex C(1) therefore apply to certain types of "procedures", namely those 
dealing with control, inspection and approval which are aimed at ch ecking and ensuring the fulfilment 
of SPS measures. In order to determine whether both provisions apply to the specific circumstances of 
this dispute, the Panel will first examine what  we understand "control, inspection and approval 
procedures" to be. We will then proceed to examin e the FSIS procedures in order to ascertain whether 
they are "control, inspection, or approval proced ures" within the scope of Annex C(1) of the 
SPS Agreement. If so, we will then turn to examine whethe r Section 727 had the effect of causing an 
undue delay in the application of the normal FSI S procedures to Chinese poultry products failing to 
observe the requirements in Annex C(1)(a) of the SPS Agreement  and thus being inconsistent with 
Article 8 of the SPS Agreement.  
(b) Whether the procedures applied by the FSIS in the equivalence determination process are 
control, inspection and approval procedures within the scope of Annex C(1) of the 
SPS Agreement  
7.357  We note that Annex C(1) of the SPS Agreement  expressly provides a general obligation for 
WTO Members to ensure that "any procedure", whic h aims to "check and ensure the fulfilment of 
sanitary and phytosanitary measures" , complies with the specific provisions found in the immediately 
subsequent items (a) through (i). Accordingly, th e nature and coverage of  items (a) to (i) under 
Annex C(1) encompass a variety of general principles and guidance for Members to respect when carrying out "control, inspection and approval proce dures" to check and ensure the fulfilment of a 
particular SPS measure. 
7.358  As explained above, the panel in EC – Approval and Marketing of Biotech Products concluded 
that the scope of Annex C(1) covers "procedures" to  "check and ensure the fulfilment of sanitary and 
phytosanitary measures".
599 
7.359  We recall that the United States  argues that Annex C of the SPS Agreement applies to 
"control, inspection and approval procedures" which do not include equivalence determinations as 
described under Article 4 of the SPS Agreement . To support this assertion, the United States affirms 
that Article 8 makes clear that Annex C does not appl y to every SPS measure, but rather to a subset of 
SPS measures, namely "control, inspection or approv al procedures". Furthermore, the United States 
alleges that Article 8 mentions three specific types of SPS procedures, but does not mention the 
                                                      
595 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1495. 
596 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1496. 
597 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1497. 
598 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1502. 
599 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1491; see also Panel 
Report, Australia – Salmon (Article 21.5 – Canada) , paras. 7.156-7.157.  WT/DS392/R 
 Page 159 
 
 
 procedures used in equivalence determinations. In  addition, the United States argues that Article 8 
provides context for what is meant by "control, in spection, and approval procedures" in Article 8 and 
Annex C, specifying (i) systems for approving the use of additives, and (ii) systems for establishing tolerances for contaminants. According to the Un ited States, both of these examples relate to the 
approval and control of "particular products or s ubstances", and nothing in Article 8 indicates that 
"control, inspection or approval procedures" were in tended to involve an examination of an exporting 
Member's SPS measure.
600  The United States observes that th ese assertions are further corroborated 
by the text of Annex C, which indicates that "c ontrol, inspection or approval" procedures involve 
particular products or substances, and not the ev aluation of the equivalence of another Member's 
regulatory system.601 
7.360  China  argues that Annex C of the SPS Agreement  applies to any "procedure to check and 
ensure the fulfilment of sanitary and phytosanitary me asures" and that the list of measures in Article 8 
is "illustrative rather than exhaustive". China furt her asserts that there is no basis to find that 
equivalence-related procedures are not "control, inspection, or approval procedures". China also 
argues that Article 8 of the SPS Agreement provides that Members "ensure that their procedures are 
not inconsistent with the provisions of this Agre ement", indicating that Article 4 is one of the 
provisions of the SPS Agreement  and, thus, Article 8 reinforces that Article 4 provides an additional 
obligation rather than some type of exception or safe haven.602 
7.361  Moreover, China argues that Article 8 and Annex C of the SPS Agreement do not distinguish 
between "control, inspection and approval procedures" covering one product or multiple products. In 
its view, these provisions apply to all types of "control, inspection, and approval procedures".603 
7.362  The Panel does not feel that it is necessary to define the whole universe of what could fall 
within the scope of "control, inspection, and approval procedures."  However, the Panel must 
determine whether Section 727 caused an undue dela y in the operation of "control, inspection, and 
approval procedures."  We note that Section 727 affected the operation of the FSIS equivalence 
determination process, which both parties have agreed includes "procedures".604  Therefore, the 
question before the Panel is the narrow one of wh ether these type of equivalence procedures fall 
within the scope of "control, inspec tion, and approval procedures."   
7.363  Considering the actual text of Annex C(1) of the SPS Agreement  the Panel notes that 
Annex C(1) does not specify, nor exclude, any type of "procedures". According to our reading, Annex C(1) basically requires that "any procedure"  is covered by its provisions so long as that 
"procedure" is aimed at "checking and ensuring the fulfilment of sanitary or phytosanitary measures", 
and is undertaken in the context of "control, inspection, or approval". In the Panel's view, no a priori  
exclusion is contemplated by the SPS Agreement.  
7.364  We find equally important to note that the SPS Agreement  does not specify or limit, the 
SPS measures referred to in Annex C(1). Indeed, Annex C(1) of the SPS Agreement merely provides 
that any procedure to check and ensure the fulfilm ent of SPS measures is subject to the provisions of 
items (a) through (i).  
                                                     
 
600 United States second written submission, paras. 118-122. 
601 United States second written submission, para. 123. 
602 China's response to Panel question No. 133. 
603 China's responses to Panel questions Nos. 134 and 135. 
604 United States' first written submission, para. 90; United States' response to Panel question No. 103; 
China's first written submission, paras. 1, 2, 4 and 37. WT/DS392/R 
Page 160  
 
 7.365  As explained in Section II.C above, the United States has established an equivalence-based 
regime for the importation of poultry into the Unite d States following the provisions of the PPIA. This 
equivalence-based regime is implemented and enforced by the FSIS.  
7.366  We recall that the FSIS authorizes the importati on of poultry products into the United States 
on a country-by-country basis, and countries wishing to export poultry products to the United States 
have to first request a determination of eligib ility by the FSIS. Once eligibility for importation of 
poultry is requested, the FSIS will then establish wh ether an applicant's poultry inspection system is 
equivalent to that of the United States through up  to three sequential processes:  (a) a document 
review; (b) an on-site audit;  and (c) the publicatio n of the proposed and final rules in the Federal 
Register and the country's addition to the list in the CFR. 
7.367  Once the FSIS determines that an applicant country's poultry inspection system is equivalent, 
the FSIS establishes and implements a rule allo wing the importation of poultry products from that 
country. After the initial equivalence determination, a process of certification of establishments fit to 
export is undertaken by the applican t country and submitted to the FSIS. This is then followed by an 
ongoing equivalence review, comprising:  (i) a recurri ng document analysis; (ii) further on-site audits; 
and (iii) continuous port of entry re-inspections of poultry products  shipped to the United States from 
the eligible exporting country.  
7.368  The Panel understands that the successful co mpletion of the equivalence determination 
process undertaken by the FSIS, which includes th e establishment and implementation of a rule 
allowing the importation of poultry products from a specific country, is the only means that any country, including WTO Members, has to export poultry and poultry products to the United States.  
7.369  We note that the Merriam-Webster's dictionary  defines "approval" as the act of approving. 
That same dictionary defines "approving" as:  
"2.  to have or express a favorable opini on of <couldn't approve such conduct>  
3 a: to accept as satisfactory <hopes she will a pprove the date of the meeting> b : to 
give formal or official sanction to: Ratify <Congress approved the proposed 
budget>"
605 
7.370  Based on the above-mentioned facts, we note that pursuant to the FSIS equivalence 
determination process a country may not export poul try products to the United States unless the FSIS 
accepts that country's SPS measures on the inspection and safety of poultry products as satisfactory for achieving the United States ALOP for poultry products. It is only if these SPS measures are satisfactory that a country may export poultry products to the United States  Without a positive FSIS 
equivalence determination, a c ountry would not, under any circumstances, be allowed to export 
poultry and poultry products to the United States. It is, therefore, reasonable to conclude that the FSIS 
equivalence determination process is an "approval pr ocedure" within the scope of Annex C(1) for 
imported poultry and poultry products to enter into  the United States, because the FSIS equivalence 
determination process means that the FSIS is givi ng formal or official sanction (i.e. authorization)
606 
and thus approval of a country to export poultry and poultry products to the United States.  
7.371  The Panel acknowledges that nothing in the SPS Agreement  seems to prevent a Member from 
using an equivalence process to dete rmine who is eligible to export cer tain products to its market. The 
                                                      
605 "approving" (2010). In Merriam-Webster Online Dictionary. Retrieved 8 June 2010, from 
http://www.merriam-webster.com/dictionary/approving. 
606 We note that Merriam-Webster lists "authorization" as a synonym for "sanction". "approving" 
(2010). In Merriam-Webster Online Dictionary. Retrieved 8 June 2010, from http://www.merriam-
webster.com/dictionary/approving.  WT/DS392/R 
 Page 161 
 
 
 Panel also acknowledges that the FSIS equivale nce determination process, as described in 
Section II.C above, involves a series of actions which may go beyond "control, inspection, and approval procedures." Nevertheless, we are of the vi ew that, where the recognition of equivalence (as 
the one granted through the FSIS equivalence determ ination process) is the only way that a Member 
may export its products to an importing Member, th en the equivalence determination process of the 
importing Member must comply with the pertin ent obligations on "approval procedures" under 
Annex C(1) of the SPS Agreement .  
7.372  The "approval procedures" encompassed by Annex C of the SPS Agreement may cover a 
broad array of procedures, as the drafters of the SPS Agreement  did not limit the scope of those 
"procedures" to any specific type of  "approval procedures". Bearing that in mind, the Panel considers 
that the application of specific provisions of the SPS Agreement , such as Annex C(1), is by no means 
restricted to the title or to the characterization of  an SPS measure given to that measure by the WTO 
Member maintaining it. To put it differently, it is not because the United States named its requirements as "FSIS equivalence determination process" and characterizes it as a purely "equivalence" process, that the only provisions applic able to the measure are those of Article 4 of the 
SPS Agreement . 
7.373  This Panel certainly understa nds that Article 4 of the SPS Agreement , has its own concepts 
and disciplines separate from those governing "c ontrol, inspection, and approval procedures" 
envisaged and regulated by Annex C and Article 8. Th is is illustrated by the existence of the decision 
reached by the SPS Committee on the implementation of Article 4 of the SPS Agreement.
607 However, 
we note that we have already concluded in Section VII.D that Article 4 cannot be read in isolation 
from the other provisions of the agreement and that an SPS measure covered by Article 4 may 
nevertheless be subject to other obligations in the SPS Agreement .  
7.374  Having said that, the Panel understands that to  deny that an equi valence determination 
process, which also has the ultimate effect of approving the importation of a product from a given WTO Member, as envisaged in any other "approval procedure", is subject to Annex C(1) of the 
SPS Agreement,  would unfairly reward the ingenuity of  some WTO Members and possibly create a 
dangerous safe haven for disguised protectionism. Such an understanding would result in an undesired 
precedent that may entice some WTO Members to circumvent the application of the SPS Agreement .  
7.375  In the Panel's view, the disassociation of the FSIS equivalence determination process from the 
disciplines on "approval procedures" of Annex C(1) could ultimately result in an insurmountable loophole in the SPS Agreement , contrary to the first and fourth preambular paragraphs of the 
Agreement which determine that "[SPS] measures ar e not applied in a manne r which would constitute 
a means of arbitrary or unjustifiable discrimination"  and WTO Members' desire for the "establishment 
of a multilateral framework of rules and discip lines to guide the development, adoption and 
enforcement of sanitary and phytosanitary measures  in order to minimize their negative effects on 
trade", respectively.    
7.376  For instance, if a WTO Member is able to control imports only through the recognition of 
equivalence according to Article 4 of the SPS Agreement , it could perhaps indefinitely postpone and 
delay the importation of products from a given WTO Member by arguing that the SPS Agreement  
does not prescribe a time-frame for conclusion of equi valence processes. In this hypothetical situation, 
the indefinite delay of an equivalence process w ould completely undermine the application of the 
SPS Agreement , and impede the importation of certain products into the WTO Member maintaining 
the equivalence process based on the provisions of the SPS Agreement . In the Panel's view, this is 
certainly not what the drafters of the SPS Agreement  had envisaged according to the preambular 
                                                     
 
607 G/SPS/19/Rev.2 of 23 July 2004. WT/DS392/R 
Page 162  
 
 language seen above, nor would it be in accordance with the decision reached by WTO Members in 
the SPS Committee on the implementation of Article 4 of the SPS Agreement.
608   
7.377  Accordingly, the Panel concludes that the United States' FSIS equivalence determination 
process for the importation of poultry and poultry pr oducts from other WTO Members qualifies as an 
"approval procedure" within the meaning of Annex C(1) of the SPS Agreement.  
7.378  The Panel recalls that according to China' s claim, the FSIS equivalence determination 
procedures are covered by Annex C(1)(a) of the SPS Agreement , i.e. "control, inspection and approval 
procedures".609 However, China also clarifies that if the Panel finds that the FSIS equivalence 
determination process encompasses only one type of  the procedures covered by Annex C(1), it would 
be sufficient.610 On this basis, the Panel will limit its anal ysis to the fact that the FSIS equivalence 
determination process is an "approva l procedure" within the meaning of Annex C(1). The Panel will 
therefore assess whether Section 727 has affected the FSIS equivalence determination process in a 
manner inconsistent with the United States ' obligations under Annex C(1)(a) of the SPS Agreement . 
(c) Whether Section 727 has resulted in an undue delay of the FSIS equivalence determination 
process in respect of poultry products from China within the meaning of Annex C(1)(a) of the 
SPS Agreement   
7.379  The Panel is therefore called upon to decide wh ether, as claimed by China, Section 727 would 
have unjustifiably delayed the application of FSIS equivalence procedures until its expiration, 
resulting in an "undue delay" within the meaning of Annex C(1)(a) of the SPS Agreement .611  
7.380  We recall that the measure at issue in this di spute, Section 727, reads: "None of the funds 
made available in this Act may be used to establis h or implement a rule allowing poultry products to 
be imported into the United States from the People's Republic of China."612   
7.381  We also recall that, as explained by the panel in Colombia – Ports of Entry613, municipal law 
is to be approached as a "factual issue".614  In making an objective assessment of municipal 
legislation, a panel should consid er the very terms of the law615, in their proper context616, and 
complemented, whenever necessary, with additio nal sources, which may include proof of the 
consistent application of such laws, the pronouncem ents of domestic courts on the meaning of such 
laws, the opinions of legal experts a nd the writings of recognized scholars.617 
                                                      
608 G/SPS/19/Rev.2 of 23 July 2004. For instance, paragraph 9 of the preamble provides " Recognizing  
the importance of minimizing possible negative effects of sanitary or phytosanitary measures on trade and of improving market access opportunities, pa rticularly for products of interest  to developing country Members". 
609 China's response to Panel question No. 133. 
610 China's response to Panel question No. 144. 
611 China's first written submission, paras. 156-160. 
612 Section 727, AAA of 2009 (Exhibit CN-1). 
613 Panel Report, Colombia – Ports of Entry , para. 7.93. 
614 Appellate Body Report, India – Patents (US) , para. 66; See also Panel Report, US – Section 301 
Trade Act , para. 7.18,  See also PCIJ, Certain German Interests in Polish Upper Silesia , PCIJ, 1926, Rep., 
Series A, No. 7, p. 19. The Panel is aware that the Appellate Body has explicitly stated that when a panel 
examines the municipal law of a WTO Member for pur poses of determining whether the Member has complied 
with its WTO obligations, that determination is a legal ch aracterization by a panel, an d is therefore subject to 
appellate review under Article 17.6 of the DSU. Appellate Body Report, US – Section 211 Appropriations Act , 
para. 105. 
615 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes , para. 112; See also 
Panel Report, US – 1916 Act (EC) , para. 6.48. 
616 Panel Report, US – Section 301 Trade Act , para. 7.27. 
617 Appellate Body Report, US – Carbon Steel , para. 157.  WT/DS392/R 
 Page 163 
 
 
 7.382  We accept the United States' explanation that the effect of Section 727 in United States 
domestic law was limited to the e xplicit terms of that law, comprising a temporary restriction on 
USDA's ability to use appropriated funds to implem ent or establish a rule allowing poultry products to 
be imported into the United States during the 2009 fiscal year.618  Therefore, Section 727 precluded 
the FSIS from ultimately granting equivalence to poultry products from China.  
7.383  The Panel recalls the comprehensive findings reached by the panel in EC – Approval and 
Marketing of Biotech Products  that the first clause of Annex C(1)(a) requires that WTO Members must 
ensure that approval procedures are "undert aken and completed without undue delay"619. The panel in 
EC – Approval and Marketing of Biotech Products interpreted that the requirement in Annex C(1)(a) 
to undertake and complete approva l procedures without undue delay  makes clear that WTO Members 
are required to begin, or start, approval proce dures after receiving an application for approval. 
Additionally, the use of the term" completed" re quires that, approval procedures are not only to be 
undertaken, but are also to be finished, or concluded.620 Hence, once an application has been received, 
approval procedures must be started and then carried out from beginning to end.621 That panel also 
concluded, that the ordinary meaning of the phr ase "without undue delay" requires Members to both 
undertake and complete approval procedur es with no unjustifiable loss of time.622 We agree with these 
findings of the panel in EC – Approval and Mark eting of Biotech Products  and make them our own.  
7.384  Accordingly, based on the very terms of Secti on 727, the Panel finds that regardless of the 
actions undertaken or available to the FSIS during the period that Section 727 was in force, the FSIS 
would have never been able to "complete" China' s equivalence determination process, as explicitly 
prescribed by the US Congress through the terms of S ection 727. In our view, this interpretation finds 
support in the United States' own definition of the effects of Section 727 as "comprising a temporary 
restriction on USDA's ability to use appropriated funds to implement or establish a rule allowing 
poultry products to be imported into the United States"623, which to us is the only possible effect of 
the succinct text of Section 727.  
7.385  As we have explained above, the "establishmen t and implementation of a rule" allowing the 
importation of poultry products from a specific country is the only means by which a WTO Member 
may export poultry and poultry products to the United States' market. By prohibiting the "establishment and implementation of a rule", Sec tion 727 undeniably eliminates any possibility for 
"completion" of the FSIS equivalence determination process, which, if not "justified", as explained by 
the panel in EC – Approval and Marketing of Biotech Products , must be characterised as an "undue 
delay" according to Annex C(1)(a) of the SPS Agreement.   
7.386  We shall therefore look at whether there was an y legitimate justification for the delay caused 
by Section 727.
624 
7.387  The Panel notes that the United States has submitted that its arguments regarding the 
"necessity" of Section 727 under Article XX(b) of the GATT 1994 are also relevant in determining 
whether any delay resulting from Se ction 727 was "due" or "undue".625 China has also stated that the 
                                                      
618 United States' first written submission, para. 22. 
619 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1494. 
620 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1494. 
621 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1494. 
622 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1495. 
623 United States' first written submission, paras. 5 and 22. 
624 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1496. 
625 United States' response to Panel question No. 146. WT/DS392/R 
Page 164  
 
 Panel may look at the parties arguments under Article XX(b) when considering the issue of "undue 
delay" in Article 8.
626 
7.388  We thus note that the United States  has attempted to justify Sec tion 727 on the basis that it 
was necessary to protect against the risk posed by the importation of poultry products from China.627 
It argues that China has had numerous food safety cris is in the past years, that China is a country 
where avian influenza" exists and that China has struggled with corruption, smuggling and lax 
enforcement of its food safety laws.628 The United States refers to the melamine crisis that struck 
China in 2007 and which was documented by  the World Health Organization (WHO).629 The 
United States argues that Section 727 contributed to the protection of human and animal life and 
health by ensuring that FSIS would consider Chin a's recent food safety crises and China's enactment 
of a new food safety law, provide FSIS the opportunity to improve its equivalence process, and 
provide the United States' Government the chance to examine FSIS's equivalence process and its 
overall efforts to ensure that imported food safety is safe.630 
7.389  China  argues that Section 727 was one of a series of measures – it mentions Section 733 and 
Section 743 – that unjustifiably delayed the application of the normal FSIS procedures to China by 
two years.631 Further, it argues that Section 727 delayed the application of the FSIS procedures until 
the enactment of the Agriculture Appropriations Act 2010. Finally, China argues that the prohibition 
imposed under Section 727 on Chinese access to FSIS approval procedures is without scientific 
justification, and that it results in arbitrary a nd unjustifiable discrimination against Chinese poultry 
products.632 
7.390  The justification that the United States provides for the delay in the FSIS equivalence process 
caused by Section 727 is the risk posed by the importation of poultry products from China. The Panel 
is of the view that its findings concerning the lack of scientific justification in support of the arbitrary 
or unjustifiable distinction in ALOPs applied to  poultry products from China and poultry products 
from other WTO Members are relevant in assessing the United States' alleged justification for the 
undue delay caused by Section 727.  
7.391  We recall our findings in Section VII.F.2(e) wh ere we found that Section 727 is inconsistent 
with Articles 5.1, 5.2 and 2.2 of the SPS Agreement  because it is not based on a risk assessment and is 
maintained without sufficient sci entific evidence. We further recall our consequent findings in 
Section VII.G.2(b)(ii) that there is no justificati on based on scientific evidence for the distinction in 
ALOPs applied to the risk of potentially unsafe po ultry; and that, accordingly, the distinction in 
ALOPs for poultry products for China and for pou ltry products from other WTO Members is arbitrary 
or unjustifiable within the terms of Article 5.5 of the SPS Agreement . Accordingly, we do not see how 
the delay in the completion of the FSIS approval procedures could be justified on the basis of 
arguments already rejected by the Panel.  
7.392  The Panel recalls that under Annex C(1)(a) of the SPS Agreement , WTO Members are 
obliged to "undertake and complete" the proce dures for assessing compliance with a substantive 
SPS measure "without undue delay". The Panel conclud es that Section 727 completely foreclosed the 
possibility for "completion" of the FSIS equivale nce process for Chinese poultry products resulting in 
                                                      
626 China's response to Panel question No. 146. 
627 United States' first written submission, paras. 123-129, United States' oral statement at the first 
substantive meeting, paras. 42-48, United States' second written submission, para. 13. 
628 United States' second written submission, para. 13. 
629 Exhibit US-23. 
630 United States' second written submission, para. 17. 
631 China's first written submission, para. 158, China' s opening oral statement at the first substantive 
meeting of the Panel, para. 78. 
632 China's opening oral statemen t at the first substantive meeting of the Panel, para. 78.  WT/DS392/R 
 Page 165 
 
 
 an unjustified and therefore undue delay with in the meaning of Annex C(1)(a) of the SPS Agreement . 
Therefore, the United States has failed to obser ve the requirements under Annex C(1)(a) of the 
SPS Agreement .  
(d) Whether by failing to observe the provisions of Annex C(1)(a) of the SPS Agreement , the 
United States has acted inconsistently with Article 8 of the SPS Agreement  
7.393  We recall that China has claimed that the United States has violated Article 8 of the 
SPS Agreement  by failing to follow the requirements under Annex C(1)(a) of the SPS Agreement  
concerning WTO Members' obligations to "under take and complete" the procedures for assessing 
compliance with a substantive SPS measure "without undue delays".  
7.394  The Panel notes that Article 8 of the SPS Agreement requires, inter alia, that WTO "Members 
shall observe the provisions of Annex C in th e operation of control, inspection and approval 
procedures". In this respect, both parties agree that the non-observance of the obligations in 
Annex C(1)(a) implies a violation of Article 8 of the SPS Agreement .633 This understanding is in line 
with the conclusions reached by the panel in EC – Approval and Marketing of Biotech Products .634   
7.395  Having found that Section 727 has caused an "undue delay" in the FSIS "approval 
procedures", by foreclosing any possibility of "c ompleting" the FSIS equivalence determination 
process for Chinese poultry products to enter into th e United States;  having thus concluded that the 
United States has failed to observe the provisions of Annex C(1)(a) of the SPS Agreement , the Panel 
accordingly finds that Section 727 is inconsistent with Article 8 of the SPS Agreement . 
(e) Conclusion 
7.396  The Panel therefore finds that, by failing to ob serve the provisions of Annex C(1)(a) of the 
SPS Agreement , Section 727 is inconsistent with Article 8 of the SPS Agreement .  
K. WHETHER SECTION 727 IS INCONSISTENT WITH ARTICLE  I:1 OF THE GATT 1994 
1. Arguments of the parties 
7.397  China  argues that Section 727 is inconsistent with Article I:1 of the GATT 1994 because it 
affords an advantage to all other WTO Members th at is not extended immediately and unconditionally 
to the like poultry products from China.635  In its view, all WTO Members other than China are being 
offered the opportunity to export poultry products to the United States after successful completion of 
the procedures applied by the FSIS. It further asserts that Section 727 operates to exclude only 
Chinese poultry products from the competitive opport unity of entering the United States' market, 
while allowing poultry products from all other WT O Members that same opportunity. In doing so, 
Section 727 violates Article I:1 of the GATT.636  
7.398  The United States  responds that China has not provided any basis for the Panel to make a 
finding under Article I:1 of the GATT 1994.637 The United States argues that China fails to recognize 
that Section 727 only has meaning within the contex t of the overall operation of an equivalency-based 
food-safety regime under the PPIA.638 The United States contends that  "under an equivalency-based 
regime, products of different WTO Members are neces sarily treated differently: that is products of 
                                                      
633 China's response to Panel question No. 143. Un ited States' response to Panel question No. 143. 
634 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1569. 
635 China's first written submission, para. 85. 
636 China's first written submission, para. 93. 
637 United States' first written submission, para. 94. 
638 United States' first written submission, para. 95. WT/DS392/R 
Page 166  
 
 Members that are found to be equivalent may be imported, while similar products of Members that 
have yet to be found equiva lent may not be imported".
639  It further contends that the Panel need not 
address Article I:1 in order to solve this dispute, be cause in its view the core  of the issue is whether 
Section 727 is justified by legitimate concerns w ith human and animal life and health. In the 
United States' view, it would not promote the resoluti on of this dispute for the Panel to analyse the 
application of Article I to equivalency-based regulat ory regimes, or to the likeness of products with 
different levels of safety. The order of analysis thus proposed by the United States is to review the 
measures under Article XI, followed (if necess ary) by findings under Article XX(b).640 
2. Analysis by the Panel 
7.399  In this instance, the Panel is called upon to ex amine whether Section 727 is inconsistent with 
Article I:1 of the GATT 1994. The Panel takes note of the United States' contention that the Panel 
need not to address this claim to resolve this dis pute. We are however of the view that it would be 
appropriate for us to rule on China's claim under this provision.641 
7.400  We shall start by looking at the text of Article I:1 of the GATT 1994 and how it has been 
interpreted by panels and the A ppellate Body. In that light, we will proceed and examine whether 
Section 727 violates this provision. 
(a) Article I:1 of the GATT 1994 
7.401  We note that Article I:1 of the GATT 1994 contains the Most-Favoured Nation (MFN) 
principle, which "has long been a cornerstone of the GATT and is one of the pillars of the WTO 
trading system."642  Article I:1 provides: 
"With respect to customs duties and charges of any kind imposed on or in connection 
with importation or exportation or imposed on the international transfer of payments 
for imports or exports, and with respect to the method of levying such duties and 
charges, and with respect to all rules a nd formalities in connection with importation 
and exportation, and with respect to all matte rs referred to in pa ragraphs 2 and 4 of 
Article III,* any advantage, favour, privilege or immunity granted by any contracting 
party to any product originating in or destin ed for any other country shall be accorded 
immediately and unconditionally to the like pr oduct originating in or destined for the 
territories of all other contracting parties." 
7.402  The Appellate Body in Canada – Autos  explained that the object and purpose of Article I:1 of 
the GATT 1994. "is to prohibit discrimination among lik e products originating in or destined for 
different countries."  The Appellate Body further expl ained that "[t]he prohibition of discrimination in 
Article I:1 also serves as an incentive for concession s, negotiated reciprocally, to be extended to all 
other Members on an MFN basis."643 
                                                      
639 United States' first written submission, para. 96. 
640 United States' first written submission, para. 99. 
641 See Section VII.B. 
642 Appellate Body Report, Canada – Autos , para. 69. 
643 Appellate Body Report, Canada – Autos , para. 84.  WT/DS392/R 
 Page 167 
 
 
 7.403  The Appellate Body in EC – Bananas III  confirmed that, to establish a violation of Article I, 
there must be an advantage, of the type c overed by Article I and which is not accorded 
unconditionally to all "like products" of all WTO Members.644 
7.404  In accordance with the approach  followed by the panel in EC – Bananas III (Article 21.5 – 
US), and upheld by the Appellate B ody, the Panel will conduct its analys is by considering: (i) whether 
Section 727 is a measure of the kind subject to the disciplines of Article I:1 of the GATT 1994, (ii) 
whether it confers an advantage of the type covere d by Article I, and, if so, (iii) whether the 
advantages are extended to all like products immediately and unconditionally.  
(b) Whether Section 727 is a measure subject to the disciplines of Article I:1 of the GATT 1994 
7.405  The first step in our analysis is to determin e whether Section 727 is a measure subject to the 
disciplines of Article I:1 of the GATT 1994. In this respect, China argues that Section 727 is a rule in 
connection with the importation of poultry products fro m China within the meaning of Article I:1. For 
China, this is evident from the wording of S ection 727, which refers to the establishment or 
implementation of a rule allowing the importation of poultry products into the United States from 
China.645 
7.406  The United States has not presented any arguments in this respect. 
7.407  We note that prior panels and the Appellate  Body have interpreted the terms "rules and 
formalities in connection with importation" to enco mpass a wide range of measures. As China points 
out, countervailing duties, additional bonding requi rements and activity function rules have been 
found to be rules and formalities in connection with  importation within the meaning of Article I:1.646  
7.408  In the context of Article XI:1 of the GATT 1994, the panel in India – Autos when interpreting 
the terms "restriction ... on importation", explained that  this meant a restriction "with regard to" or "in 
connection with" the importation of a product. The pa nel further explained that these terms would not 
necessarily be limited to measures which directly rela te to the "process" of importation but could also 
encompass measures which otherwise relate to other aspects of the importation of the product.647   
7.409  The Panel recalls that Section 727 prohibits  the FSIS from using appropriated funds to 
establish or implement a rule allowing poultry products from China to be imported into the 
United States. As described in Section II.C above, the establishment and implementation of a rule by 
the FSIS is a prerequisite for the importation of poultry pr oducts into the United States. We also recall 
that we have concluded that the effect of Section 72 7, which is a legislative provision, was to prohibit 
the importation of Chinese poultry products into the United States.  
7.410  The Panel finds the reasoning of the panel in India – Autos  with respect to the terms "in 
connection with importation" to be persuasive. We conclude that "i n connection with importation" as 
used in Article I, not only encompasses measures wh ich directly relate to the process of importation 
but could also include those measures, such as Sec tion 727, which relate to other aspects of the 
importation of a product or have an  impact on actual importation. Gi ven the foregoing, we determine 
                                                      
644 Panel Report, EC – Bananas III (Article 21.5 – US) , para. 7.555,  Panel Report, Indonesia – Autos , 
para. 14.138, citing to Appellate Body Report, EC – Bananas III , para. 206. Panel Report, Colombia – Ports of 
Entry , para. 7.322. 
645 China's first written submission, para. 85. 
646 China's first written submission, para. 77 citing GATT Panel Report, US – MFN Footwear, 
para. 6.8; Panel Report, US – Certain EC Products , para. 6.54 and Appellate Body Report, EC – Bananas III , 
para. 206 respectively. 
647 Panel Report, India – Autos , para. 7.257. WT/DS392/R 
Page 168  
 
 that Section 727 is a rule in connection with impor tation within the meaning of Article I:1 of the 
GATT 1994. 
(c) Whether the United States confers an advantage of the type covered by Article I:1 of the 
GATT 1994 
7.411  The Panel's next step is thus to examine whet her the United States is conferring an advantage 
of the type covered by Article I:1 of the GATT 1994. 
7.412  We note that, according to China, the advantag e accorded to other countries and not extended 
to China is "the opportunity to export poultry products to the United States, pending a successful 
finding of initial or ongoing equivalence and cer tification of individual Chinese poultry producers."
648  
China argues that in accordance w ith the United States' regulations and procedures governing the 
importation of poultry products, WTO Members' poultr y products have the opportunity to be imported 
into the United States (the advantage) if produced und er a food safety system equivalent to that of the 
United States. However, China contends that w ithout funding, the FSIS cannot use its personnel and 
resources to implement existing rules or establishing rules, and in its view, it denies Chinese poultry 
products the advantage identified above.649 
7.413  The United States, however, has not contested Ch ina's argumentation on the existence of an 
advantage of the type covered by Article I:1 of the GATT 1994.650 
7.414  The Panel notes that the term "advantage" in Article I:1 of the GATT 1994 has been broadly 
interpreted by panels and the Appe llate Body. The Appellate Body in Canada – Autos  examined the 
language in Article I:1 "any advant age … granted by any Member to any product" and gave a rather 
broad interpretation of the term "advantage": 
"We note next that Article I:1 requires that ' any advantage , favour, privilege or 
immunity granted by any Member to any product  originating in or destined for any 
other country shall be accorded immediat ely and unconditionally to the like product 
originating in or destined for the territories of  all other Members .' (emphasis added)  
The words of Article I:1 refer not to some  advantages granted 'with respect to' the 
subjects that fall within the defined scope of the Article, but to ' any advantage '; not to 
some  products, but to ' any product '; and not to like products from some  other 
Members, but to like products originating in or destined for ' all other ' Members."651 
7.415  The Panel in EC – Bananas III considered that "advantages" within the meaning of Article I:1 
are those that create "more favourable competi tive opportunities" or affect the commercial 
relationship between products of different origins.652   
7.416  We note that under the PPIA and the FSIS procedures653, any country may request a 
determination of eligibility for the importa tion of poultry products to the United States.654  Once a 
                                                      
648 China's first written submission, para. 86. 
649 China's first written submission, paras. 87-88. 
650 See United States' first written submission, paras. 94-100. In fact, the United States has not 
responded to China's arguments concerning the "advantage" being granted or whether this advantage is granted 
"unconditionally and immediately". The United States has only focussed on contesting China's likeness arguments. 
651 Appellate Body Report, Canada – Autos , para. 79. 
652 Panel Report, Colombia – Ports of Entry, para. 7.341, citing  the Panel Report, EC – Bananas III 
(Guatemala and Honduras), para. 7.239. 
653 See Section II.C.  WT/DS392/R 
 Page 169 
 
 
 successful determination of equivale ncy is made and a final rule is published in the Federal Register, 
countries can start exporting poultry products to the United States.655  Thus, successful completion of 
the mentioned procedures is the only way that an  importer can enter the United States market for 
poultry products.656  The opportunity to sell poultry products in  the United States market is therefore a 
very favourable market opportunity and not having such an opportunity would mean a serious 
competitive disadvantage, or rather would amount to an exclusion from competition in the US market. 
Such an opportunity would also affect the commerc ial relationship between pr oducts of two different 
origins where one of the countries of origin is denied access to the PPIA and the FSIS procedures. 
7.417  The Panel thus considers that the opportunity to  export poultry products to the United States 
after successful completion of the PPIA and the FSIS procedures is an advantage within the meaning 
of Article I:1 of the GATT 1994 because it creates market access opportunities and affects the 
commercial relationship between pr oducts of different origins. 
(d) Whether like products from other Members are gr anted an advantage within the meaning of 
Article I:1 of the GATT 1994 
7.418  Having found that the opportunity to export poultry products to the United States after 
successful completion of the FSIS procedures is an a dvantage within the meaning of Article I:1 of the 
GATT 1994, the Panel will next consider whether like products from other Members are granted such 
an advantage. 
7.419  The Panel notes that China has argued that the measure at issue discriminates against Chinese 
poultry products on the basis of origin, given that if  China were to attempt to engage in either the 
initial equivalence determination fo r products made from domestically slaughtered poultry or in an 
ongoing equivalence verification for processed pou ltry products, Section 727 would operate to 
exclude Chinese poultry products from those FSIS pr ocedures based simply on their origin. China 
notes that in cases of origin-based distinctions, pane ls and the Appellate Body have resorted to a 
hypothetical like products analysis. Accordingly, China considers that a hypothetical like product 
analysis should be conducted657 and therefore poultry products originating from other WTO Members 
whose poultry production system has been found to  be equivalent to the United States are like 
products to Chinese poultry products.658 
7.420  The United States argues that China has not provided an explanation why poultry products 
from China are "like products" to poultry prod ucts from other WTO Members, including those 
already authorized to export poultry products to the United States.659 
7.421  The United States argues that the different treatment is not based on origin but on the fact that 
different countries have different food safety systems which afford different levels of protection. The 
United States contends that the hypothetical like pro duct approach has not been applied by panels or 
the Appellate Body to situations su ch as the one in this dispute, and that the cases cited by China in 
support ( Colombia – Ports of Entry  and Canada – Autos ) are not pertinent, because these disputes did 
                                                                                                                                                                     
654 "Countries desiring to establish eligibility for importation of poultry products into the United States 
may request a determination of eligibility by presenting copies of the laws and re gulations..." 9 CFR 381.196 
(a)(2)(iii) (Exhibit CN-6). 
655 9 CFR 381.196 (a)(1) (Exhibit CN-6). 
656 See Section II.C. 
657 China's first written submission, para. 91. 
658 China's first written submission, para. 91. China supports its view on the following cases:  Panel 
Report , Colombia – Ports of Entry , para. 7.356, Panel Report, Canada – Periodicals , pp. 20-21 and Panel 
Report, Indonesia – Autos , para. 14.113. 
659 United States response to Panel question No. 31. WT/DS392/R 
Page 170  
 
 not involve differences in safety between products of different WTO Members.
660  In its view, 
equivalency-based regimes respond to the fact that health and safety systems vary from country to country, and it does not accept that Chinese poultry products present no particular safety issues as 
compared to products from any other WTO Member. In this sense, the United States contends that 
disputes such as EC – Asbestos  in which a panel examined issues of "likeness" in the context of 
products with different levels of safety should not be ignored. In sum, the United States seems to 
argue that the determination of likeness in th is dispute should be done in accordance with the 
traditional criteria. 
7.422  China responds that the United States has not rebutted its argument that the "like products" in 
this dispute are "poultry products" (as defined by the PPIA)
661, hypothetically capable of accessing the 
FSIS procedures and being exported from any other WTO Member to the United States.662  Further, 
China argues that the United States has ne ither denied that Section 727 imposes a de jure origin-based 
distinction between Chinese poultry and poultry from a ll other origins, nor distinguished the panel and 
Appellate Body reports cited by China.663 
7.423  The Panel notes that Article I:1 requires a co mparison between like products originating from 
one country vis-à-vis  products originating from a WTO Member. The products to be compared in this 
dispute are the products at issue – poultry produc ts as defined by the PPIA originating from China vis-
à-vis  poultry products originating in the territory of  other WTO Members which have been deemed 
equivalent by the FSIS. China argues that the Pa nel should follow a hypothetical like product analysis 
as several panels have done when confr onted with origin-based discrimination664, while the 
United States argues that the Panel should rely on the approach of the panel in the EC – Asbestos  
dispute because it dealt with the i ssue of "likeness" in the context of products with different safety 
levels.665 
7.424  The concept of like product has been abundantly interpreted in the prior decisions of panels 
and the Appellate Body. Whatever the provision at i ssue, the Appellate Body has explained that a like 
product analysis must always be done on a case-by-case basis.666   
7.425  The traditional approach for determining "likeness"  has, in the main, consisted of employing 
four general criteria:667 "(i) the properties, nature and quality of the products; (ii) the end-uses of the 
products; (iii) consumers' tastes and habits – more  comprehensively termed consumers' perceptions 
and behaviour – in respect of the products; a nd (iv) the tariff classification of the products."668   
7.426  A different approach used by panels and the Appellate Body to determine the likeness of the 
products has been to assume – hypothetically – that two like products exist in the market place when 
one of two situations arises:  first cases con cerning origin-based discrimination, and second, cases 
                                                      
660 United States' first written submission, para. 99 and footnote 110. 
661 Exhibit CN-4. 
662 China's response to Panel question No. 33. 
663 China cites the panel reports in Colombia – Ports of Entry  at para. 7.356, Canada – Periodicals  at 
pp. 20-21, and Indonesia – Autos  at para. 14.114. 
664 China's first written submission, para. 89. 
665 United States' first written submission, para. 98. 
666 Appellate Body Report, EC – Asbestos , para. 102. 
667 Appellate Body Report, Japan – Alcoholic Beverages II , p. 21, DSR 1996:I, 97, at 113 and, in 
particular, fn. 46; Panel Report, US – Gasoline , para. 6.8 (where the approach set forth in the Border Tax 
Adjustment case was adopted in a dispute concerning Article III:4 of the GATT 1994). 
668 The fourth criterion, tariff classification, was not mentioned by the Working Party on Border Tax 
Adjustments , but was included by subsequent panels ( e.g., GATT Panel Report, EEC – Animal Feed Proteins, 
para. 4.2; GATT Panel Report, Japan – Alcoholic Beverages I , para. 5.6; and Panel Report, US – Gasoline, 
para. 6.8; Appellate Body Report, Japan – Alcoholic Beverages II , pp. 21-22,  DSR 1996:I, 97, at 114.  WT/DS392/R 
 Page 171 
 
 
 where it was not possible to make the like product comparison because of – for example – a ban on 
imports.669 
7.427  The panel in China – Publications and Audiovisual Products670 recalled the relevant WTO 
jurisprudence which supports a hypothetical like product analysis where a difference in  treatment 
between domestic and imported products is based exclusively on the products ' origin. In these cases, 
the complainant did not need to identify specific domestic and imported produc ts and establish their 
likeness in terms of the traditional criteria in order to make a prima facie case of "likeness". Instead, 
when origin is the sole criterion distinguishing the products, it has been sufficient for a complainant to 
demonstrate that there can or will be domest ic and imported products that are "like".671  For example, 
the panels in Argentina – Hides and Leather and Canada – Wheat Exports and Grain Imports  found 
in the context of Article III:2 of the GATT 1994, that "where a Member draws an origin-based 
distinction in respect of internal taxes, a co mparison of specific products is not required and, 
consequently, it is not necessary to ex amine the various likeness criteria."672  We also note that panels 
have found that foreign origin cannot serve as a b asis for a determination that imported products are 
"unlike" domestic ones.673 
7.428  The panel in Colombia – Ports of Entry  applied a hypothetical like product analysis in respect 
of products originating from Panama and other WT O Members in the context of Article I:1. The 
measure at issue affected products  coming from Panama into Colombia, whether originating or not in 
Panama. Panama did not appear to produce goods fo r export to Colombia, but nevertheless the Panel 
considered Panama's claim. Ba sed on the above jurisprudence u nder Article III of the GATT 1994674, 
the panel adopted a hypothetical likeness approach on  the premise of an origin-based distinction that 
would arise if Panama were to produce the subject goods and export them to Colombia.675  The panel 
considered that if Panama were to produce tex tiles, apparel and footwear, goods originating in 
Panama would be "like products" to those originating in other countries.676 
7.429  We note that the United States has argued that the differing safety levels of poultry from 
China vis-à-vis  other WTO Members may have an impact on the like products analysis.677  However, 
the United States did not provide specific evidence re lating to different safety levels between poultry 
products from China and other WTO Members. Theref ore, we see no reason not to proceed with the 
"hypothetical" like products analysis and base our de termination on whether the products alleged to be 
"like" are distinguished solely because of their origin.  
                                                      
669 Panel Report, Canada – Periodicals , paras. 5.22-5.23 upheld by the Appellate Body Report, Canada 
– Periodicals , p. 12. 
670 Panel Report, China – Publications and Audiovisual Products , para. 7.1446. 
671 Panel Report,  Indonesia – Autos , para. 14.113; Panel Report,  Argentina – Hides and Leather , 
paras. 11.168 -11.170; Panel Report,  Canada – Autos , para. 10.74; Panel Report,  India – Autos , 
paras. 7.174-7.176. 
672 Panel Report, Canada – Wheat Exports and Grain Imports, footnote 246 to para. 6.164. 
673 Panel Report, US – FSC  (Article 21.5 – EC II) , para. 8.133. 
674 The panel referred to the Appellate Body Report, Canada – Periodicals , pp. 20-21; Panel Report, 
Indonesia – Autos , para. 14.113. Panel Report, Colombia – Ports of Entry, footnote 648 to para. 7.356. 
675 Panel Report, Colombia – Ports of Entry, para. 7.356. 
676 Panel Report, Colombia – Ports of Entry, para. 7.357. 
677 United States' first written submission, para. 98. WT/DS392/R 
Page 172  
 
 7.430  We recall the language in Section 727: 
"None of the funds made available in this Act may be used to establish or implement 
a rule allowing poultry products to be imported into the United States from the People's Republic of China."
678 
7.431  The funding restriction imposed by Section 727 is origin-based in respect of the products it 
affects, i.e. poultry products from China, and not from any other WTO Member. By targeting only 
China, Section 727 imposes origin-based discrimination.  
7.432  Given this origin-based distinction the Panel be lieves it is appropriate to follow prior panels 
that have used a hypothetical like products analysis.679  In this sense, for the purposes of determining 
whether an advantage has been accorded immediately and unconditionally to other WTO Members 
and not to China, the Panel will assume that pou ltry products originating from China are like products 
to those originating from other WTO Members.  
(e) Whether the United States confers an advantage that is not extended "immediately and 
unconditionally" to poultry products from China 
7.433  Having found that an advantage, i.e. the opportunity to export poultry products to the 
United States, pending a successful finding of initia l or ongoing equivalence and certification of 
individual poultry producers, has been granted to products which are "like" poultry from China, the Panel will now determine whether by virtue of Sec tion 727 that "advantage" is extended immediately 
and unconditionally to the like poultry products from China as required by Article I:1 of the 
GATT 1994.  
7.434  China  argues that Section 727 is "inconsistent w ith Article I:1 because it applies a condition 
in a manner that discriminates between like products of different origins."
680  It states that Section 727 
applies solely to poultry products and that it rem oves the advantage of an opportunity to access the 
United States' market.681  For these reasons, China concludes that  Section 727 does not operate on an 
MFN basis and cannot be seen to unconditionally acco rd advantages to the like products of all WTO 
Members.682 
7.435  The United States does not respond to the substance of  China's claim under Article I:1, 
because in its view China has not  met the threshold of establishing that poultry products from China 
are like those from other WTO Members.683 
7.436  The Panel now turns to the interpretation of the phrase "immediately and unconditionally". 
This phrase has already been interprete d by prior WTO panels. The panel in Canada – Autos 
considered that the issue of whether an advantage within the meaning of Article I:1 of the GATT 1994 
is accorded "unconditionally" cannot be determined independently of an examination of whether it 
involves discrimination between like products of different countries.684  The panel clarified that the 
word "unconditionally" (i.e. "not subject to  conditions") in Article I:1 of the GATT 1994  does not 
pertain to the granting of an advantage per se , but to the obligation to accord  to the like products of all 
                                                      
678 Section 727, Agriculture Appropriations Act 2009 (Exhibit CN-1). 
679 Panel Report, Colombia – Ports of Entry , Panel Report, Indonesia – Autos  and Appellate Body 
Report, Canada – Periodicals.  
680 China's first written submission, para. 92. 
681 China's first written submission, para. 92. 
682 China's first written submission, para. 92. 
683 United States' response to Panel questions Nos. 31, 33 and 87. 
684 Panel Report, Colombia – Ports of Entry, para. 7.361, citing the Panel Report,  Canada – Autos , 
para. 10.22.  WT/DS392/R 
 Page 173 
 
 
 Members an advantage which has been granted to any product originating in any country. The panel 
further explained that the purpose of Article I:1 of the GATT 1994  "is to ensure unconditional MFN 
treatment."  In this context, the panel considered  that the obligation to accord unconditionally to WTO 
Members an advantage which has been granted to an y other country means that the extension of that 
advantage may not be made subject to conditions w ith respect to the situation or conduct of those 
countries. The panel explained that this means that an advantage gran ted to the product of any country 
must be accorded to the like product of all WT O Members without discrimination as to origin. The 
panel went on to say: 
"[I]t appears to us that there is an import ant distinction to be made between, on the 
one hand, the issue of whether an advantag e within the meaning of Article I:1 is 
subject to conditions, and, on the other, whether an advantage, once it has been 
granted to the product of any country, is accorded 'unconditionally' to the like product 
of all other Members. An advantage can be granted subject to conditions without 
necessarily implying that it is not accorded 'unconditionally' to the like product of other Members. More specifically, the fact  that conditions attached to such an 
advantage are not related to the imported product itself does not necessarily imply 
that such conditions are discriminatory with respect to the origin of imported products. We therefore do not believe that, as argued by Japan, the word 'unconditionally' in Article I:1 must be interp reted to mean that making an advantage 
conditional on criteria not related to the imported product itself is per se  inconsistent 
with Article I:1, irrespective of whether and  how such criteria relate to the origin of 
the imported products ."
685 
7.437  The panel in Colombia – Ports of Entry followed the reasoning of the panel in Canada – 
Autos  and considered that it could assess whether an advantage was conferred "immediately and 
unconditionally" "based on whether an advantage gran ted to textiles, apparel, or footwear of any 
Member was not similarly accorded to those products originating in Panama for reasons related to its 
origin or the conduct of Panama."686  Colombia argued that it could condition its customs procedures 
on the need to control and verify imported mercha ndise from Panama and to avoid circumvention of 
such laws and regulation through under-invoicing, fraud and smuggling, without violating Article I:1 
of the GATT 1994.687 The panel reiterated the view expressed by the Canada – Autos panel that 
conditions attached to an advantage granted in connection with the importation of a product will 
violate Article I:1 of the GATT 1994  only when such conditions discriminated with respect to the 
origin of the products, and ruled that Article  I:1 of the GATT 1994 prohibited Members from 
addressing such concerns through the use of custom s rules that are applied on the basis of origin.688 
7.438  We recall that China argues that Section 727 is inconsistent with Article I:1 of the 
GATT 1994  as it applies a condition in a manner that discr iminates between like products of different 
origins, given that it applies solely to Chin ese poultry products, hence not being applied on MFN 
basis.689   
7.439  Section 727 prohibited FSIS from spending funds to establish or implement a rule allowing 
the importation of poultry products from China; it therefore applies solely to China. The Panel recalls 
that without the establishment or the implementa tion of a rule allowing the importation of poultry 
products – even if a country is determined by FSIS to provide equivalent food safety standards – it 
                                                      
685 Panel Report,  Canada – Autos , para. 10.24. 
686 Panel Report, Colombia – Ports of Entry, para. 7.362. 
687 Panel Report, Colombia – Ports of Entry, para. 7.366. 
688 Panel Report, Colombia – Ports of Entry, para. 7.366. 
689 China's first written submission, para. 92. WT/DS392/R 
Page 174  
 
 cannot export poultry products to the United States.
690  This means that even if Chinese poultry 
production system is found to provide equivalent  food safety standards as those applied in the 
United States691, it will not be able to export poultry pr oducts because of the funding prohibition. 
Further, the United States acknowle dges that the purpose and effect of Section 727 was to prevent 
Chinese poultry products from being imported into the United States.692   
7.440  No other country was subject to the funding prohibition that Section 727 imposed on China. 
This means that China is the only WTO Member that is denied the advantage that the Panel identified 
earlier – the opportunity to export poultry produc ts to the United States after the successful 
completion of the FSIS procedures. Therefore, Sect ion 727 discriminates against China with respect 
to other WTO Members by denying the above-m entioned advantage, and this discriminatory 
treatment means that the United States is not extending an advantage "immediately and 
unconditionally".693 
(f) Conclusion 
7.441  For the above reasons, the Panel concludes that the United States is not extending an 
advantage immediately or unconditionally to the like  products originating from China, advantage that 
it has extended to all other WTO Members. We theref ore find that Section 727 is inconsistent with 
Article I:1 of the GATT 1994. 
L. WHETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  XI:1  OF THE GATT 1994 
1. Arguments of the parties 
7.442  China argues that Section 727 is inconsistent  with Article XI:1 of the GATT 1994  because it 
imposes a restriction on importation which negatively impacts the competitive opportunities for 
poultry products from China. In China's view, the measure institutes a de facto  prohibition on the 
importation of poultry products from China. 694  Further, it contends that since China cannot 
participate in the FSIS approval procedures, the measure at issue effectively eliminates China's competitive opportunities in the United States mark et, thus constituting a restriction within the 
meaning of Article XI:1 of the GATT 1994.
695 
7.443  In the alternative, China argues th at to the extent that the practical impact of Section 727 is an 
import ban on Chinese poultry prod ucts, Section 727 institutes an import prohibition in the sense of 
Article XI:1 of the GATT 1994.696 
7.444  The United States  argues that China, as the complaining party, has the burden of establishing 
all of the elements of the alleged breach of Article XI:1 of the GATT 1994.697  The United States 
                                                      
690 See Section II.C. 
691 The Panel notes that the FSIS has determined that China is equivalent to the United States for 
processed poultry products and reached a preliminary determination that th e same was true for slaughtered 
poultry products. See Section II.D. 
692 United States' response to Panel question No. 110. 
693 Panel Report, Canada – Autos , para. 10.23. 
694 China's first written submission, para. 102. 
695 China's first written submission, para. 104, China' s opening oral statement at the first substantive 
meeting of the Panel, para. 83. 
696 China's first written submission, para. 106. 
697 United States' first written submission, para. 101; United States response to Panel question No. 31.  WT/DS392/R 
 Page 175 
 
 
 contends that Section 727 meets the requirement  of subparagraph (b) of Article XX of the 
GATT 1994.698 
2. Analysis by the Panel 
7.445  As indicated above, the United States has not contested China's claim under Article XI:1 of 
the GATT 1994. The absence of refutation of a claim ra ises the question of what the role of the Panel 
should be in such a case. We note that in US – Shrimp (Ecuador) and US – Shrimp (Thailand),  the 
panels found that although the respondent was not seek ing to refute the claims, in order to make an 
objective assessment of the matter before them they had to satisfy themselves whether the complainant had established a prima facie case of violation.
699 In particular, the panels considered 
whether the complainant had presented evidence a nd argument which "was sufficient to identify the 
challenged measure and its basic import, identi fy the relevant WTO provision and obligation 
contained therein, and explain the basis for the claimed inconsistency of the measure with that 
provision".700   
7.446  Although the United States has not presented argum ents seeking to refute China's claims, the 
Panel, in order to make an objective assessment of the matter as directed by Article 11 of the DSU, 
will still examine whether China has established a prima facie case of violation of Article XI:1 of the 
GATT 1994. 
(a) Article XI:1 of the GATT 1994  
7.447  Article XI:1 of the GATT 1994  contains one of the fundamental principles of the 
GATT/WTO legal system701, the general prohibition of quantitativ e restrictions. This provision reads 
as follows: 
"No prohibitions or restrictions other than duties, taxes or other charges, whether 
made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of 
the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party." 
7.448  Hence, Article XI:1 foresees the elimination of import and export restrictions or prohibitions 
other than duties, taxes or other charges. The Panel will proceed to examine whether Section 727 is a 
measure prohibiting or restricting the importation of p oultry products inconsistent  with Article XI:1 of 
the GATT 1994. 
(b) Section 727 as an "other measure" 
7.449  Article XI:1 of the GATT 1994  covers prohibitions and restric tions "made effective through 
quotas, import or export licenses or other measures". China argues that Section 727 institutes a 
restriction on the importation of poultry products from China, made effective through "other 
measures", because the restriction does not constitute a duty, tax or other charge within the meaning 
of Article XI:1 of the GATT 1994.
702  We agree with China that Section 727 is not a duty, tax or other 
charge, nor a quota or import/export license. 
                                                      
698 United States' first written submission, para. 102. 
699 Panel Report, US – Shrimp (Ecuador) , paras. 7.7-7.11; and Panel Report , US – Shrimp (Thailand) , 
para. 7.20. 
700 Panel Report, US – Shrimp (Ecuador) , para. 7.11. 
701 Panel Report, Turkey – Textiles , para. 9.63. 
702 China's first written submission, para. 103. WT/DS392/R 
Page 176  
 
 7.450  In India – Quantitative Restrictions , the panel found that the text of Article XI:1 of the 
GATT 1994  is "broad" in scope, providing for a general ban on import or export restrictions or 
prohibitions "other than duties, taxes or other charges".
703  In this sense, the term "other measures" is 
meant to encompass a "broad residual category".704 The GATT panel in Japan – Semi-Conductors  
found that "Article XI:1, unlike other provisions of the General Agreement, did not refer to laws or 
regulations but more broadly to measures. This wo rding indicated clearly that any measure instituted 
or maintained by a contracting party which restri cted the exportation or sale for export of products 
was covered by this provision, irrespectiv e of the legal status of the measure."705 
7.451  As stated by the GATT panel in Japan – Semi-Conductors  quoted above, laws and regulations 
fall within the concept of "other measures". Gi ven that Section 727 is a law enacted by the 
US Congress, the Panel considers that it falls within  the residual category of "other measure" that may 
be challenged under Article XI:1. Th e Panel will thus proceed to consider whether Section 727 is a 
prohibition or restriction on importation within the meaning of Article XI:1. 
(c) Whether Section 727 is a "prohibition or restricti on" within the meaning of Article XI:1 of the 
GATT 1994 
7.452  In order to determine whether Section 727 viol ates Article XI:1 of the GATT 1994, the Panel 
must establish whether the measure imposes a "prohib ition" or a "restriction" within the meaning of 
Article XI:1. 
7.453  China argues that the measure constitutes a rest riction on importation, and in the alternative 
argues that, to the extent that the practical impa ct of the measure is an import ban on Chinese poultry 
products, the measure institutes an import prohibition in the sense of Article XI:1.706 
7.454  The panel in Brazil – Retreaded Tyres stated that the term "prohibition" in Article XI:1 meant 
that "Members shall not forbid the importation of any products of any other Member into their markets."
707  As for the term "restriction", the panel in the Colombia – Ports of Entry  case, after 
reviewing several GATT and WTO cases, concluded that  "restrictions" in the sense of Article XI:1 
contemplate measures that create uncertainties and aff ect investment plans, restrict market access for 
imports or make importation prohibitively costly, and that the importance in an Article XI:1 analysis 
is to look at the design of the measure and its potential to adversely affect importation.708  On the basis 
of these considerations, the Panel will now proceed  to examine Section 727 to determine whether it 
constitutes a "restriction" or a "prohibiti on within the meaning of Article XI:1. 
7.455  The establishment and implementation of a rule by  FSIS in the Federal Register allowing the 
importation of poultry products from a given country is a prerequisite for the importation of such 
                                                      
703 The panel in  India – Quantitative Restrictions  found:  
"[T]he text of Article XI:1 is very broad in scope, providing for a general ban on import or export 
restrictions or prohibitions 'other than duties, ta xes or other charges'. As was noted by the panel in Japan – 
Trade in Semi-conductors , the wording of Article XI:1 is comprehensiv e: it applies 'to all measures instituted or 
maintained by a [Member] prohibiting or restricting the importation, exportation, or sale for export of products 
other than measures that take the form of duties, taxes or other charges.' The scope of the term 'restriction' is 
also broad, as seen in its ordinary meaning, which is 'a limitation on action, a limiting condition or regulation'." 
(original footnotes omitted).  
Panel Report, India – Quantitative Restrictions , para. 5.128. See also Panel Report, Colombia – Ports 
of Entry , para. 7.226. 
704 Panel Report, Argentina – Hides and Leather , para. 11.17. 
705 GATT Panel Report, Japan – Semi-Conductors , para. 106. 
706 China's first written submission, paras. 103-106. 
707 Panel Report, Brazil – Retreaded Tyres , para. 7.11. 
708 Panel Report, Colombia – Ports of Entry , para. 7.240.  WT/DS392/R 
 Page 177 
 
 
 products.709  Without the establishment or implementati on of this rule, countries are prohibited from 
importing poultry products into the United States.  
7.456  Section 727 prohibited the FSIS to use appropriated funds to "establish" or "implement" a rule 
allowing the importation of poultry products from Chin a. This restriction on the use of funds, had the 
effect of prohibiting the importation of poultry pr oducts from China, because without a rule being 
established / implemented, Chinese poultry products are banned from entering the US market. Hence, 
Section 727 operated as a prohibition on the importati on of poultry products from China into the 
United States.  
(d) Conclusion 
7.457  The Panel therefore finds that during the time Section 727 was in operation, it imposed a 
prohibition on the importation of poultry products  from China and thus is inconsistent with 
Article XI:1 of the GATT 1994. 
M. WHETHER SECTION 727 IS JUSTIFIED UNDER ARTICLE  XX(B)  OF THE GATT 1994 
1. Background 
7.458  The United States has put forward an affirmative defence under Article XX(b) of the 
GATT 1994. For the United States, Section 727 was en acted in order to "protect human and animal 
life and health from the risk posed by the importation of poultry products from China".710  T h e  
United States invokes this provision as a defence in case the Panel finds a violation of Article I:1 
and XI of the GATT 1994 by Section 727.  
7.459  Article XX(b) of the GATT 1994 provides for a ju stification to otherwise WTO-inconsistent 
measures when they are "necessary to protect human, animal or plant life or  health". Having found 
that Section 727 is inconsistent with Articles I: 1 and XI:1 of the GATT 1994, the Panel will proceed 
to examine the United States' defence under Article XX(b) of the GATT 1994.  
7.460  We note that we have found that Section 727 is  an SPS measure which is inconsistent with 
Articles 2.2, 2.3, 5.1, 5.2 and 5.5 of the SPS Agreement .   We also note that the preamble and other 
provisions of the SPS Agreement  specifically relate the SPS Agreement to Article XX(b) of the 
GATT 1994.  In this respect, the parties711 have argued around the issue of the interpretation of 
Article XX(b) of the GATT 1994 and how the SPS Agreement provides context.  In our view, the crux 
of the matter is whether it is possible to justif y Section 727 under Article XX(b) of the GATT 1994 as 
necessary to "protect human and animal life and h ealth from the risk posed by the importation of 
poultry products from China"712 if that measure is inconsistent  with various provisions of the 
SPS Agreement .  
                                                      
709 USDA/FSIS, Process for Evaluating the Equivalence of Foreign Meat and Poultry Food Regulatory 
Systems , p. 12 (Exhibit CN-7), 9 CFR § 381.196(a)(1) and § 381.196 (b) (Exhibit CN-6). 
710 United States' first written submission, paras. 111 and 119. 
711 Third parties have also commented on this. For exam ple, the European Union suggests that the close 
relationship between Article XX(b) of the GATT 1994 and the SPS Agreement  means that the provisions of the 
SPS Agreement  provide immediate context for the interpretation of the provisions of Article XX(b) of the 
GATT 1994. The European Union draws support for this vi ew from the fact that, as  clearly stated in its 
Preamble, the SPS Agreement  "elaborates rules for the application" of "in particular" Article XX(b) and the 
chapeau of Article XX of the GATT 1994, as well as from the fact that measures which satisfy the provisions of 
the SPS Agreement  are expressly stated to satisfy also the pr ovisions of Article XX(b) of the GATT 1994. 
European Union's third-party submission, para. 38. 
712 United States' first written submission, paras. 111 and 119. WT/DS392/R 
Page 178  
 
 7.461  Accordingly, we will commence our analysis of the United States' defence under 
Article XX(b) by looking into the relationship between Article XX(b) of the GATT 1994 and the 
SPS Agreement . 
2. Relationship between Article XX(b) of the GATT 1994  and the SPS Agreement  
(a) Arguments of the parties 
7.462  When asked about the relationship between the SPS Agreement  and Article XX(b) of the 
GATT 1994, the United States  agrees that the SPS Agreement , as one of the covered agreements, is 
context for Article XX(b), just as other parts of the WTO Agreement are context. The United States 
cautions, however, by stating that a consideration of  "context" under the VCLT occurs when there is a 
specific question of treaty interpretati on. In its view, the fact that the SPS Agreement  is context for 
Article XX(b) does not mean that any particular element of the SPS Agreement  becomes a part of the 
legal text for the consideration of a justification under Article XX(b). In the United States' view, it 
would be incorrect to consider that Article XX(b) is to be interpreted as somehow incorporating all 
the obligations of the SPS Agreement .
713 In the United States' view, th ere is nothing that makes the 
SPS Agreement  more relevant than, for example, Article XIV of the GATS.714 
7.463  When asked about which provisions of the SPS Agreement  the Panel should examine as 
context for Article XX(b), the United States argu ed that it would be incorrect to view the 
SPS Agreement  as altering the scope or adding to the scope of Article XX(b), or as necessarily being 
more "immediate" context than other pr ovisions of the covered agreements.715 
7.464  China  argues that the provisions of the SPS Agreement  provide relevant and immediate 
context for interpreting Article XX(b). In China's view, the close relationship between Article XX(b) 
and the SPS Agreement  is reflected in the preamble and the presumption of consistency set forth in 
Article 2.4 of the SPS Agreement .716  When asked about which provisions of the SPS Agreement  
should the Panel examine as context for Article XX( b), China responded that the Panel should take 
Articles 2, 3, 5, 6 and 8 of the SPS Agreement  under consideration. China argued that these provisions 
relate to the justification for a given measure , along with disciplines on non-discrimination in the 
application of such measure.717   
(b) Analysis by the Panel 
7.465  The Panel is thus confronted with the issue of  the relationship between Article XX(b) of the 
GATT 1994 and the SPS Agreement . As explained above, it is an important issue because, given our 
findings in Sections VII.F, VII.G and VII.H, th e question is whether it is possible to justify 
Section 727 under Article XX(b) of the GATT 1994 as necessary to "protect human and animal life 
and health from the risk posed by the importation of poultry products from China"718 when we have 
found that it is an SPS measure which is inconsistent with Articles 2.2, 2.3, 5.1, 5.2 and 5.5 of the 
SPS Agreement .  
7.466  In examining the relationship between Article XX(b) and the SPS Agreement , we recall the 
customary rules of interpretation set out in the VC LT. The Panel also recalls that in accordance with 
Article II:2 of the WTO Agreement , the multilateral trade agreements included in its Annexes 1, 2 and 
                                                      
713 United States' response to Panel question No. 54. 
714 United States' response to Panel question No. 54. 
715 United States' response to Panel question No. 56. 
716 China's response to Panel question No. 54. China' s opening oral statement at the first substantive 
meeting of the Panel, paras. 35-36. 
717 China's response to Panel question No. 56. 
718 United States' first written submission, paras. 111 and 119.  WT/DS392/R 
 Page 179 
 
 
 3 must be interpreted as a whole719, and in a manner that gives meaning to all of them 
harmoniously.720   
7.467  We shall start by looking at the text of the chapeau of Article XX of the GATT 1994 and, in 
particular, its paragraph (b),  which read as follows: 
"Subject to the requirement that such me asures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between 
countries where the same conditions prev ail, or a disguised restriction on 
international trade, nothing in this Agre ement shall be construed to prevent the 
adoption or enforcement by any contracting party of measures: 
... 
(b) necessary to protect human, animal or plant life or health ..."   
7.468  There is obviously no explicit reference to the SPS Agreement  in the text of Article XX(b) of 
the GATT 1994 because the text of this provision is  a restatement of the GATT 1947 which pre-dates 
the SPS Agreement . It does however refer to measures "necessar y to protect human, animal or plant 
life or health".  
7.469  We now turn to the SPS Agreement . Starting with the preamble of the SPS Agreement , we see 
that it does either explicitly refer to Article XX(b)  of the GATT 1994 or to its wording, on several and 
meaningful occasions. The preamble read s as follows in the relevant portions: 
"Reaffirming  that no Member should be prevented from adopting or enforcing 
measures necessary to protect human, animal or plant life or health, subject to the requirement that these measures are not a pplied in a manner which would constitute a 
means of arbitrary or unjustifiable discrimination between Members where the same 
conditions prevail or a disguised r estriction on international trade; 
... Desiring  therefore to elaborate rules for the application of the provisions of 
GATT 1994 which relate to the use of san itary or phytosanitary measures, in 
particular the provisions of Article XX(b);* 
*Footnote 1: In this Agreement, reference to Article XX(b) includes also the chapeau 
of that Article." 
7.470  Hence, the preamble explicitly states that the purpose of the SPS Agreement is to "elaborate 
rules for the application of…, in particular, Article XX(b)", including a clarification in footnote 1 that such a reference to Article XX(b) also includes the chapeau of that Article. We note that the preamble 
actually commences by paraphrasing the wording of Article XX(b) and that of the chapeau of 
Article XX of the GATT 1994.  
7.471  We also note that the preamble uses the word  "elaborate" to qualify the relationship of the 
SPS Agreement  with Article XX(b). The ordinary meaning of the word "elaborate" is to "explain 
something in detail".
721 Accordingly, when the preamble states that the SPS Agreement elaborates the 
                                                      
719 Appellate Body Report, Korea – Dairy , para. 81. 
720 Appellate Body Report, Argentina – Footwear (EC) , para. 81. 
721 The new Shorter Oxford English Dictionary, L. Brown (ed.) (Clarendon press, 1993), Vol. II, 
p. 799. WT/DS392/R 
Page 180  
 
 rules for the application of Article XX(b), it is thus saying that the SPS Agreement  "explains in detail" 
how to apply Article XX(b). Because the SPS Agreement  only applies to SPS measures
722, this 
conclusion would apply in respect of measures found to be SPS measures, such as Section 727. 
7.472  This is further confirmed by the wordin g of a number of provisions throughout the 
SPS Agreement  which either explicitly refer to Article XX(b) or mirror relevant language in that 
provision.  
7.473  As pointed out by the panel in EC – Hormones , Article 2 of the SPS Agreement is an example 
of rules that elaborate Article XX(b).723 In particular, Article 2.4 of the SPS Agreement includes a 
presumption whereby SPS measures conforming to the SPS Agreement  are presumed to be consistent 
with Article XX(b) of the GATT 1994. Article 2.4 of the SPS Agreement  reads: 
"Sanitary or phytosanitary measures which c onform to the relevant provisions of this 
Agreement shall be presumed to be in  accordance with the obligations of the 
Members under the provisions of GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular  the provisions of Article XX(b)." 
7.474  Similarly, Article 3.2 of the SPS Agreement includes a presumption to the effect that 
SPS measures that conform to international standa rds are deemed necessary and presumed consistent 
with the relevant provisions of the SPS Agreement  and the GATT 1994.  
7.475  We also note that the definition of SPS measures in Annex A(1) of the SPS Agreement , 
although not referring directly to Article XX(b) of the GATT 1994, does encompass measures applied 
to protect animal or plant life or health as well as human life or health. We recall that Article XX(b) of 
the GATT 1994 refers to measures "necessary to prot ect human, animal or plant life or health". 
Hence, the same type of measures. Although Article XX(b) of the GATT 1994 could be seen as 
encompassing more measures than those defined in Annex A(1) of the SPS Agreement ; measures of 
the type defined in Annex A(1) are included w ithin the type of measures contemplated in 
Article XX(b) of the GATT 1994. 
7.476  We also note that Articles 2.3 and 5.5 of the SPS Agreement  refer to "arbitrary or 
unjustifiable" discrimination and distinctions. Those same provisions also refer to "disguised 
restrictions on international trade". Both of  these phrases echo the language of the chapeau of 
Article XX. 
7.477  It is not uncommon for the specific agreements on trade in goods to be elaborations on 
provisions of the GATT 1994.
724  Indeed, we find support for our un derstanding of such a relationship 
in the way WTO Members have elaborated ot her provisions of the GATT 1994 through specific 
covered agreements. The Customs Valuation Agreement , for example, elaborates the provisions of 
Article VII of the GATT 1994725, the Anti-Dumping Agreement and the Agreement on Subsidies and 
                                                      
722 For example measures that fall within the definition in Annex A(1) and that directly or indirectly 
affect international trade. Article 1 of the SPS Agreement . 
723 Panel Report, EC – Hormones , paras. 8.38-8.40. 
724 We acknowledge the existence of a general interpretative note in Annex 1A of the WTO Agreement  
which, in the words of the Appellate Body in Brazil – Desiccated Coconut , was included "in order to clarify the 
legal relationship of the GATT 1994 with the other agreements in Annex 1A (Appellate Body Report, Brazil – 
Desiccated Coconut , p. 12). It provides that in the event of a conflict between a provision of the GATT 1994 
and a provision of another agreement in Annex 1A, the latte r shall prevail to the extent of the conflict. We are 
not referring to this note since we do not understand this situation as a conflict. 
725 The relevant part of the preamble of the Customs Valuation Agreement  provides: " Recognizing  the 
importance of the provisions of Article VII of GATT 1994 and desiring to elaborate rules for their application in 
order to provide greater uniformity a nd certainty in their implementation".  WT/DS392/R 
 Page 181 
 
 
 Countervailing Measures provide that they explain the implemen tation and application of Article VI 
of the GATT 1994726, and the Agreement on Safeguards  provides that it clarifies and reinforces the 
disciplines of GATT 1994, specifically those of Article XIX.727   
7.478  The negotiating history728 of the SPS Agreement  also appears to confirm our interpretation.  
The Negotiating Group on Agriculture established by  the Group of Negotiations on Goods, sought to 
strengthen the GATT rules and disciplines, in particul ar Article XX(b) recognizing the need to rely on 
scientific evidence for SPS measures.729  This strengthening of GATT rules and disciplines was to be 
done by developing a set of principles that woul d govern the use of SPS regulations and barriers.730  
In this sense, one of the purposes of SPS Agreement  was to complement Article XX(b) by providing 
specific provisions that SPS measures must comply with  in order to be consiste nt with Article XX(b).  
7.479  We therefore conclude that the SPS Agreement  elaborates and thus explains the provisions of 
Article XX(b) in further detail when dealing with SPS measures. In the Panel's view, this 
interpretation gives meaning to both Ar ticle XX(b) of the GATT 1994 and the SPS Agreement in a 
harmonious manner. 
7.480  Our next step would be to consider the implic ation of such a conclusion on our question; i.e. 
whether it is possible to justify Section 727 un der Article XX(b) of the GATT 1994 as necessary to 
"protect human and animal life and health from the risk posed by the importation of poultry products 
from China"731 when we have found that it is an SPS measure which violates, inter alia , Articles 2.3, 
5.1, 5.2 and 5.5 of the SPS Agreement . 
7.481  We note that the United States has argued that merely because the SPS Agreement is context 
for Article XX(b) does not mean that Article XX(b) is to be interpreted as somehow incorporating all 
the obligations of the SPS Agreement .732 We disagree to a certain extent. Given our conclusion that 
the SPS Agreement  explains the provisions of Article XX(b) in further detail and because the 
SPS Agreement only applies to SPS measures733, the SPS Agreement thus explains in detail the 
provisions of Article XX(b) in respect of SPS measures.  Since that is the case, we have difficulty in 
accepting that an SPS measure which is found inconsistent with provisions of the SPS Agreement such 
as Articles 2 and 5, which are explanations of the disciplines of Article XX(b), could be justified 
under that same provision of the GATT 1994. Additionally, we recall that Article 2.1 of the SPS Agreement provides that Members have a right to ta ke SPS measures necessary for the protection 
of human, animal, or plant life or health, provided that such measures are not inconsistent with the 
provisions of the SPS Agreement .
734  Therefore, the Panel is of the view that an SPS measure which 
                                                      
726 Article 1 of the Anti-Dumping Agreement  reads: "An anti-dumping measure shall be applied only 
under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and 
conducted in accordance with the provisions of this Agreement. The following provisions govern the application 
of Article VI of GATT 1994 in so far as actions taken under anti-dumping legislation or regulations."  See also 
Article 10 of the SCM Agreement . 
727 The relevant part of the preamble of the Agreement on Safeguards provides: " Recognizing the need 
to clarify and reinforce the disciplines of GATT 1994, and specifically those of its Article XIX (Emergency 
Action on Imports of Particular products), to re-estab lish multilateral control over safeguards and eliminate 
measures that escape such control". 
728 Supplementary means of interpreta tion under Article 32 of the VCLT. 
729 MTN.GNG/NG5/10, para. 3. 
730 MTN.GNG/NG5/WGSP/1. 
731 United States' first written submission, paras. 111 and 119. 
732 United States' response to Panel question No. 54. 
733 For example measures that fall within the definition in Annex A(1) and that directly or indirectly 
affect international trade. Article 1 of the SPS Agreement . 
734 We note that other agreements on trade in g oods contain similar formulations.  For example, 
Article 10 of the SCM Agreement , which is entitled Application of Article VI of the GATT 1994, states that WT/DS392/R 
Page 182  
 
 has been found inconsistent with Articles 2 and 5 of the SPS Agreement , cannot be justified under 
Article XX(b) of the GATT 1994.  
7.482  We are not deciding that any analysis of Artic le XX(b) must be done with reference to the 
SPS Agreement . We are only saying that, where an SPS measu re is concerned, the provisions of the 
SPS Agreement  become relevant for an analysis of Artic le XX(b) and, furthermore, where such an 
SPS measure has been found inconsistent with provisions of the SPS Agreement such as Articles 2 
and 5, the disciplines of Article XX(b) cannot be applied so as to justify such a measure. 
(c) Conclusion 
7.483  We therefore find that, because we have found that  it is inconsistent with Articles 2.2, 2.3, 
5.1, 5.2 and 5.5 of the SPS Agreement , the United States has not demonstrated that Section 727 is 
justified under Article XX(b) of the GATT 1994 . 
N. W
HETHER SECTION  727  IS INCONSISTENT WITH ARTICLE  4.2 OF THE AGREEMENT ON 
AGRICULTURE  
7.484  The Panel observes that China claims that Section 727 violates Article 4.2 of the Agreement 
on Agriculture . In particular, China requests the Panel to find that Section 727 restricts the volume of 
Chinese poultry products that may enter the United St ates at zero, resulting in the maintenance of a 
"quantitative import restriction" inc onsistent to Article 4.2 of the Agreement on Agriculture.735  
7.485  We recall that we have found that Section 727 is inconsistent with Article XI:1 of the 
GATT 1994 , entitled "General elimination of quantitativ e restrictions", because Section 727 operates 
as a prohibition on the importation of poultry products from China into the United States. 
7.486  The Panel, after careful consideration, on th e basis of judicial economy, refrains from ruling 
on China's claim under Article 4.2 of the Agreement on Agriculture . As explained in 
Section VII.G.2(c) above, the principle of judicial  economy is recognized in WTO law. The Appellate 
Body has consistently ruled that panels are not required to address all the claims made by a complaining party provided they do not exercise judicial economy where only a partial resolution of a dispute would result. The Panel believes that this  is not the case. Indeed, in making findings under 
Article XI:1 of the GATT 1994, the Panel considers th at it has effectively reso lved the aspects in this 
dispute related to the "restrictions" on Chinese poultr y and poultry products into the United States. 
The Panel finds support for its exercise of judicial economy in the practice of panels and the Appellate 
Body in previous dispute settlement proceedings. For example, the Panel in US – 1916 Act (Japan) , 
after finding a violation of Article VI, held that in  the case before it, Article VI addressed the "basic 
feature" of the measure at issue more directly than Article XI although this did not mean that 
Article VI applied to the exclusion of Article XI:1. On that occasion, the Panel found that it was 
entitled to exercise judicial economy and decided not to review the claims of Japan under 
Article XI.
736 
7.487  For the above reasons, the Panel concludes that  it would not be appropriate to proceed and 
rule on China's claim under Article 4.2 of the Agreement on Agriculture , and, thus, declines to do so.  
                                                                                                                                                                     
"[c]ountervailing duites may only be imposed pursuant to investigations initiated and conducted in accordance 
with the provisions of this Agreement and the Agreement on Agriculture ."  See also, Article 1 of the Anti-
Dumping Agreement  and Article 2.1 of the Safeguards Agreement . 
735 China's first written submission, paras. 113-114. 
736 Panel Report, US – 1916 Act (Japan) , para. 6.281.  WT/DS392/R 
 Page 183 
 
 
 VIII.  CONCLUSIONS AND RECOMMENDATIONS 
8.1 In light of the above findings, the Panel finds that Section 727 is inconsistent with :  
(a) Articles 5.1 and 5.2 of the SPS Agreement  because it is not based on a risk assessment 
which took into account the factors set forth in Article 5.2;   
(b) Article 2.2 of the SPS Agreement  because it was maintained without sufficient 
scientific evidence; 
(c) Article 5.5 of the SPS Agreement  because the distinction in ALOPs for poultry 
products from China and for poultry products from other WTO Members is arbitrary or unjustifiable and that this arbitrary or unjustifiable distinction in ALOPs results in 
discrimination against China;   
(d) Article 2.3 of the SPS Agreement , first sentence, because the inconsistency of 
Section 727 with Article 5.5 of the SPS Agreement necessarily implies that 
Section 727 is also inconsiste nt with Article 2.3 of the SPS Agreement;  
(e) Article 8 of the SPS Agreement  because Section 727 has caused an undue delay in the 
FSIS approval procedures and thus the United States failed to observe the provisions 
of Annex C(1)(a) of the SPS Agreement.  
8.2 The Panel declines to rule  on China's claim that Section 727 is inconsistent with Article 5.6 of 
the SPS Agreement . 
8.3 The Panel further finds that Section 727 is inconsistent with: 
(a) Article I:1 of the GATT 1994 because th e United States is not extending an 
advantage immediately or unconditionally to the like products originating from 
China, advantage that it has extended to all other WTO Members; 
(b) Article XI:1 of the GATT 1994, because during the time it was in operation, 
Section 727 imposed a prohibition on the impor tation of poultry products from China.  
8.4 The Panel finds Section 727 is not justified under Ar ticle XX(b) of the GATT 1994 because 
we have found that it is inconsistent with Articles 2.2, 2.3, 5.1, 5.2 and 5.5 of the SPS Agreement . 
8.5 Finally, the Panel declines to rule  on China's claim that Section 727 is inconsistent with 
Article 4.2 of the Agreement on Agriculture.
 
8.6 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie to cons titute a case of nullification or 
impairment of benefits under that agreement. Accordingly, we concl ude that to the extent that the 
United States has acted inconsistently with the specified provisions of the SPS Agreement and the 
GATT 1994, it has nullified or impaired benefits  accruing to China under those agreements.  
8.7 Article 19.1 of the DSU  is explicit concerning the recommenda tion a panel is to make in the 
event it determines that a measure is inconsistent with a covered agreement: "it shall recommend that 
the Member concerned bring the measure into conf ormity with that agreement." (footnotes omitted). 
However, given that the measure at issue, Sec tion 727 has expired, we do not recommend that the 
DSB request the United States to bring the relevant measure into conformity with its obligations under 
the SPS Agreement  and the GATT 1994. WT/DS392/R 
Page 184  
 
 8.8 In this respect, the Panel notes that China has requested the Pane l to make use of its discretion 
under the second sentence of Article 19.1 of the DSU by suggesting ways in which the United States 
could implement the recommendations and rulings of the DSB.
737 In particular, China has requested 
the Panel to issue a recommendation that the United St ates does not revert to language similar to that 
in Section 727 in its future legislation.738   
8.9 The Panel is of the view that we are not to make recommendations on measures other than 
Section 727 itself because these other measures, including future measures, are outside our terms of reference. We do note that any findings of the Panel on the consistency of  Section 727 with the 
relevant provisions of the covered agreements should clarify the obligations raised and provide some 
predictability for future cases dealing with the same or similar matters.
739 The Panel also notes that 
Section 743, the most recent appropriations measure , already includes language different from that of 
Section 727.  
8.10 The Panel therefore decides that, in the present circumstances, although it makes rulings on 
the consistency of Section 727 with the SPS Agreement  and the GATT 1994, it will refrain from 
making recommendations under Article 19 of the DSU in the terms requested by China.  
 
__________  
                                                      
737 China's first written submission, para. 194. 
738 China's closing oral statement at the second su bstantive meeting, para. 7. In its first written 
submission, when Section 727 was still in force, China had requested that the Panel make a suggestion to the 
United States to implement the recommendations and rulings of the DSB (i) by withdrawing the measure and 
(ii) by committing to exclude language identical (or substantially similar) to that used in Section 727 from any future measure. China's first written submission, para. 194. 
739 Appellate Body Report, US – Stainless Steel (Mexico) , para. 161.