CANADA – CONTINUED SUSPENSION OF OBLIGATIONS IN THE EC – HORMONES DISPUTE
Document: AB-2008-6 Report of the Appellate Body
Date: 16 October 2008
Document codes: WT/DS321/AB/R
Complainant: EU
Respondent: Canada
Third parties: Australia, Brazil, China, Taiwan, India, Mexico, New Zealand, Norway, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. I, II  GATT 1994Art. 3.7, 22, 23.1, 23.2, 21.5  Dispute Settlement Understanding (DSU)

CANADA – CONTINUED SUSPENSION OF OBLIGATIONS IN THE
EC – HORMONES DISPUTE

AB-2008-6

Report of the Appellate Body

APPELLATE BODY

European Communities, Appellant/Appellee
United States, Other Appellant/Appellee
Canada, Other Appellant/Appellee

Australia, Third Participant
Brazil, Third Participant
China, Third Participant
India, Third Participant
Mexico, Third Participant
New Zealand, Third Participant
Norway, Third Participant
Separate Customs Territory of Taiwan, Penghu,
 Kinmen and Matsu, Third Participant

 AB-2008-6

 Present:

 Unterhalter, Presiding Member
 Abi-Saab, Member
 Bautista, Member

I. Introduction
1. The European Communities, the United States, and Canada each appeals certain issues of law
and legal interpretations deve loped in the Panel Report, United States – Continued Suspension of
Obligations in the EC – Hormones Dispute
 1 (the "Panel Report, US – Continued Suspension "), and
the Panel Report, 2
(the "Panel Report, Canada – Continued Suspension ").3 The Panels were established to consider
complaints by the European Communities concer ning the suspension of concessions or other
obligations by the United States and by Canada against the European Co mmunities because of the
latter's alleged failure to comply with the reco mmendations and rulings of the Dispute Settlement
Body (the "DSB") stemming from the EC – Hormones dispute.4 The European Communities asserts
that the United States and Canada must cease th e suspension of concessions because the European

1, 21 March 2008.
2, 21 March 2008.
3In this Report, we refer to the United States first and then to Canada, in keeping with the chronology
of the WT/DS numbers assigned to these disputes.
4The recommendations and rulings of the DSB resulted from the adoption on 13 February 1998, by the
DSB, of the Appellate Body Report, WT/DS26/AB/R, WT/DS48/AB/R; the Panel Report, WT/DS26/R/USA;
and the Panel Report, WT/DS48/R/CAN.

Communities adopted Directive 2003/74/EC
5 and notified it to the DSB as a measure taken to comply
with the DSB's recommendations and rulings in EC – Hormones.6
2. Before the panels in EC – Hormones 7, the United States and Canada claimed that the ban
imposed by the European Communities on meat from cattle treated with six hormones—oestradiol-17 β,
progesterone, testosterone, trenbolone acetate, zeranol, and melengestrol acetate ("MGA")—was
inconsistent with the Agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS
Agreement"), in particular, Articles 2, 3, and 5 thereof, the Agreement on Technical Barriers to Trade
(the "TBT Agreement"), and the General Agreement on Tariffs and Trade 1994 (the "GATT 1994").
3. The panel in EC – Hormones held that:
− by maintaining sanitary measures that are not based on a risk assessment, the European
Communities had acted inconsistently with Article 5.1 of the SPS Agreement;
− by adopting arbitrary or unjustifiable distinc tions in the levels of sanitary protection it
considered appropriate in different situations which result in discrimination or a disguised
restriction on international trade, the Europ ean Communities had acted inconsistently with
Article 5.5 of the SPS Agreement; and
− by maintaining sanitary measures that are not based on existing international standards
without justification under Article 3.3 of the SPS Agreement, the European Communities had
acted inconsistently with Article 3.1 of that Agreement.8
4. The European Communities appealed the panel's findings under Articles 3.1, 3.3, 5.1, and 5.5
of the SPS Agreement. In addition, the European Communities claimed that the panels had erred in
the selection and use of scientific experts, in a llocating the burden of proof, and in applying the
standard of review. The United States and Canada ap pealed the panel's decision not to make findings
relating to Articles 2.2 and 5.6 of the SPS Agreement.

5Directive 2003/74/EC of the European Parliament and of the Council of 22 September 2003 amending
Council Directive 96/22/EC concerning the prohibition on the use in stockfarming of certain substances having
a hormonal or thyrostatic action and of beta-agonists, Official Journal of the European Union, L Series, No. 262
(14 October 2003) 17 (Exhibits EC-1 and US-3 submitted by the European Communities and the United States,
respectively, to the Panel).
6Panel Report, US – Continued Suspension, para. 1.1; Panel Report, Canada – Continued Suspension,
para. 1.1.
7As the same individuals served on both panels, in this Report we will henceforth refer to the panels in
the singular.
8Panel Report, EC – Hormones (US), para. 9.1; Panel Report, EC – Hormones (Canada), para. 9.1.

5. The Appellate Body upheld, albeit on the basis of modified reasoning, the panel's findings that
the European Communities' import ban on meat and meat products tr eated with the six hormones at
issue was inconsistent with Article 5.1 of the SPS Agreement , and, as a consequence, was also
inconsistent with Article 3.3 of that Agreement. The Appellate Body found that the scientific studies
submitted by the European Communities in that disput e were not "sufficiently specific to the case at
hand"
9, because they were "general studies which do ind eed show the existence of a general risk of
cancer; but they do not focus on and do not address the particular kind of risk here at stake". 10 For
this reason, the Appellate Body concluded that "no risk assessmen t that reasonably support[ed] or
warrant[ed] the import prohibition embodied in the [European Communities'] Directives was
furnished to the Panel"11, and accordingly found that the European Communities' import ban, imposed
under Directive 96/22/EC, was not "based on" a risk assessment within the meaning of Article 5.1.
Moreover, the Appellate Body disagreed with the panel's interpretation of the relationship between
Articles 3.1 and 3.3 of the SPS Agreement. The panel interpreted Article 3.3 to be an exception to the
"general obligation" of Article 3.1, and found that the European Communities had not acted
consistently with Article 3.1 and had not provided appropriate scientific justification for a higher level
of SPS protection under Article 3.3. The Appellate Body concluded, however, that the right of
Members to establish a higher level of sanitary pr otection under Article 3.3 is an autonomous right
and not an exception to a "general obligation" under Article 3.1. Accordingly, the Appellate Body
reversed the panel's conclusion that the import pr ohibition was inconsistent with Article 3.1.
Nevertheless, as the Appellate Body found that the European Communities' import prohibition was
inconsistent with Article 5.1, it also concluded that the import prohibition was inconsistent with
Article 3.3. The Appellate Body, however, modified the panel's interpretation of "risk assessment" by
holding that there was no requirement "to establish a minimum quantifiable magnitude of risk", and
that the factors "not susceptible of quantitative anal ysis by the empirical or experimental laboratory
methods commonly associated with the physical sciences" were not excluded from the scope of a risk
assessment.
12 The Appellate Body also reversed the pa nel's findings that the European Communities
had acted inconsistently with Article 5.5 of the SPS Agreement, which requires that a WTO Member
avoid arbitrary or unjustifiable di stinctions in the levels of sanitary protection that result in
discrimination or a disguised restriction on international trade. Furthermore, the Appellate Body agreed
with the panel that the precautionary principle woul d not override Articles 5.1 and 5.2 and that it had
been incorporated in, inter alia, Article 5.7 of the SPS Agreement. With regard to the selection and use
of experts by the panel, the Appella te Body concluded that the panel had acted consistently with the

10Ibid.
11Ibid., para. 208.
12Ibid., para. 253(j).

requirements of the Understanding on Rules and Procedures Governing the Settlement of Disputes
(the "DSU") and the SPS Agreement. The Appellate Body rejected the European Communities' claim
that the panel had erred in the standard applied to the review of the evidence and thus found that the
panel had complied with its oblig ation under Article 11 of the DSU. Finally, the Appellate Body
concluded that the panel's exercise of judici al economy was proper in not making findings under
Articles 2.2 and 5.6 of the SPS Agreement.
6. On 13 February 1998, the DSB adopted the panel and Appellate Body Reports in EC –
Hormones and recommended that the European Communities bring its measures into conformity with
the SPS Agreement. Following the adoption of the panel and Appellate Body reports by the DSB, the
European Communities requested that the reasonable period of time for implementation be
determined through arbitration in accordance with Article 21.3(c) of the DSU. The Arbitrator
determined a reasonable period of time of 15 months, expiring on 13 May 1999.
13
7. On 12 May 1999, the European Communities addr essed a communication to the Chairman of
the DSB, which stated:
[T]he Community has undertaken a complementary risk assessment
in light of the relevant clarifica tions on risk assessment provided by
the Appellate Body.
In light of such results of that risk assessment as are now available to
it, the Community is not in a position to lift its existing import ban
on 13 May.
The Community now intends to study in more depth these results in
order to evaluate on this basis and in the light of any new relevant
information what steps may be necessary in light of our WTO rights
and obligations.
14
8. As a result, the United States and Canada re quested the DSB to authorize suspension of
concessions and other obligations pursuant to Artic le 22.2 of the DSU. The European Communities
objected to the levels of suspension of concessi ons proposed by the United States and Canada, and
requested that such levels be de termined through arbitration pursuant to Article 22.6 of the DSU. 15
The Arbitrators concluded that the levels of nullifi cation and impairment in relation to United States
and Canadian meat exports were US$116. 8 million and Can$11.3 million, respectively. 16
On 26 July 1999, the United States and Canada obtained authorization from the DSB to suspend

13Award of the Arbitrator, EC – Hormones, para. 48.
14WT/DS26/18, WT/DS48/16.
15WT/DS26/20; WT/DS48/18.
16Decision by the Arbitrators, EC – Hormones (US) (Article 22.6 – EC) , para. 83; Decision by the
Arbitrators, EC – Hormones (Canada) (Article 22.6 – EC), para. 72.

concessions and other obligations in relation to the European Communities.
9. On 29 July 1999, the United States applied 100 per cent import duties on a range of imports
from certain member States of the European Communities. 17 On 1 August 1999, Canada applied
100 per cent ad valorem duties on a similar range of imports from the European Communities.18
10. After the adoption of the panel and Appellate Body Reports in the EC – Hormones dispute,
the European Commission initiated 17 scientific studies to assess any risks to human health posed by the
six hormones at issue.19 On 30 April 1999, the Scientific Committee on Veterinary Measures relating to
Public Health (the "SCVPH") of the European Communities issued the Assessment of Potential Risks
to Human Health from Hormone Residues in Bovine Meat and Meat Products
20 (the "1999 Opinion").
Subsequent to the adoption of the 1999 Opinion, additional scientific information was made available
to the European Commission in the form of scientific studies conducted by: (i) the United Kingdom's
Veterinary Products Committee sub-group on the 1999 Opinion (October 1999); (ii) the Committee
for Veterinary Medicinal Products ("CVMP") of the European Union (a subcommittee of the
European Medicines Agency (EMEA)) (December 1999); and (iii) the Joint FAO/WHO Expert
Committee on Food Additives ("JECFA") (February 2 000). At the request of the European
Commission, the SCVPH examined this scientific information and, on 3 May 2000, issued a review of
its 1999 Opinion in which it declined to alter the conclusions contained therein
21 (the "2000 Opinion").
On 10 April 2002, a second review of the 1999 Opinion was issued by the SCVPH 22 (the "2002
Opinion") on the basis of more recent scientific data collected since the previous review. The

17Office of the United States Trade Representa tive, Implementation of WTO Recommendations
Concerning EC – Measures Concerning Meat and Meat Products (Hormones) , United States Federal Register ,
Vol. 64, No. 143 (27 July 1999) 40638.
18European Union Surtax Order, Canada Gazette Part II, Vol. 133, No. 17 (18 August 1999).
19These scientific studies are contained in Exhibits EC-7 (US) through EC-42 (US) and Exhibits
EC-4 (CDA) through EC-39 (CDA) submitted by the European Communities to the Panel.
20"Opinion of the SCVPH – Assessment of Potential Risks to Human Health from Hormone Residues
in Bovine Meat and Meat Products" (30 April 1999) (Exhibits US-4 and CDA-2 submitted by the United States
and Canada, respectively, to the Panel). The main conclusions of the 1999 Opinion are set out in Panel Report,
US – Continued Suspension, para. 7.391, and Panel Report, Canada – Continued Suspension, para. 7.388.
21"Review of Specific Documents relating to the SCVPH Opinion of 30 April 99 on the Potential Risks
to Human Health from Hormone Residues in Bovine Meat and Meat Products" (adopted on 3 May 2000)
(Exhibits US-17 and CDA-4 submitted by the United States and Canada, respectively, to the Panel). The main
conclusions of the 2000 Opinion are set out in Panel Report, US – Continued Suspension, para. 7.392, and Panel
22"Opinion of the SCVPH on Review of Previous SCVPH Opinions of 30 April 1999 and 3 May 2000
on the Potential Risks to Human Health from Hormone Residues in Bovine Meat and Meat Products" (adopted
on 10 April 2002) (Exhibits US-1 and CDA-17 submitted by the United States and Canada, respectively, to the
Panel). The 2002 Opinion confirmed the validity of the 1999 and 2000 Opinions and concluded that no
amendments to those Opinions were justified. The main conclusions of the 2002 Opinion are set out in Panel
Report, US – Continued Suspension , para. 7.393, and Panel Report, Canada – Continued Suspension ,
para. 7.390.

scientific data reviewed by the SCVPH included the final results of all 17 studies that had been
commissioned by the European Commission.
11. In the light of the conclusions of the 1999, 2000, and 2002 Opinions, the European
Communities adopted Directive 2003/74/EC on 22 September 2003
23, which amends
Directive 96/22/EC in relation to the prohibitio n of the use of hormones in stockfarming.
Directive 2003/74/EC maintains the permanent prohib ition of the placing on the market of meat and
meat products from animals treated with oestradiol-17 β for growth-promotion purposes originally
contained in Directive 96/22/EC.24 In relation to the five other hormones—testosterone, progesterone,
trenbolone acetate, zeranol, and MGA—Directive 2003/74/EC continues to apply the prohibition
contained in Directive 96/22/EC, but on a provisional basis. 25 Directive 2003/74/EC specifies that,
even though the scientific information available show ed the existence of risk s associated with these
substances, "the current state of knowledge does not make it possible to give a quantitative estimate of
the risk to consumers".26 Accordingly, the prohibition of these five hormones should apply "while the
Community seeks more complete scientific informat ion from any source, which could shed light and
clarify the gaps in the present state of knowledge of these substances".27
12. On 27 October 2003, the European Communities notified the DSB of the adoption,
publication, and entry into force of Directive 2003/74/EC, as well as the 1999, 2000, and 2002
Opinions, which it considered to be risk assessmen ts that sufficiently justified the permanent and
provisional import prohibitions under the SPS Agreement.
28 The European Communities therefore
claimed that it had fully implemented the DSB's recommendations and rulings in the original EC –
Hormones disputes, and consequently considered that the suspensions of concessions by the United
States and Canada were no longer justified. The United States and Canada refused to lift the
measures taken pursuant to the DSB's authorization to suspend concessions or other obligations. The
European Communities requested consultatio ns with the United States and Canada

23Supra, footnote 5.
24Directive 2003/74/EC, supra, footnote 5, Recital 10 and Article 1 (amending Articles 2 and 3 of
Directive 96/22/EC).
25Ibid.
26Directive 2003/74/EC, supra, footnote 5, Recital 7.
27Ibid., Recital 10.
28WT/DS26/22, WT/DS48/20.

on 8 November 2004.29 The Panel was established, at the request of the European Communities,
on 17 February 2005.30
13. Before the Panel, the European Communities put forward two "series of main claims", and a
conditional "alternative" claim. In its first "series of main claims", the European Communities argued
that, by maintaining their suspension of concessi ons and other obligations, the United States and
Canada were seeking redress of a perceived violation of the Marrakesh Agreement Establishing the
World Trade Organization (the " WTO Agreement") without having recourse to the rules and
procedures of the DSU, in violation of Article 23.2(a) of the DSU read in conjunction with
Articles 21.5 and 23.1.
31 The European Communities argued that the United States and Canada
should have initiated a compliance proceeding under Article 21.5 of the DSU following notification of
the implementing measure to the DSB if they consider ed that this measure was not consistent with the
covered agreements. Their failure to do so viol ated the specific prohibition to make unilateral
determinations set out in Article 23.2(a) of the DSU. The European Communities therefore argued
that the continued suspension of concessions or ot her obligations by the United States and Canada
constituted a violation of Article 23.2(a) read in conjunction with Articles 21.5 and 23.1 of the DSU.
14. In its second "series of main claims", the European Communities argued that the United
States and Canada, by failing to have recourse to, a nd abide by, the rules and procedures of the DSU,
violated Article 23.1 read in conjunction with Artic les 22.8 and 3.7 of the DSU. In particular, the
European Communities argued that Article 22.8 of the DSU prohibits the continued application of the
suspension of concessions when the measure found to be inconsistent is remove d. In addition to the
two series of main claims, the European Commun ities asserted that the continued suspension of
concessions or other obligations by the United St ates and Canada violates Articles I and II of the
GATT 1994.
32 Finally, the European Communiti es made an "alternative" claim33, conditional on "the

29Panel Report, US – Continued Suspension, para. 1.1; Panel Report, Canada – Continued Suspension,
para. 1.1.
30Panel Report, US – Continued Suspension, para. 1.3; Panel Report, Canada – Continued Suspension,
para. 1.3. Two separate Panels were established to examine the complaints against the United States and
Canada, respectively; however, the Panels were compos ed of the same panelists. As the composition of both
Panels was identical, in this Report we refer to the Panels collectively as the "Panel".
31Panel Report, US – Continued Suspension , para. 7.153; Panel Report, Canada – Continued
Suspension, para. 7.140.
32Panel Report, US – Continued Suspension, para. 3.1; Panel Report, Canada – Continued Suspension,
para. 3.1.
33Panel Report, US – Continued Suspension , para. 7.155; Panel Report, Canada – Continued
Suspension, para. 7.142.

Panel find[ing] no violation of Article 23 of the DS U, ... that [the United States'/Canada's] measure[s]
violate[] Article 22.8 of the DSU and Articles I and II of the GATT 1994."
34
15. The United States and Canada rejected the Eur opean Communities' claims, arguing that their
measures suspending concessions or other obligations are consistent with Article 22.8 of the DSU.
According to the United States and Canada, the suspension of concessions was authorized by the DSB
and this authorization remains in effect. 35 They further argued that the European Communities has
failed to comply with the DSB's recommendations and rulings stemming from EC – Hormones ,
because Directive 2003/74/EC is inconsistent with the SPS Agreement, in particular, Articles 3.3, 5.1,
and 5.7.36 The United States also alleged that the European Communities' implementing measure is
inconsistent with Article 5.2 of the SPS Agreement.37
16. The Panel Reports were circulated to Members of the World Trade Organization (the "WTO")
on 31 March 2008. The Panel began its analysis with the European Communities' first series of main
claims and found that the United States and Canada "violated Article 23.1 and 23.2(a) of the DSU by
seeking redress of a violation of the WTO Agreement through a determination that the [European
Communities'] implementing measure did not comply with the DSB recommendations and rulings in
the EC – Hormones case without having recourse to dispute settlement in accordance with the rules
and procedures of the DSU." 38 Turning to the European Communities' second series of main claims,
the Panel explained that the European Commun ities' "second series of main claims" and its
"conditional" claim under Article 22.8 of the DSU were both "based on the [European Communities']
view that it has complied with the recomme ndations and rulings of the DSB in the EC – Hormones
case by adopting Directive 2003/74/EC and properly notifying it to the DSB". 39 "The difference",
according to the Panel, "is that, under the conditi onal claim, the European Communities alleges actual
compliance, and not that it should be presumed to have complied in good faith." 40 The Panel then
observed that it "could not agree with the European Communities and base [its] findings of violation
of Article 23.1 read in conjunction with Artic le 22.8 and 3.7 of the DSU on an irrebuttable

34Panel Report, US – Continued Suspension, para. 3.2; Panel Report, Canada – Continued Suspension,
para. 3.2.
35Panel Report, US – Continued Suspension , para. 4.78; Panel Report, Canada – Continued
Suspension, para. 4.78.
36Panel Report, US – Continued Suspension , para. 7.180; Panel Report, Canada – Continued
Suspension, paras. 7.398, 7.552, and 7.826.
38Panel Report, US – Continued Suspension , para. 7.251; Panel Report, Canada – Continued
Suspension, para. 7.244.
39Panel Report, US – Continued Suspension , para. 7.156; Panel Report, Canada – Continued
Suspension, para. 7.143. (emphasis omitted)
40Panel Report, US – Continued Suspension , para. 7.156; Panel Report, Canada – Continued
Suspension, para. 7.143.

presumption of good faith compliance". 41 Consequently, the Panel said that it would have to
determine whether it had jurisdiction to examine the consistency of the European Communities'
implementing measure with the SPS Agreement . It concluded that it was "entitled to determine
whether the European Communities has removed the measure found to be inconsistent with a covered
agreement in order to establish whether Articl e 22.8 has been breached" by the United States and
Canada.42 In particular, the Panel determined that it would review the compatibility of the European
Communities' implementing measure with Articles 5.1, 5.7, and 3.3 of the SPS Agreement.43 In the
case against the United States, the Panel said it w ould additionally examine the compatibility with
Article 5.2 of the SPS Agreement.44
17. The Panel proceeded to examine the comp atibility of the European Communities'
implementing measure and made the following findings. As regards Article 5.2 in the case against the
United States, the Panel found that "the Europ ean Communities took into account risk assessment
techniques of the relevant international organiza tions and took into account the factors listed in
Article 5.2 of the SPS Agreement."45
18. In relation to Article 5.1 of the SPS Agreement, the Panel found:
[T]he Opinions do not constitute a risk assessment because the
Opinions do not satisfy the definition of a risk assessment contained
in Annex A(4) second sentence and because the scien tific evidence
referred to in the Opinions does not support the conclusions therein.
Because the Opinions are not a risk assessment as appropriate to the
circumstances, the measure cannot be based on a risk assessment
within the meaning of Article 5.1.
46 (footnote omitted)
In light of the above, the Panel concludes that the [European
Communities'] implementing measure on oestradiol-17 β is not
compatible with Article 5.1 of the SPS Agreement.47
19. In respect of Article 5.7 of the SPS Agreement, the Panel found:
[I]t has not been demonstrated th at relevant scientific evidence was
insufficient, within the meaning of Article 5.7 of the SPS Agreement,

41Panel Report, US – Continued Suspension , para. 7.359; Panel Report, Canada – Continued
Suspension, para. 7.357.
42Panel Report, US – Continued Suspension , para. 7.372; Panel Report, Canada – Continued
Suspension, para. 7.369.
43Panel Report, US – Continued Suspension , para. 7.411; Panel Report, Canada – Continued
Suspension, para. 7.402.
45Ibid., para. 7.573.
46Panel Report, US – Continued Suspension , para. 7.578; Panel Report, Canada – Continued
Suspension, para. 7.548.
47Panel Report, US – Continued Suspension , para. 7.579; Panel Report, Canada – Continued
Suspension, para. 7.549.

in relation to any of the five hormones with respect to which the
European Communities applies a provisional ban.
48
We therefore conclude that the [European Communities'] compliance
measure does not meet the require ments of Article 5.7 of the
SPS Agreement as far as the provisional ban on progesterone,
testosterone, zeranol, trenbolone acetate and melengestrol acetate is
concerned.49
20. The Panel refrained from making fi ndings on Article 3.3 of the SPS Agreement, explaining
that, "[i]n light of our mandate and of our objectives in engaging in a review of the conformity of the
[European Communities'] implementing measure with the SPS Agreement, we see no reason to reach
a conclusion on Article 3.3 of the SPS Agreement, to the extent that this conclusion depends on a
violation of Article 5."50
21. Having concluded its analysis under the SPS Agreement , the Panel made the following
findings in respect of the European Communities' second series of main claims:
[W]e conclude that it has not b een established that the European
Communities has removed the measure found to be inconsistent with
a covered agreement.51
For these reasons and those developed above, we find that the
European Communities did not demonstrate a breach of Article 22.8
of the DSU by [the United States and Canada].
52
The Panel recalls its understanding th at violations of Articles 23.1
and 3.7 were only claimed in relati on to the violation of Article 22.8
of the DSU. To the extent that Article 22.8 has not been breached,
the European Communities has not established a violation of
Articles 23.1 and 3.7 of the DSU. The Panel concludes that there is
no violation of Articles 23.1 and 3.7 of the DSU by [the United
States and Canada] as a result of a breach of Article 22.8.
53

48Panel Report, US – Continued Suspension , para. 7.835; Panel Report, Canada – Continued
Suspension, para. 7.821.
49Panel Report, US – Continued Suspension , para. 7.836; Panel Report, Canada – Continued
Suspension, para. 7.822.
50Panel Report, US – Continued Suspension , para. 7.845; Panel Report, Canada – Continued
Suspension, para. 7.830.
51Panel Report, US – Continued Suspension , para. 7.847; Panel Report, Canada – Continued
Suspension, para. 7.832.
52Panel Report, US – Continued Suspension , para. 7.850; Panel Report, Canada – Continued
Suspension, para. 7.835.
53Panel Report, US – Continued Suspension , para. 7.851; Panel Report, Canada – Continued
Suspension, para. 7.836.

22. The Panel also rejected the European Commun ities' claims under Articles I:1 and II of the
GATT 1994.54 Finally, the Panel addressed the European Communities' alternative claim of violation
of Article 22.8 of the DSU:
We recall that the European Communities also raised a conditional
claim of violation of Article 22.8 of the DSU per se. The European
Communities specified in its first written submission that this claim
was "made in the alternative and only on the condition that the Panel
does not establish any violation under Articles 23.1, 23.2(a), 3.7, 22.8
and 21.5 of the DSU".
We note that we have established a violation of Article 23.1
and 23.2(a). We also recall that we have already addressed the
alleged violation of Article 22.8 of the DSU as part of our review of
the [European Communities'] claim of violation of Article 23.1 read
together with Article 22.8 and Article 3.7 of the DSU. Under those
circumstances, it is not necessary for the Panel to address the
conditional claim of violation [of] 22.8 of the DSU per se in the
alternative.
55 (original emphasis; footnote omitted)
23. On the basis of the above, the Panel conclude d that the United States and Canada had made
the following "procedural violations":
(a) by seeking, through the measure at issue—that is the
suspension of concessions or other obligations subsequent to the
notification of the [European Communities'] implementing measure
(Directive 2003/74/EC)—the redress of a violation of obligations
under a covered agreement without having recourse to, and abiding
by, the rules and procedures of the DSU, [the United States and
Canada have] breached Article 23.1 of the DSU;
(b) by making a determination within the meaning of
Article 23.2(a) of the DSU to the effect that a violation had occurred
without having recourse to dispute settlement in accordance with the
rules and procedures of the DSU, [the United States and Canada
have] breached Article 23.2(a) of the DSU.
56
24. As regards the European Communities' claims concerning Article 23.1 of the DSU, read
together with Articles 22.8 and 3.7, the Panel concluded:
(a) to the extent that the measure found to be inconsistent with
the SPS Agreement in the EC – Hormones dispute [(WT/DS26,
WT/DS48)] has not been removed by the European Communities,

54Panel Report, US – Continued Suspension , para. 7.853; Panel Report, Canada – Continued
Suspension, para. 7.838.
55Panel Report, US – Continued Suspension , paras. 7.854 and 7.855; Panel Report, Canada –
Continued Suspension, paras. 7.839 and 7.840.
56Panel Report, US – Continued Suspension , para. 7.856; Panel Report, Canada – Continued
Suspension, para. 7.841.

[the United States and Canada have] not breached Article 22.8 of the
DSU;
(b) to the extent that Article 22.8 has not been breached, the
European Communities has not established a violation of
Articles 23.1 and 3.7 of the DSU as a result of a breach of
Article 22.8.
57 (original emphasis)
25. In the light of its conclusions, the Panel r ecommended that the DSB request the United States
and Canada to bring their measures into conf ormity with their obligations under the DSU. 58 T h e
Panel made the following additional remarks and suggestion pursuant to Article 19.1 of the DSU
regarding the implementation of its findings and conclusions:
Whereas it is for the Members to decide on the appropriate steps
needed to bring measures found in breach of their WTO obligations
into conformity, the Panel deems it important to recall its conclusion
in [paragraph 7.251 in US – Continued Suspension and
paragraph 7.244 in Canada – Continued Suspension ] as the parties
have apparently diverging opinion s as to how this report should be
implemented by the respondent. As already mentioned, while the
Panel performed functions similar to that of an Article 21.5 panel,
this was done only in order to dete rmine whether Article 22.8 of the
DSU had been breached. This Panel was not called upon, nor does it
have jurisdiction, to determine the compatibility of
Directive 2003/74/EC with the covered agreements. In that context,
the Panel suggests that, in order to implement its findings under
Article 23 and in order to ensure the prompt settlement of this
dispute, [the United States and Ca nada] should have recourse to the
rules and procedures of the DSU without delay.
59
26. On 29 May 2008, the European Communities notif ied the DSB, pursuant to Article 16.4 of
the DSU, of its intention to appeal certain i ssues of law covered in the Panel Reports in US –
Continued Suspension and Canada – Continued Suspension and certain legal interpretations
developed by the Panel and filed a single Notice of Appeal 60, pursuant to Rule 20 of the Working
Procedures for Appellate Review61 (the "Working Procedures").
27. In a letter dated 30 May 2008, the Division noted that, in the interests of "fairness and orderly
procedure", as referred to in Rule 16(1) of the Working Procedures , and in agreement with the
participants, the appellate proceedings in respect of the European Communities' appeal from the Panel

57Panel Report, US – Continued Suspension , para. 7.857; Panel Report, Canada – Continued
Suspension, para. 7.842.
58Panel Report, US – Continued Suspension, para. 8.2; Panel Report, Canada – Continued Suspension,
para. 8.2.
59Panel Report, US – Continued Suspension, para. 8.3; Panel Report, Canada – Continued Suspension,
para. 8.3.
60WT/DS320/12, WT/DS321/12 (attached as Annex I to this Report).
61WT/AB/WP/5, 4 January 2005.

Reports in US – Continued Suspension and Canada – Continued Suspension would be consolidated
due to the substantial overlap in the content of th e disputes. A single Division would hear and decide
the appeals, and a single oral hearing would be held by the Division. 62 The participants were further
informed that Appellate Body Member, Mr. Georg es Abi-Saab, had been selected, on the basis of
rotation, to serve on the Division hearing these app eals, and that, in accordance with Rule 15 of the
Working Procedures , the Appellate Body had notified the Chairman of the DSB of its decision to
authorize Mr. Abi-Saab to complete the dispos ition of the appeals even though his second term as
Appellate Body Member was due to expire before the completion of the appellate proceedings.
28. On 5 June 2008, the European Commun ities filed an appellant's submission. 63
On 10 June 2008, the United States and Canada each notified the DSB, pursuant to Article 16.4 of the
DSU, of its intention to appeal certain issues of law covered in the respective Panel Report and certain
legal interpretations developed by the Panel and filed a Notice of Other Appeal 64, pursuant to
Rule 23(1) and (2) of the Working Procedures. On 13 June 2008, the United States and Canada each
filed an other appellant's submission. 65 On 26 June 2008, Canada, the European Communities, and
the United States each filed an appellee's submission 66, and Australia, Brazil, New Zealand, and
Norway each filed a third participant's submission. 67 On the same day, China, India, Mexico, and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu each notified the Appellate B ody
Secretariat of its intention to appear at the oral hearing as a third participant.68
29. After consultation with the Appellate Body S ecretariat, Canada, the European Communities,
and the United States each agreed that it would not be possible for the Appellate Body to circulate its
Reports in these appeals within the 90-day time- limit referred to in Article 17.5 of the DSU. 69
Canada, the European Communities, and the United States agreed that additional time was needed
because of the preliminary procedural issue arising in these proceedings, the size of the Panel record,
the number and complexity of the issues appealed , and the fact that there was another appellate

62At the oral hearing, the United States and Cana da confirmed their preference for two separate
Appellate Body reports. We have issued separate reports (WT/DS320/AB/R and WT/DS321/AB/R), which are
identical except for the Findings and Conclusions section.
63Pursuant to Rule 21 of the Working Procedures.
64WT/DS320/13 (attached as Annex II to this Report) ; WT/DS321/13 (attached as Annex III to this
Report).
65Pursuant to Rule 23(3) of the Working Procedures.
66Pursuant to Rules 22 and 23(4) of the Working Procedures. After consultation with the participants,
the Division hearing this appeal allocated additional time for filing the appellees' submissions and the third
participants' submissions and notifications, pursuant to Rules 16, 22, 23, 24, and 26 of the Working Procedures.
67Pursuant to Rule 24(1) of the Working Procedures.
68Pursuant to Rule 24(2) of the Working Procedures.
69Letter from the European Commission to the Di rector of the Appellate Body Secretariat
dated 11 July 2008; Letter from Canada to the Director of the Appellate Body Secretariat dated 15 July 2008;
Letter from the United States to the Director of the Appellate Body Secretariat dated 17 July 2008.

proceeding running simultaneously. Accordingly, Canada, the European Communities, and the
United States each confirmed that it would deem the Appellate Body Reports in these proceedings,
issued no later than 16 October 2008, to be Appellate Body reports circulated pursuant to Article 17.5
of the DSU.
70
30. On 27 June 2008, the European Communities sen t a letter to the Appellate Body Secretariat
noting that the United States and Canada had filed their appellee's submissions after the 5:00 p.m.
time-limit set out by the Division in the Working Schedule drawn up for these appeals. The European
Communities referred to Rule 18(1) of the Working Procedures and requested that the Division
"inform the parties of the treatment that should be accorded to these documents". 71 The United States
and Canada responded in separate letters and re quested the Division to reject the European
Communities' request. 72 At the oral hearing, the Division gave a ruling on the European
Communities' request regarding the late filing of the appellee's submission by the United States and
Canada. The Division emphasized the importance of all participants adhering strictly to the time-
limits set out in the Working Schedule, given the time constraints imposed upon both the participants
and the Appellate Body Members in these proceedings. It also noted that the failure to strictly
observe such time-limits can have an impact upon the fairness and the orderly conduct of the
proceedings. However, having thor oughly examined the matter, and in the light of the particular
time-limits concerned and potential prejudice th at might be involved, the Division decided
nevertheless to consider the appellees' submissions filed by the United States and Canada.
31. Canada, the European Communities, and the United States requested, on 3 June 2008, that the
Division authorize public observation of the oral hearing. They argued that public observation of the
oral hearing was not precluded by the DSU, the Working Procedures, or the Rules of Conduct for the

70On 22 July 2008, the Appellate Body notified the Chairman of the DSB that the expected date of
circulation of its Report was 16 October 2008 (WT/DS320/14, WT/DS321/14).
71Letter from the European Commission to the Direct or of the Appellate Body Secretariat dated
27 June 2008.
72Letter from Canada to the Director of the Appella te Body Secretariat dated 30 June 2008; Letter
from the United States to the Director of the Appellate Body Secretariat dated 1 July 2008. Canada noted that
the European Communities' appellee's submission sent via email was also slightly delayed. The United States
noted that the European Communities announced in an email message that it had delivered printed copies of its
appellee's submission to the Appellate Body Secretariat and to the other participants and third participants
before 5 p.m.; however, the United States received the electronic copy of the European Communities' appellee's
submission after 5 p.m., whereas the Working Schedule st ates that "[t]welve printe d copies, as well as an
electronic copy, of each written submission should be filed by 5 p.m., Geneva, Switzerland time, on the due date
indicated in this Working Schedule". (original underlining) In the event the Appellate Body were to rule on the
European Communities' request regarding the United States' appellee's submission, the United States requested
the Appellate Body also to inform the European Communities of the treatme nt to be accorded to its submission
in the light of Rule 18 of the Working Procedures.

Understanding on Rules and Procedures Governing the Settlement of Disputes 73 (the " Rules of
Conduct"). The participants proposed various logis tical arrangements that would allow public
observation, while respecting the confidentiality of any third participants that did not wish to disclose
their oral statements or responses to questions. 74 On 4 June 2008, the Division invited the third
participants to comment in writing on the par ticipants' request to open the hearing to public
observation. In particular, the Division asked for th e third participants' views on the permissibility of
opening the hearing for public observation under the DSU and the Working Procedures, and, if they
so wished, on the specific logistical arrangements proposed in the requests. Comments were received,
on 12 June 2008, from Australia, Brazil, China, I ndia, Mexico, New Zealand, Norway, and the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. Australia, New Zealand,
Norway, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu supported the
participants' request to open the hearing to public observation. Brazil, China, India, and Mexico
requested the Appellate Body to deny the participan ts' request. According to these third participants,
the oral hearing forms part of the proceedings of th e Appellate Body and, therefore, is subject to the
requirement of Article 17.10 of the DSU that "[t] he proceedings of the Appellate Body shall be
confidential". On 16 June 2008, the Division i nvited Canada, the European Communities, and the
United States to comment on the submissions made by the third participants. Third participants who
wished to submit comments on the submissions made by the other third participants were also invited
to do so. Additional comments from Canada, the Eu ropean Communities, and the United States were
received on 23 June 2008. On 7 July 2008, the Divisi on held an oral hearing with the participants and
third participants, exclusively dedicated to expl oring the issues raised by the request of the
participants to authorize public observation. The participants and third pa rticipants made oral
statements and responded to questions from the Di vision. At the end of the oral hearing, the
participants and third participants were invited to submit, by close of business, 8 July 2008, additional
comments relating specifically to the technical mo dalities proposed by the participants for public
observation. Comments were received from Brazil, China, India, and Mexico, as well as Canada, the
European Communities, and the United States.
32. On 10 July 2008, the Division issued a Procedural Ruling in which it authorized the public
observation of the oral hearing and adopted additi onal procedures for that pu rpose in accordance with
Rule 16(1) of the Working Procedures. The Procedural Ruling is attached as Annex 4 of this Report.
Public observation took place via simultaneous clos ed-circuit television broadcast to a separate room.

73The Rules of Conduct , as adopted by the DSB on 3 D ecember 1996 (WT/DSB/RC/1), are
incorporated into the Working Procedures (WT/AB/WP/5), as Annex II thereto. (See WT/DSB/RC/2,
WT/AB/WP/W/2)
74The participants expressed a preference for simultaneous closed-circuit broadcast to a separate room.

Notice of the opening of the hearing to public obser vation and registration instructions were provided
on the WTO website. A total of 80 individuals registered to observe the oral hearing.
33. The oral hearing took place on 28-29 July 2008. Pursuant to the additional procedures
adopted by the Division, Canada, the European Co mmunities, and the United States were authorized
to disclose their oral statements and responses to questions. Australia, New Zealand, Norway, and the
Separate Customs Territory of Ta iwan, Penghu, Kinmen and Matsu were also authorized to disclose
their statements and responses to questions. The or al statements and responses to questions of the
other third participants were not subject to observation by the public.
II. Arguments of the Participants and the Third Participants
A. Claims of the European Communities – Appellant
1. Procedural Issue – Public Observation of the Oral Hearing

34. The European Communities requested the Appella te Body to allow public observation of the
oral hearing in these proceedings. The European Communities recognizes that Article 17.10 of the
DSU provides that "[t]he proceedings of the Appellate Body shall be confidential". Nevertheless, for
the European Communities, "it is by no means obvious that the term 'proceedings' covers the oral
hearing of the Appellate Body." 75 The European Communities submits that "an interpretation of the
ordinary meaning of that term in its context and in light of the DSU's object and purpose will
demonstrate that '[t]he proceedings of the Appella te Body' rather refers to the Appellate Body's
internal work, and does not include its oral hearing, and that Article 17.10 in any event does not
prohibit an open oral hearing."
76
35. The European Communities acknowledges that Article 14.1 of the DSU refers to the
"deliberations" of the panel as being confidential. However, the European Communities argues that
the choice of the different words "deliberations" a nd "proceedings" may be explained by the fact that
the idea of creating an Appellate Body emerged relatively late in the negotiations on the DSU, and the
fact that the DSU regulates the appellate review in much more rudimentary terms than the panel
procedure. Therefore, the European Communities finds no basis for understanding the choice of the
different words "deliberations" and "proceedings" as reflecting an intention to draw a difference for
the question at issue, and to rule out public ob servation of Appellate Body oral hearings. The
European Communities also refers to the French and Spanish versions of Article 17.10 that use the
terms " travaux" and " actuaciones", respectively. The European Communities states that these are

75European Communities' request for an open hearing, para. 9.
76Ibid.

"very broad terms that could cover every work whic h the Appellate Body performs", but that such a
literal reading "would give rise to absurd results". 77 Thus, these terms have to be given a "more
plausible meaning"78 and are best understood as capturing the internal work of the Appellate Body.
36. According to the European Communities, interp reting "proceedings" more broadly than "the
internal work of the Appellate Body" leads to probl ematic results. First, the oral hearing would be
confidential with "the absurd result ... that the pa rties themselves could not attend the hearing in their
own dispute".79 Secondly, it would preclude the Appellate Body from referring to the arguments of
the participants in the Appellate Body report. Thir dly, the Notices of Appeal could not be circulated
to WTO Members and made public.
37. The European Communities asserts that, if the Appellate Body was "empowered" 80 by
Article 17.9 of the DSU to draw up its Working Procedures and thereby to create the "oral hearing",
even though an oral hearing is not foreseen in the DS U, it is also entitled to hold an oral hearing that
is open for public observation. The European Co mmunities submits that allowing public observation
of the oral hearing "gives effect to the choice which the DSU offers to the parties"81 under Article 18.2
of the DSU, which provides that "[n]othing in [the DSU] shall preclude a party to a dispute from
disclosing statements of its own positions". Mo reover, the European Communities states that, in
accordance with Article 3.7 of the DSU, the objec tive of the WTO dispute settlement mechanism is
"to secure a positive solution to a dispute". It follows that if the parties to a dispute jointly consider
that an open hearing is an important part of th eir desired way to find a positive solution of their
dispute, then it is in line with the object and purpose of the DSU to accommodate that request.
38. The European Communities maintains that c onfidentiality under the DSU is correctly
understood as protecting the interests of WTO Member s where they consider that they need that
protection, and not as an obligation imposed , even where WTO Members do not desire
confidentiality. The European Communities adds that "[t]he other function of confidentiality is to
protect the integrity of the (quasi-)judicial process, bu t in contrast to secret deliberations, this function
does not require closed hearings." 82 On the contrary, the Europ ean Communities argues that open
hearings are even better and more natural for th e judicial process, as the tradition of open oral
hearings in national and international judiciaries around the world demonstrates.

77European Communities' request for an open hearing, para. 15.
78Ibid.
79Ibid., para. 19.
80Ibid., para. 25.
81Ibid., para. 26. (emphasis omitted)
82Ibid., para. 31.

39. Finally, the European Communities submits th at the Appellate Body should follow the
example of the Panel in these proceedings and of other panels which have allowed public observation
of their meetings with the parties. The Eur opean Communities additionally refers to various
international courts and tribunals that allow the public to observe their hearings.
40. The European Communities rejects the arguments made by the third participants that oppose
the request to open the hearing on the basis of their interpretation of the scope of the term
"proceedings". The European Communities stat es that none of these third participants "has
commented on the many inconsistencies that would ar ise out of such a reading ..., not least the fact
that the confidentiality requirement obviously does not apply to certain other aspects of the
'proceedings' in a broad sense (such as the notice of appeal, the disclosure of statements in the
report etc. ... )."
83 The European Communities al so rejects the relevance of the interpretation of the
term "proceedings" in Canada – Aircraft , because that case involved a different issue, namely,
whether additional procedures were necessary for the protection of business confidential information.
As regards Article 18.2 of the DSU, the European Communities considers that this provision "trumps
any confidentiality requirements that may exist elsewhere in the agreement" 84, rather than vice-versa,
as suggested by some third participants. More over, the European Communities disagrees with the
argument that the Appellate Body's decision in this case will prejudge the outcome of the DSU review
negotiations.
41. For these reasons, the European Communities re quests the Appellate Body to allow public
observation of the hearing in these proceedings. Th e European Communities st ates that its preferred
format is to allow public observation of the Appellate Body's oral hearing "by way of real-time
closed-circuit audio and video broadcast to a separate room".
85
2. Articles 23.2(a) and 21.5 of the DSU
42. Although it agrees with the Panel's finding that the United States and Canada have acted
inconsistently with Articles 23.2(a) and 23.1 of the DSU, the European Co mmunities asserts that the
Panel erred by failing to find that Article 23.2(a), read together with Articles 21.5 and 23.1, required
the United States and Canada to initiate Article 21.5 proceedings if they considered that
Directive 2003/74/EC did not comply with th e DSB's recommendations and rulings in EC –
Hormones.

83European Communities' comments on third participants' comments, para. 4.
84Ibid., para. 10.
85European Communities' request for an open hearing, para. 45.

43. According to the European Communities, when a WTO Member considers that the
implementing measure taken by another WTO Member is not consistent with the covered agreements,
and proceeds to enforce what it considers to be its rights under the DSU, that Member is obliged first
to have recourse to a compliance procedure under Article 21.5 of the DSU. The European
Communities asserts that "a WTO Member is not ent itled, in these circumstances, to seek the redress
of an alleged violation through the suspension of obligations without first having recourse to a
compliance procedure."
86
44. In the view of the European Communities, the Panel confused the question of whether
recourse to Article 21.5 is obligatory and the question of what procedures are available under
Article 21.5. The European Communities disagrees with the Panel's interpretation of the phrase
"except through recourse to dispute settlement in ac cordance with the rules and procedures of this
Understanding" in Article 23.2(a) as "encompassing any of the means of dispute settlement provided
in the DSU, including consultation, conciliation, good offices and mediation". 87 According to the
European Communities, "[i]t is not in dispute" 88 that the United States and Canada disagree with the
European Communities as to the consiste ncy of Directive 2003/74/EC with the SPS Agreement .
Consequently, the present dispute "clearly" falls within the scope of Article 21.5 because it concerns a
"disagreement as to the existence or consistency with a covered agreement of measures taken to
comply with the recommendations and rulings" 89 of the DSB in EC – Hormones . The European
Communities emphasizes that consultation, concilia tion, good offices, and mediation under the DSU
have no effect unless the results are accepted by the parties. In this dispute, the European
Communities argues, "it is manifest that no procedure requiring the agreement between the parties
was available"
90, because the European Communities exhaus ted all available options, including
arbitration under Article 25 of the DSU, in its a ttempt to come to an agreement with the responding
parties. The European Communities submits that the phrase "shall be decided through recourse to
these dispute settlement procedures, including wherever possible resort to the original panel" in
Article 21.5 implies an obligation to have recourse to compliance panel proceedings and that, in the
absence of an amicable solution, there must be a final and binding ruling by an adjudicative body.
The European Communities concludes from this that "Article 21.5 of the DSU is the applicable
provision because the WTO members clearly privileged that provision in case of disagreement
between the parties on implementation". 91 Thus, the European Commun ities maintains that the Panel

87Ibid., para. 48 (referring to Panel Report, US – Continued Suspension, para. 7.247; and Panel Report,
Canada – Continued Suspension, para. 7.240).
89Ibid., para. 49.
90Ibid., para. 54.
91Ibid., para. 61.

erred in failing to draw the necessary conclusion th at an Article 21.5 pane l proceeding was the only
applicable procedure available under the DSU and th at such a panel procedure was "the only way for
the United States and Canada to proceed".
92
45. The European Communities argues furthermore that the Panel erred in finding that
compliance panel proceedings may be initiated by the European Communities as the original
responding party in EC – Hormones . On the contrary, the European Communities submits, it is
inherent in the wording, context, and object and purpose of the provision that the original complaining
parties, that is, the United States and Canada, are required to have r ecourse to Article 21.5. 93 T h e
European Communities maintains that references in Articles 3.12, 4.4, 4.7, and 6 of the DSU to
"complaining party" and "complainant" confirm that the WTO dispute settlement system is based on
the notion of "adversarial proceedings" and "is not ap plicable to requests for an abstract confirmation
of the consistency of a measure" 94 by the defending party. Thus, where a complaining party alleges
that an implementing measure is not consistent with the covered agreements, the "implementing
Member cannot have recourse to Article 21.5 of the DSU in order to confirm the WTO-consistency of
its compliance measure." 95 The European Communities asserts that this understanding is confirmed
by the very notion of the DSU as a "dispute" settleme nt system and by the basic logic reflected in
Article 3.3 of the DSU and Article XXIII:2 of the GATT 1994, which assumes a situation where a
WTO Member considers that its rights are being impaired by another Member's measure and therefore
challenges that measure, and "does not address the situation where a Member is complaining against
its own measure".96
46. The European Communities additionally contends that "[i]t would be manifestly impossible
for the European Communities to fu lfil the very basic requirements of Article 6" as regards the
content of the request for the establishment of a pa nel, because "it would not be in a position to
identify the provisions of the SPS Agreement that are violated." 97 Moreover, the European
Communities maintains that compliance panel pro ceedings initiated by the European Communities
would not lead to recommendations addressed to th e retaliatory measures taken by the United States
and Canada, because these measures are not the measu re taken to comply with respect to which a
disagreement exists within the meaning of Article 21.5. The European Commu nities also points out
that an original complainant may refuse to partic ipate in compliance panel proceedings initiated by
the original respondent, as in fact occurred in EC – Bananas III (Article 21.5 – EC) . The European

93See ibid., para. 75.
94Ibid., para. 78. (original emphasis)
95Ibid., para. 78.
96Ibid., para. 85.
97Ibid., para. 88.

Communities considers that the "subsequent practice" 98 that has developed in the WTO dispute
settlement system confirms its understanding that Artic le 21.5 is only available to complaining parties
in the original dispute. The European Commun ities points out that, since the establishment of the
WTO, 30 out of 31 proceedings pursuant to Article 21.5 were initiated by the original complaining
party, and the panel report in the one remaining pr oceeding, initiated by the original responding party,
was never adopted. This demonstrates that such a procedure is not an option for the original
responding party.
47. On this basis, the European Communities requests the Appellate Body to reverse the Panel's
findings that the scope of the phrase "recourse to these dispute settlement procedures" in
Article 23.2(a) is not limited to Article 21.5 pane l proceedings initiated, in this case, by the United
States and Canada as the original complaining part ies, and that the European Communities, as the
original respondent, may initiate Article 21.5 proceedings.
3. Article 22.8 of the DSU
48. The European Communities alleges that the Pa nel erred in finding that the European
Communities' second series of main claims were premised on: (i) a violation by the United States and
Canada of their obligations under Article 22.8 of th e DSU; and (ii) the actual conformity with the
SPS Agreement of the implementing measure taken by the European Communities.
99 In its second
series of main claims before the Panel, the Eur opean Communities argued that the United States and
Canada have acted inconsistently with Article 23.1 of the DSU, read together with Articles 22.8
and 3.7, by maintaining the suspension of concessi ons despite the removal of the "measure found to
be inconsistent" within the meaning of Article 22.8—that is, Directive 96/22/EC. 100
49. The European Communities explains that it neve r argued that the claim under Article 23.1 of
the DSU was dependent on a violation of Article 22.8 by the United States and Canada and never
argued that this claim would be premised on the conformity of the implementing measure with the
SPS Agreement. Rather, the violation the European Communities claimed was the unilateral
determination made by the United States and Cana da according to which "the measure taken to
comply" with the recommendations and rulings of the DSB, that is, Directive 2003/74/EC, is not, in
their view, consistent with the SPS Agreement . The European Communities adds that such a
determination is a violation of Ar ticle 23.1 of the DSU read in the light of Article 22.8 of the DSU,

99Ibid., paras. 99 and 100 (referring to Panel Report, US – Continued Suspension , para. 7.272; and
Panel Report, Canada – Continued Suspension, para. 7.288).
100Panel Report, US – Continued Suspension , para. 7.252; Panel Report, Canada – Continued
Suspension, para. 7.245.

not a claim of violation of Article 22.8 in itself, and is not premised on the conformity of the
implementing measure with the SPS Agreement. The European Communiti es additionally notes that
only in the alternative, and only on the condition th at the Panel did not establish any violation under
Articles 23.1, 23.2(a), 3.7, 22.8 and 21.5 of the DSU, did the European Communities make an
alternative claim under Article 22.8 of the DSU.
101
50. The European Communities asserts that the Pa nel "fail[ed] to provide any serious legal
argumentation"102 as to why, under Article 22.8, what is to be achieved is not the removal of the
measure, but actual compliance with the DSB' s recommendations and rulings. The European
Communities takes issue with the Panel's finding that the replacement of Directive 96/22/EC by
Directive 2003/74/EC did not constitu te the removal of the inconsiste nt measure within the meaning
of Article 22.8, because Directive 2003/74/EC, like its predecessor, imposes an import ban on meat
treated with hormones. According to the European Communities, this finding contradicts the Panel's
earlier finding that "it is not the ban on meat trea ted with growth promotion hormones as such that
was found illegal in the EC – Hormones case, but the justification for this ban which was found
insufficient."
103 Moreover, the European Communities underscores the Panel's finding that
Directive 2003/74/EC "shows all the signs of an implementing measure having gone through all the
formal process required for its adoption and showing, on its face, all the signs of a measure adopted in
good faith." 104 The European Communities contends that, because the Panel concluded that
Directive 96/22/EC—the measure found to be inc onsistent with a covered agreement—has been
removed, it follows from the wording of Article 22.8 that the application of the suspension of
concessions was no longer authorized after the adoption and the subsequent notification of
Directive 2003/74/EC to the DSB. The European Communities also emphasizes that Articles 3.7
and 22.8 both recognize that the suspension of co ncessions or other obligations is a temporary
measure of last resort.
105
51. The European Communities emphasizes that Artic le 22.8 refers to whether the "measure
found to be inconsistent with a covered agreement" has been rem oved. The European Communities
asserts that, in this particular case, the measure found to be inconsistent within the meaning of
Article 22.8 was the measure that was subject to the original dispute in EC – Hormones and that was

102Ibid., para. 105.
103Ibid., para. 106 (quoting Panel Report, US – Continued Suspension , para. 7.207; and Panel Report,
Canada – Continued Suspension, para. 7.199). (emphasis omitted)
104Ibid., para. 108 (quoting Panel Report, US – Continued Suspension , para. 7.238; and Panel Report,
Canada – Continued Suspension, para. 7.231). (emphasis omitted)
105Ibid., paras. 115 and 116. The European Communities also refers to its own conduct in US – FSC ,
where it suspended the application of retaliatory measur es and initiated an Article 21.5 proceeding because it
considered the United States' implemen ting measure to be inconsistent with the relevant covered agreements.
(Ibid., para. 156)

identified by the Appellate Body as the measu re found to be inconsistent with the SPS Agreement
in 1998. That measure was Directive 96/22/EC . Thus, once the European Communities adopted
Directive 2003/74/EC, which was based on a new risk assessment that explicitly aimed at addressing
the shortcomings found in EC – Hormones with respect to Directive 96/22/EC, the suspension of
concessions or other obligations could no longer be applied. Once the original measure was removed,
the suspension of concessions would continue w ithout its main objective—implementation of the
DSB's recommendations and rulings—because the impl ementing measure had already been taken.
The objective to induce compliance could only "reviv e after it has been properly established before a
compliance procedure under Article 21.5 of the DSU that the implementing measure has been
insufficient to remedy a WTO violation."
106
52. The European Communities contends that "Artic les 21 and 22 of the DSU [were] ... drafted
around a basic dichotomy between 'the measure found to be inconsistent' and the 'measures taken to
comply'."107 Therefore, "whether the measure taken [b y the European Communities] to comply is
compliant with the recommendations and rulings of the DSB" 108 is a matter to be determined by a
panel acting under Article 21.5 of the DSU. Unlike Article 21.5, Article 22.8 refers to whether the
measure has been removed and does not refer to whet her the measure taken to comply is consistent
with the DSB's recommendations and rulings. Th e European Communities adds that interpreting
Article 22.8 as referring to "actual compliance", as the Panel did, would allow the original
complaining Member to make a unilateral determin ation of the substantive merits of the measure
taken to comply without recourse to Article 21.5 of the DSU.
53. The European Communities considers that the Pa nel "fundamentally erred" in the manner in
which it identified the "measure found to be incons istent with a covered agreement" in order to
determine whether it "has been removed"
109 within the meaning of Article 22.8 of the DSU. The
European Communities states that, even thoug h the Panel initially considered that
Directive 96/22/EC, that is, the SPS measure subject to the original proceedings in EC – Hormones,
was removed, the Panel later held the view that considering Directive 96/22/EC as the measure found

107Ibid., paras. 136 and 137 (referring to the Appellate Body's statement in paragraph 36 of its Report in
Canada – Aircraft (Article 21.5 – Brazil) that "a measure which has been 'taken to comply ...' ... will not be the
same measure as the measure which was th e subject of the original dispute, so that, in principle, there would be
two separate and distinct measures" (original emphasis; footnote omitted)).
108Ibid., para. 142.
109Ibid., para. 145.

to be inconsistent with a covere d agreement within the meaning of Article 22.8 is "unsatisfactory, as
Directive 96/22/EC was replaced by Directive 2003/74/EC which also imposes an import ban".
110
54. For these reasons, the European Communities re quests the Appellate Body to reverse the
Panel's finding that the European Communities' cl aims under Articles 23.1, 22.8, and 3.7 of the DSU
were premised on a violation of Article 22.8 a nd on the actual compliance of Directive 2003/74/EC
with the SPS Agreement. It also requests the Appellate Body to complete the analysis and find that
the United States and Canada have breached Article 23.1 of the DSU by continuing the suspension of
concessions despite the adoption and subsequent notification to the DSB of Directive 2003/74/EC.
4. The Panel's Terms of Reference
55. The European Communities maintains that its alternative claim of a "direct" 111 violation of
Article 22.8, on the basis of its actual compliance with the SPS Agreement , was "strictly" 112
predicated on the condition that the Panel found no violations pursuant to the European Communities'
two series of main claims. The European Communiti es asserts that the Panel should not have ignored
the "hierarchy" 113 and "conditional order of the legal clai ms" because it "form[ed] part of [its]
mandate".114 The European Communities reiterates that its second series of main claims, alleging that
the United States and Canada have violated Article 23 .1, read together with Articles 22.8 and 3.7, did
not depend on the presumed or actual complian ce of Directive 2003/74/EC with the DSB's
recommendations and rulings, but were premised on the fact that the measure found to be inconsistent
with a covered agreement, within the meaning of Ar ticle 22.8, had been removed. Therefore, whether
Directive 2003/74/EC complies with the SPS Agreement was only relevant for the European
Communities' conditional "alternative" claim, whic h the Panel should have examined only if the
condition that the Panel found no violation under th e European Communities' two series of main
claims had been met. On this basis, the European Communities argues that the Panel ignored the
clear indication by the European Communities as to the hierarchy and conditional order of its claims
and exceeded its mandate by reviewing the comp atibility of Directive 2003/74/EC with the SPS
Agreement, even though the Panel had al ready found that the United States and Canada had breached
Articles 23.1 and 23.2(a) of the DSU.

110European Communities' appellant's submission, para. 146 (quoting Panel Report, US – Continued
Suspension, paras. 7.283 and 7.284; and Panel Report, Canada – Continued Suspension , paras 7.299
and 7.300).
111Ibid., para. 160 (quoting Panel Report, US – Continued Suspension , para. 7.164; and Panel Report,
Canada – Continued Suspension, para. 7.151).
112Ibid., para. 165.
113Ibid., para. 162.
114Ibid., para. 167.

56. The European Communities alleges that, as shown by the panel report in EC – Sardines, when
a panel has clear indications by the complaining part y as to the order of its legal claims, it is "bound
by the sequencing order of the legal claims" 115 if such an order does not affect the proper
interpretation of the relevant provisions of the cove red agreements. In this dispute, the order of
claims raised by the European Communities did not affect the proper interpretation of the relevant
provisions of the DSU and the SPS Agreement, and the Panel erred in failing to follow this order.
57. The European Communities emphasizes that its "main point in these proceedings was to
establish that the proper place to review compliance was before an Article 21.5 panel at the request of
the United States or Canada on the basis of explicit claims setting out their objections to the new
measures."
116 It adds that, had the Panel followed the or der and conditions of the claims made by the
European Communities, it would not have acted as a compliance panel in blatant disregard of its
terms of reference and the very specific requirements under Article 21.5 of the DSU as informed,
inter alia , by Article 6 of the DSU. The European Communities notes, in this regard, what it
considers to be contradictory statements by the Pa nel with respect to whether or not the Panel was
"substitut[ing]" itself for, or "perform[ing]"
117 the role of, an Article 21.5 panel.
58. Therefore, the European Communities asserts that the Panel "acted ... in blatant disregard of
[its] terms of reference and the ... re quirements under Article 21.5 of the DSU" 118 and erroneously
assumed the function of an Article 21.5 panel, in contravention with Articles 7 and 21.5 of the DSU.
5. The Panel's Suggestion for Implementation
59. The European Communities requests the Appellate Body to "modify" 119 the Panel's
suggestion that the United States and Canada "should ha ve recourse to the rules and procedures of the
DSU without delay". 120 According to the European Communiti es, as a result of the Panel's findings
that the United States and Canada have breached Articles 23.2(a) and 23.1 of the DSU, there is
"no doubt"121 that the continued suspension of concessions is inconsistent with the DSU, even if a
compliance proceeding were initiated without dela y. Consequently, the European Communities
considers that "the United States and Canada shoul d remove their suspension of WTO obligations and

115European Communities' appellant's submission, para. 168 (referring to Panel Report, EC – Sardines,
paras. 7.14-7.19).
116Ibid., para. 170.
117Ibid., paras. 172 and 173 (referring to Panel Report, US – Continued Suspension , paras. 7.276
and 8.3; and Panel Report, Canada – Continued Suspension, paras. 7.292 and 8.3). (emphasis omitted)
118Ibid., para. 171.
119Ibid., para. 456.
120Ibid., para. 478 (quoting Panel Report, US – Continued Suspension , para. 8.3; and Panel Report,
Canada – Continued Suspension, para. 8.3).
121Ibid., para. 468.

have recourse to the rules and procedures of the DSU without delay if they continue to take issue with
the European Communities' implementation of the recommendations"
122 stemming from EC –
Hormones.
60. The European Communities adds that the phr ase "through recourse to dispute settlement" in
Article 23.2(a) requires an outcome of the recourse in the form of binding decisions or an agreement
between the parties. Thus, the European Comm unities argues, the inconsistency resulting from the
continued suspension of concessions will not disapp ear if the United States and Canada merely
request consultations or initiate mediation procedur es. Instead, the United States and Canada must
"complete"123 Article 21.5 proceedings against the European Communities. The European
Communities further submits that it "would be deprived of the protection of Article 23 of the DSU, if
[it] can secure the withdrawal of the sanctions only by winning in the compliance dispute brought by
the United States and Canada, as suggested by the Panel."
124 In the European Communities' view,
Article 23 would be "turned on its head" 125 if a WTO Member were allowed to make first a unilateral
determination—by keeping the susp ension of concessions in place—that an implementing measure of
another Member is WTO-inconsis tent, and only later obtain multilat eral findings in proceedings
initiated by the implementing Member that provide a valid basis for the determination.
61. The European Communities states that the circumstances of this dispute require "clarity" and
a suggestion by the Appellate Body would be "very useful" 126, explaining that the Panel's suggestion
is "too vague to be of much assistance". 127 Thus, the European Comm unities requests the Appellate
Body to "improve" 128 the Panel's suggestion so as to make it clear that the United States and Canada
must cease applying the suspension of concessions , and must seek resolution of any remaining
disagreement concerning the consistency with the SPS Agreement of Directive 2003/74/EC by
having recourse to Article 21.5 panel proceedings or any other proceeding to which the parties may
agree.
6. The Panel's Selection of Experts
62. The European Communities takes issue with the Panel's selection of two experts—
Dr. Jacques Boisseau and Dr. Alan Boobis—who contri buted to the reports by JECFA regarding the
use of the hormones at issue in this dispute. Th e European Communities claims that "any 'reliance'

123Ibid., para. 461.
124Ibid., para. 475.
125Ibid., para. 476. (emphasis omitted)
126Ibid., para. 477.
127Ibid., para. 479.
128Ibid., para. 480.

the Panel[] [has] placed on what these two experts from JECFA said is a violation of the relevant rules
on conflict of interest, of its rights of due process an d of the requirement for the Panel[] to perform an
'objective assessment' of the matter before [it]"129, as required under Article 11 of the DSU.
63. Recalling the Appellate Body's finding in Thailand – H-Beams that the "requirement of due
process is fundamental to ensuring a fair and or derly conduct of dispute settlement proceedings" 130,
the European Communities posits that due pr ocess "informs the entire Dispute Settlement
Understanding".131 In the view of the European Communities, "the consultation of experts by the
Panel[] for the purposes of scientific and technical advice including their selection must respect
general principles of law, and in par ticular the principle of due process."
132 The European
Communities adds that "[i]t is inherent in the princi ple of due process that the parties to a dispute are
given a fair hearing including that the experts a c ourt, tribunal or panel hears or consults are
independent and impartial."133
64. The European Communities contends that "the relevant legal test" 134 for evaluating whether
an expert is independent and impart ial is found in Section VI.2 of the Rules of Conduct , which
requires that experts "disclose any information that could reasonably be expected to be known to them
at the time [they are requested to serve as experts] which ... is likely to affect or give rise to justifiable
doubts as to their independence or impartiality." The European Communities asserts that this
standard is "quite simple and low" and " does not require certainty or high probability". 135 T h e
European Communities asserts that "the Panel[] never actually addressed the relevant legal
question"136 of whether this standard served to disqualify these experts.
65. The European Communities alleges that th e Panel disregarded its "most important
objection"137 that Drs. Boisseau and Boobis, who participated in the drafting of JECFA reports, could
not be independent and impartial because they were asked to evaluate the risk assessments that were
"very critical of the JECFA reports". 138 The European Communities obser ves that as "co-authors" of
the JECFA reports, these experts "cannot be consid ered to be independent and impartial in these

131Ibid., para. 184.
132Ibid., para. 188.
133Ibid. (original emphasis)
134Ibid., para. 195.
135Ibid.
136Ibid., para. 196.
137Ibid., para. 203.
138Ibid., para. 196.

circumstances, because this would amount to asking th em to review and criticise reports that are their
own doing".
139
66. In addition, the European Communities claims th at the Panel's decision to select these experts
was "based on a very narrow definition of a perceive d conflict of interest because it required an actual
or almost certain conflict, not a perceived, likelihood or a justifiable doubts test". 140 According to the
European Communities, a perceived conflict of interest arises in this dispute due to the fact that
Dr. Boisseau took "a position in favour of the safety of these hormones" and Dr. Boobis "has been
receiving funding from the pharmaceutical industry in his research and counselling".141
67. The European Communities alleges several further errors committed by the Panel. It faults
the Panel for "relying overwhelmingly" 142 on the opinions of Drs. Boisseau and Boobis on practically
all scientific aspects of the matters; for failing to ensure that Drs. Boisseau and Boobis complied with
the self-disclosure requirement before their selection; and for failing to " actually examine[] whether
all of the experts had a potential conflict of interest and whether [Drs. Boisse au and Boobis] fulfilled
the conditions to be truly independent and impartial". 143 Finally, the European Communities argues
that, "even if one were to take the view that the Panel[] could accept the non-independent experts
provided that they would constantly bear in mind th e potential conflicts [of interest and the lack of
independence] when weighing the expert opinions, it is clear that the Panel[] refused to do so,
considering the issue of the experts finally reso lved when dismissing the European Communities'
objections."
144 Indeed, these experts "dominate[d] the en tire scientific examination by the Panel[]
both from the point of view of how often they [w ere] referred to and whether the Panel[] ever
question[ed] their opinions and whether their opinions go beyond science and stray into the area of the
risk regulator."145
68. On this basis, the European Communities submits that the Panel failed to respect the principle
of due process; failed to ensure compliance w ith the requirements on self-disclosure under the Rules
of Conduct ; erred in accepting as experts persons w hose independence and impartiality was not

139European Communities' appellant's submission, para. 205. The European Communities seeks to
draw analogy from a judgment by the European Court of Human Rights, which found that a person was denied a
fair trial because the expert appointed by the relevant tr ibunal had drafted the report triggering the trial against
that person. (Ibid., para. 206 (referring to European Court of Human Rights, Judgment of 6 May 1985, Case of
Bönisch v. Austria, Application no. 8658/79 (Exhibit EC-131 submitted by the European Communities to the
Appellate Body)))
141Ibid.
142Ibid., para. 212.
143Ibid., para. 192.
144Ibid., para. 211. (footnote omitted)
145Ibid., para. 208.

assured; and acted inconsistently with its obliga tions under Article 11 of the DSU. The European
Communities therefore requests the Appellate Body to "reverse all the findings of the Panel[] which
depend on the advice they received from" Drs. Boisseau and Boobis.146
7. Article 5.1 of the SPS Agreement
69. The European Communities argues that the Panel erred in finding that the permanent ban on
meat and meat products from cattle treated with oestradiol-17 β applied pursuant to
Directive 2003/74/EC was not based on a risk assess ment within the meaning of Article 5.1 and
Annex A, paragraph 4, of the SPS Agreement. The European Communities requests the Appellate
Body to reverse this finding for the following reasons.
70. The European Communities submits that the Pane l erred in its interpre tation and application
of Article 5.1 and Annex A, paragraph 4, of the SPS Agreement as informed by Article 5.2 of that
Agreement. The European Communities asserts th at the Panel "[a]dopted an extremely narrow and
consequently erroneous"147 interpretation of "risk assessment" wh en it excluded from the scope of its
analysis under Article 5.1 arguments and evidence concerning the misuse and abuse and difficulties of
control in the administration of hormones to ca ttle for growth-promotion purposes. The European
Communities refers to the Panel's statement that Article 5.2 of the SPS Agreement "instructs
Members on how to conduct a risk assessment" 148, and argues that the Panel erroneously rendered
Article 5.2 "entirely procedural".149 In the European Communities' view, Article 5.2 "does not
prescribe a given method or procedure to be follo wed in conducting a risk assessment", but provides
"substantive factors "150 to be taken into account in a risk assessment and offe rs guidance on the
substantive content of a "risk assessment" within the meaning of Article 5.1. Consequently, the Panel
made a "fundamental legal error" by "considerably narrowing down the scope"151 of a risk assessment
within the meaning of Article 5.1. In doing so, the Panel wrongly excluded "risk management"
aspects from the coverage of Article 5.1, and thereb y adopted the same restrictive interpretation of
"risk assessment" in Article 5.1 that was overturned by the Appellate Body in EC – Hormones.152
71. The European Communities relies on the Appellate Body's finding in EC – Hormones that
risk assessors "may examine and evaluate ... risks arising from potential abuse in the administration of

147Ibid., para. 308.
149Ibid., para. 320. (original emphasis)
150Ibid., para. 316. (original emphasis)
151Ibid., para. 320.

controlled substances and from control problems".
153 The European Commun ities maintains that the
SCVPH Opinions explicitly addressed evidence concer ning the abusive use and difficulties of control
in the administration of hormones for growth -promotion purposes, and yet the Panel "simply
ignore[d] the evidence". 154 The Panel failed to take account of the fact that the abusive use and
difficulties of control were important factors in the risk assessment underlying the SCVPH Opinions,
adding considerably to the risk identified. Inst ead, the Panel instructed the scientific experts to
examine only that part of the evidence concer ning the residues in meat from these hormones
administrated "in accordance with good veterinary practice". 155 The European Communities adds that
the fact that Codex Alimentarius Commission ("Codex") standards do not usually address the
possibility of misuse and abuse throws the Panel's a pproach into question, because the notion of risk
assessment under Article 5.1 of the SPS Agreement is clearly wider than that under Codex.
72. The European Communities also asserts that th e Panel erred in finding that the European
Communities has acted inconsistently with Article 5.1 by failing to evaluate specifically the risks
arising from residues of oestradiol-17 β in meat from cattle treated with this substance for growth-
promoting purposes. The European Communities hi ghlights the conclusion in the risk assessment
underlying Directive 2003/74/EC that new evidence concerning the genotoxicity 156 of oestradiol
suggests that oestradiol-17 β "acts as a complete carcinogen by exerting tumour initiating and
promoting effects". 157 This conclusion demonstrates that the risk assessment focused on and
addressed specifically the particular kind of risk s at stake—the carcinogenic and genotoxic potential
of the residues of oestradiol-17β found in meat treated with this hormone.
73. The European Communities maintains furthe r that the Panel erred in requiring the
quantification of the risks to human health arisi ng from the consumption of meat containing residues
of oestradiol-17β. The European Communities asserts that , by referring to "potential occurrence" 158
of adverse effects when posing questions to the ex perts, the Panel "imposed a quantitative method of

153European Communities' appellant's submission, para. 324 (referring to Appellate Body Report, EC –
Hormones, paras. 206 and 207).
154Ibid., para. 329.
155Ibid., para. 274 (referring to Question 13 posed by the Panel to the scientific experts, Panel Reports,
Annex D, p. D-22; Panel Report, US – Continued Suspension , paras. 6.102, 6.164, and 6.165; and Panel
Report, Canada – Continued Suspension, paras. 6.94, 6.154, and 6.155).
156Genotoxicity is the ability to cause damage to genetic material (DNA). Such damage may be
mutagenic and/or carcinogenic. (See Panel Report, US – Continued Suspension, footnote 370 to para. 7.77; and
Panel Report, Canada – Continued Suspension, footnote 362 to para. 7.75 (referring to replies of Dr. Boobis and
Dr. Guttenplan to Question 2 posed by the Panel to the scientific experts, Panel Reports, Annex D, paras. 41
and 58, respectively) See also tr anscript of the Panel's joint meeting with the scientific experts
on 27-28 September 2006, Panel Reports, Annex G, paras. 85-90)
157European Communities' appellant's submission, para. 337 (referring to 1999 Opinion, p. 73).
158Ibid., para. 346.

risk assessment on the European Communities bo rrowed from Codex Alimentarius and JECFA". 159
However, the Panel's rejection of a "purely qualitative analysis of risk" 160 and the imposition of such a
quantitative requirement find no basis in the SPS Agreement and contradict the Appellate Body's
finding in EC – Hormones that a risk assessment under the SPS Agreement does not require the
establishment of a minimum magnitude of risk. In addition, the experts acknowledged that
quantification of risk is not necessary for subs tances that have genotoxic potential, such as
oestradiol-17β. For this reason, the European Communities suggests that a qualitative analysis of risk
must be a fortiori sufficient to meet the requirements of Article 5.1 and Annex A, paragraph 4, of the
SPS Agreement.
74. The European Communities argues that the Pane l erred in allocating the burden of proof
under Article 5.1 of the SPS Agreement. The fact that the European Communities is the complaining
party in this dispute "does not change the basic standard on the burden of proof under the SPS
Agreement".161 Accordingly, it was incumbent upon the United States and Canada to rebut the prima
facie case of consistency made by the European Co mmunities in relation to Directive 2003/74/EC.
The European Communities submits th at, because of the particularity of the case, this obligation to
rebut the prima facie case made by the European Commun ities amounts to the same standard as
making a prima facie case in a dispute where the United States and Canada proceed with a normal
panel procedure against an SPS measure taken by the European Communities. The Panel nevertheless
found that the United States and Canada had "su fficiently refuted the [European Communities']
allegation of compliance in [their] first written submission[s] through positive evidence of breach of
the SPS Agreement "162 without articulating the rationale for this conclusion. Therefore, the Panel
erred in law in shifting the burden of proof to the European Communities without first examining,
provision by provision under the SPS Agreement , whether the arguments of the United States and
Canada had sufficient merit to shift the burden of proof back to the European Communities.
75. The European Communities furt her argues that the Panel failed to conduct an objective
assessment of the facts of the case, as required by Article 11 of the DSU. While the European
Communities agrees with the Appellate Body's interp retation of the standard of review applicable
under the SPS Agreement , it also notes that, when reviewing governmental measures in highly
complex or technical matters, domestic courts and international tribuna ls usually follow a
"reasonableness" approach to the fact-finding of competent authorities. The European Communities

160Ibid., para. 353 (referring to Panel Report, US – Continued Suspension , para. 7.530; and Panel
161Ibid., para. 287.
162Ibid., para. 288 (quoting Panel Report, US – Continued Suspension , para. 7.385; and Panel Report,
Canada – Continued Suspension, para. 7.382).

recalls that, according to the Appellate Body's in terpretation of Article 5.1, Members are entitled to
rely on "divergent opinion[s] coming from qualified and respected sources"
163 in their risk
assessments when adopting SPS measures. For this reason, a panel reviewing a Member's SPS
measure under Article 5.1 should seek to determine whether there is any reasonable scientific basis
for such measures and respect the "important and autonomous right" 164 of Members to set their level
of SPS protection. A panel should not substitute its scientific judgement for that of the Member
taking the measure and should not "second guess" 165 Members, particularly in situations where
available science is providing alternative and competing explanations. Thus, in this dispute, the Panel
should have asked whether there were divergent opi nions in the scientific community, and, if the
European Communities based itself on a divergen t opinion, if those opinions are qualified and
respected.
76. Instead of determining "whether there was any reputable support within the relevant scientific
community for the determination made by the Europ ean Communities in the light of its chosen level
of protection"166, the Panel stated that it was in a situation "similar" 167 to that of a risk assessor and
sought to determine what the correct scientific conclu sions were relating to the hormones at issue. In
doing so, the Panel "drifted into a de novo review"168 of the European Comm unities' risk assessment
and decided "to become the jury on the correct science ... by picking and choosing between the
conflicting and contradictory opinions of the experts in an arbitrary manner". 169 The Panel imposed
its choices on the European Communities between the different "scientifically plausible alternatives",
either by basing itself on the views expressed by a ma jority of the experts, or by selecting the "most
specific" or "best supported" views. 170 As a result, the Panel failed to take into account diverging
views reflecting a "genuine and legitimate scientific controversy"171 among the experts over the safety
of residues of hormones in meat. The Panel also ig nored that some of the experts reported the same
concerns as expressed in the SCVPH Opinions, "praised" 172 the analysis in those Opinions, or
highlighted that the Opinions followed a different, but equally plausible, scientific approach.
77. The European Communities alleges the following sp ecific errors in connection with its claim

163European Communities' appellant's submission, para. 226 (quoting Appellate Body Report, EC –
Hormones, para. 194). (emphasis omitted)
164Ibid., para. 222 (referring to Appellate Body Report, EC – Hormones, para. 172). (emphasis omitted)
165Ibid., para. 222.
166Ibid., para. 240.
167Ibid., para. 237 (quoting Panel Report, US – Continued Suspension , para. 7.418; and Panel Report,
Canada – Continued Suspension, para. 7.409).
168Ibid., para. 237.
169Ibid., para. 239. (emphasis omitted)
170Ibid., para. 240.
171Ibid., para. 248.
172Ibid., para. 247.

that the Panel failed to make an objective assessment of the facts. First, the European Communities
alleges that the Panel acted inconsistently with Article 11 of the DSU when it failed to take into
account evidence related to the asse ssment of risks to human health arising from exposure to residues
of hormones from multiple endogenous and exog enous sources. The European Communities
maintains that the Panel Reports explain this issue "very briefly" 173, even though it was raised several
times in the European Communities' written submissions and comments, and was discussed
extensively during the meeting of the Panel with the experts. The European Communities observes
that "there is no mention at all [of the risks of multiple exposures] in the Panel['s] findings."174
78. Secondly, the European Communities maintains that the Panel "failed to consider or
distorted"175 scientific evidence demonstrating that no safe threshold levels exist for the consumption
by humans of oestradiol-17 β due to its actual or potential genot oxicity. The European Communities
emphasizes that a majority of the experts advising th e Panel agreed that there was sufficient scientific
evidence in support of the European Comm unities' conclusion that oestradiol-17 β is actually or
potentially genotoxic. However, the Panel "side-stepped" such crucial evidence and
"mischaracteri[zed]" the evidence when finding th at the European Communities had "not provided
analysis of the potential for these [genotoxic] effect s to arise from the consumption of meat and meat
products which contain residues of oestradiol-17 β".176 The European Communities observes that to
have conclusive evidence on whether or not a thre shold can be applied "mi ght require scientific
testing on humans", which would be "totally unethical" and require a Member "to do the
impossible".177 The European Communities considers the c onclusion that no threshold levels may be
established in relation to oestradiol-17 β to be "just as valid" 178 scientifically as the opposing position
held by the United States, Canada, and JECFA. Therefore, the Panel acted inconsistently with
Article 11 of the DSU by ignoring "the totality of the evidence" 179 and by failing to recognize the
significance of the "'genuine' and 'legitimate' scientific controversy" 180 relating to the question of
whether risks to human health arising from th e consumption of residues of oestradiol-17 β could be
addressed through the establishment of threshold levels.

173European Communities' appellant's submission, para. 249 (referring to Panel Report, US – Continued
Suspension, paras. 7.502 and 7.503; and Panel Report, Canada – Continued Suspension , paras. 7.474
and 7.475).
174Ibid., para. 249.
175Ibid., para. 250.
176Ibid., para. 251 (quoting Panel Report, US – Continued Suspension , para. 7.537; and Panel Report,
Canada – Continued Suspension, para. 7.509).
177Ibid., para. 258.
178Ibid.
179Ibid.
180Ibid.

79. The European Communities argues furthermore that the Panel reached the "manifestly
unfounded"
181 finding that the European Communities had not evaluated the specific risks to humans
arising from the consumption of meat containing residues of oestradiol-17 β as a result of the cattle
being treated with this hormone for growth-promo tion purposes. In reaching this finding, the Panel
incorrectly imposed a "specifi city" or "direct causality" 182 requirement pursuant to which the
European Communities had to demonstrate actual adverse effects, rather than the possibility of
adverse effects, contrary to the Appellate Body's findings in EC – Hormones and Japan – Apples .183
In the European Communities' view, the Appellate Body's findings in these disputes did not prevent a
Member from meeting the standard in Article 5.1 by demonstrating that the identified adverse effects
may " possibl[y] arise from the residues in meat" and that "there is no need to demonstrate real
causality" as the Panel in this dispute required.184 Moreover, the European Communities notes that no
country has conducted the kind of specificity t est required by the Panel, and the European
Communities cannot be found in violation of the SPS Agreement for failing to meet such a test. In
addition, the Panel ignored the fact that three of the experts advising the Panel confirmed that the
potential for adverse effects had been demonstrated by the European Communities. On this basis, the
European Communities submits that the Panel ignor ed and "grossly misinterpreted" part of the
relevant evidence in reaching this finding and failed to explain how its conclusions "have a reasonable
relationship to the totality of the evidence". 185 As a result, the Panel exceeded the bounds of its
discretion as the trier of facts in its assessment of the evidence, in violation of Article 11 of the DSU.
80. The European Communities submits that the Pa nel failed to interpret and apply correctly
Article 5.1 of the SPS Agreement and failed to conduct an objective assessment of the matter as
required by Article 11 of the DSU. Therefore, the European Communities requests the Appellate
Body to reverse the Panel's findings under Article 5.1 of the SPS Agreement.
8. Article 5.7 of the SPS Agreement

81. The European Communities argues that the Panel erred in finding that the relevant scientific
evidence on the five hormones was not "insufficien t" within the meaning of Article 5.7 of the
SPS Agreement and that, consequently, the provisional ba n on the importation and marketing of meat

182Ibid., para. 262.
183Ibid., para. 261 (referring to Panel Report, US – Continued Suspension, paras. 7.511 and 7.512; and
Panel Report, Canada – Continued Suspension , paras. 7.483 and 7.484, in turn referring to Appellate Body
Report, EC – Hormones , para. 200; and Appellate Body Report, Japan – Apples , para. 202 and footnote 372
thereto).
184Ibid., para. 261. (original emphasis)
185Ibid., para. 270.

from cattle treated with these five hormones do es not meet the requirements of Article 5.7 . T h e
European Communities requests the Appellate Body to reverse this finding for the following reasons.
82. First, the European Communities argues that the Panel erred in its interpretation of Article 5.7
because it expressly rejected the relevance of the le vel of protection set by a Member for evaluating
whether the scientific evidence is "i nsufficient" within the meaning of Article 5.7. The European
Communities takes issue with the Panel's "sweeping statement" 186 that the "presumption of
consistency of measures conforming to international standards", provided in Article 3.2 of the SPS
Agreement, "implies that these standards ..., particularly those referred to in this case, are based on
risk assessments that meet the requirements of the SPS Agreement."187 According to the European
Communities, the presumption of consistency that applies to measures conforming to international
standards under Article 3.2 does not necessarily lead to the conclusion that the scientific evidence
underlying the international standards is sufficient to conduct a risk assessment within the meaning of
Article 5.1. This is because the international sta ndard may not be based on a risk assessment at all,
may be based on a risk assessment that is not informed by all factors listed in Articles 5.1 and 5.2, or
the relevant evidence behind the international standard may be insufficient, or outdated, or no longer
the mainstream scientific opinion.
83. The European Communities asserts that an in ternational standard already "implies or
encapsulates"188 a certain level of protection. However, Article 3.3 of the SPS Agreement allows
Members to adopt SPS measures that result in a highe r level of protection than the one underlying an
international standard. Consequently, the inte nded level of protection must be relevant for
determining whether the scientific evidence is "insuf ficient" within the meaning of Article 5.7, and a
Member that sets a higher level of protection may find the relevant scientific evidence underlying an
international standard to be insufficient. The Eu ropean Communities thus maintains that the Panel's
approach entirely disconnected the sufficiency of the scientific evidence from the level of protection
set by the European Communities, and this approach is contrary to the explicit wording of Article 3.3
and the views expressed by the experts it had select ed. Referring to the distinction drawn by the
Appellate Body in Japan – Apples between "scientific uncertainty" and "insufficiency of scientific
evidence"
189, the European Communities notes that this distinction does not exclude that the
insufficiency of the scientific evidence may be due to scientific uncertainty created by the existence of
divergent minority opinions.

187Ibid., para. 387 (quoting Panel Report, US – Continued Suspension , para. 7.644; and Panel Report,
Canada – Continued Suspension, para. 7.622).
188Ibid., para. 397.
189Ibid., paras. 377 and 378 (referring to Appellate Body Report, Japan – Apples, para. 184).

84. Secondly, the European Communities argues that the Panel erred in imposing on the
European Communities the initial burden of dem onstrating that Directive 2003/74/EC meets the
requirements of Article 5.7 in relation to the prov isional ban on the five hormones at issue. By
imposing the burden of proof on the European Communities, the Panel "seem[ed]"
190 to have
erroneously considered Article 5.7 as an exception to the rules laid down in Article 5.1, even though
Article 5.7 confers to WTO Members a "qualified right" 191 to take provisional measures under certain
conditions. The European Communiti es maintains that Article 5.7 has "its own legal regime that is
distinct from Article 5.1". 192 This is because Article 2.2 of the SPS Agreement explicitly exempts
measures taken under Article 5.7 from its scope of application, and Ar ticle 5.1, which is a specific
application of the obligations in Article 2.2, cannot be applicable under the circumstances where
Article 2.2 is not applicable. The European Communities recalls the Appellate Body's finding in
Japan – Apples that a link exists between Articles 5.7 and 5.1 in that "relevant scientific evidence"
will be "insufficient" within the meaning of Article 5.7 if the body of available scientific evidence
does not allow the performance of an adequate assessment of risks as required under Article 5.1. 193
On this basis, the European Comm unities argues that "there is a continuum of 'relevant scientific
evidence' that is divided between the respective scopes of application of Articles 5.1 and 5.7." 194
Therefore, a Member that is "su fficiently diligent ... must be able" 195 to take an SPS measure under
either Article 5.1 or Article 5.7, and the sufficien cy of the scientific evidence "is determinative on
whether or not the measure concerne d falls under Article 5.1 or 5.7". 196 Thus, the European
Communities argues that, because it has a right to im pose provisional measures when it considers that
relevant scientific evidence is insufficient, the Un ited States and Canada should bear the burden of
demonstrating that this condition for applying pr ovisional measures under Article 5.7 has not been
fulfilled. Instead, the Panel erroneously shifted this burden to the European Communities when it
limited its review exclusively to the "insufficiencies"197 identified by the European Communities in its
submissions. By requiring the European Commun ities to identify the issue for which relevant
scientific evidence is insufficient, the Panel allo cated to the European Co mmunities the burden "to
prove the negative".198

191Ibid., para. 368.
192Ibid., para. 367.
194Ibid., para. 374.
195European Communities' statement at the oral hearing.
197Ibid., para. 380 (quoting Panel Report, US – Continued Suspension , para. 7.653; and Panel Report,
Canada – Continued Suspension, para. 7.630).
198Ibid., para. 291.

85. Thirdly, the European Communities argues th at the Panel erred in finding that, where
international standards for a substance exist, a "critical mass" of new scientific evidence that calls into
question the fundamental precepts of previous knowle dge is required to render the relevant scientific
evidence "insufficient" within the meaning of Article 5.7. The European Communities asserts that the
"critical mass" standard developed by the Pa nel "imposed a high quantitative and qualitative
threshold"199 with respect to the new scien tific evidence that is required to render prior scientific
evidence insufficient. The Europ ean Communities submits that the quality of the scientific evidence
is more important that the quantity. For this reason, even a single study made by qualified and
respectable scientists, even when in the minority, could be considered a priori sufficient to question
the sufficiency of the previous sci entific evidence if its merits are particularly relevant for the
circumstances of the risk assessment. According to the European Communiti es, the Panel's mistake
stemmed from the erroneous premise of its analysis that the existence of an international standard
presupposes that the scientific eviden ce has been sufficient to conduc t a risk assessment. This error
led the Panel to assume wrongly that a "critical ma ss" of new evidence is required to question the
sufficiency of the scientific evidence and con sequently to disregard "serious concerns" 200 expressed
by the experts in relation to the "fundamental scientific controversy" 201 concerning the risks to human
health posed by the five hormones. The European Communities observes that the relevant question is
not only whether relevant scientific evidence can "become" insufficient, but also whether it "is"
insufficient in the first place. 202 Furthermore, the European Co mmunities argues that the Panel's
application of the "critical mass" standard excludes a priori the possibility of a WTO Member basing
its risk assessment on a "respectable minority view". 203 This effectively "preclude[d] [the]
application"204 of the precautionary principle in the interpre tation of Articles 5.1 and 5.7, contrary to
the Appellate Body's finding that "the precautionary principle indeed finds reflection in Article 5.7 of
the SPS Agreement."
205 The European Communities explains that the Panel's "critical mass" standard
implies that the scientific eviden ce passes immediately from a state of insufficiency to a state of
complete knowledge, because ther e will be no "transitional period" 206 in which Article 5.7 could
apply.
86. The European Communities alleges that, in a pplying the "critical mass" standard to the
evidence before it, the Panel "systematically downplay[ed]" 207 and ignored "highly relevant scientific

200Ibid., para. 421.
201Ibid., para. 426.
202Ibid., para. 419.
203Ibid., para. 409.
204Ibid., para. 427.
206European Communities' statement at the oral hearing.

evidence"
208 which "support[ed] the position of the European Communities ... that in fact the scientific
evidence was indeed insufficient" 209 to perform a risk assessment. The European Communities
challenges the Panel's analysis of the evidence on the following issues with respect to all five
hormones: (i) effects of hormones on certain populati on groups; (ii) dose response; (iii) long latency
periods for cancer and confounding factors; a nd (iv) adverse effects on human growth and
reproduction.210 In addition, the European Communities raises specific concerns relating to the
Panel's application of the "critical mass" standard when it evaluated the sufficiency of the information
individually for each of the five hormones.
87. As regards the Panel's finding that the scientific evidence on the effects of the five hormones
on certain population groups was not "insufficient" within the meaning of Article 5.7, the European
Communities argues that the Panel ignored Dr. Sippe ll's testimony that the development of more
sensitive detection methods has identified lower e ndogenous hormonal levels in pre-pubertal children
than previously thought, calling into question the range of physiological levels of sex hormones
believed to exist in humans. According to th e European Communities, the Panel downplayed the
significance of this development by referring to Dr. Boobis' statement that such new detection
methods were "not yet validated".211 In the area of dose response, the European Communities submits
that the Panel Reports contain "no serious analysis" 212 of this issue, and that the only basis articulated
by the Panel in support of its conclusion was its prior finding that the ultra-sensitive detection
methods had not yet been validated. The European Communities also suggests that the Panel ignored
Dr. Cogliano's testimony confirming that the relevant scientific evidence was insufficient to conduct a
risk assessment for all of the five hormones, b ecause "you cannot estimate that dose-response curve
with any kind of certainty."213
88. In respect of the long latency period of cancer and the existence of confounding factors, the
European Communities argues that the Panel's "cri tical mass" standard "essentially require[d] the
European Communities to do the impossible" 214, because long latency periods for cancer and the
existence of confounding factors do not permit th e establishment of a causal link between the

209Ibid., para. 427.
210In its appellant's submission, the European Comm unities also refers to the Panel's analysis
concerning bioavailability. (European Communities' appellant's submission, paras. 179 and 432) However, at
the oral hearing, the European Communities stated that this issue was not implicated in its appeal of the Panel's
findings under Article 5.7.
211European Communities' appellant's submission, para. 430 (quoting Panel Report, US – Continued
212Ibid., para. 431.
213Ibid., para. 444 (quoting transcript of the Panel' s joint meeting with the scientific experts
on 27-28 September 2006, Panel Reports, Annex G, para. 871).
214Ibid., para. 433.

prevalence of cancer and the consumption of residues of the five hormones in meat. In order to
establish such causal link, it would be necessary to conduct tests on humans by isolating them from
the rest of the population "for years if not decades", which constitutes "an unrealistic requirement".215
89. As for the evidence of adverse effects of the five hormones on human growth and
reproduction, the European Communities argues th at the Panel "systematically downplay[ed]" 216 the
opinions of Drs. Sippell and Guttenplan in reaching its finding that the relevant scientific evidence
was not "insufficient" within the meaning of Article 5.7. For the European Communities, "[t]he fact
that the new evidence relates inter alia to children, the most vulnerable and sensitive part of the
population, is a major concern for the European Comm unities" and this concern is "reinforced by the
opinions expressed by Dr. Sippell and Dr. Guttenplan". 217 The European Communities additionally
maintains that the Panel "arbitrarily" 218 gave a different status to the statements of different experts
advising the Panel. For example, whereas Dr. Guttenplan's expression of concerns regarding potential
developmental effects of hormones on children was characterized by the Panel as an expression of
"doubts"
219, the opinion of Dr. Boobis that new eviden ce obtained by the European Communities did
not indicate additional concern regarding risks of th e five hormones was "manifestly given the status
of scientific evidence".220
90. Turning to the Panel's assessment of each of the five hormones indivi dually, the European
Communities argues that the Panel ignored evidence demonstrating that progesterone and testosterone
are carcinogenic to humans. Such evidence consisted of International Agency for Research on Cancer
("IARC") studies that concluded that progesterone is "possibly carcinogenic to humans" 221 and that
testosterone is a "probable carcinogenic to humans". 222 The European Communities further submits
that the Panel confused Articles 5.1 and 5.7 when it concluded that the IARC studies addressed the
carcinogenicity of progesterone and testosterone in general, but did not specifically address the
carcinogenic potential to humans of consuming residu es of these hormones in meat. According to the
European Communities, it is preci sely because scientific evidence is lacking on this specific question
that the European Communities decided to impose pr ovisional restrictions on the basis of available
pertinent information.

216Ibid., para. 435.
217Ibid., para. 436.
218Ibid.
219Ibid. (quoting Panel Report, US – Continued Suspension , para. 7.719; and Panel Report, Canada –
Continued Suspension, para. 7.696).
220Ibid., para. 436.
221Ibid., para. 437 (referring to Panel Report, US – Continued Suspension , para. 7.737; and Panel
Report, Canada – Continued Suspension , para. 7.714, in turn referring to IARC written replies to Question 25
posed by the Panel, Panel Reports, Annex E-3, p. 129). (emphasis omitted)
222Ibid., para. 438.

91. With respect to the Panel's finding that the relevant scientific evidence on trenbolone acetate
was not "insufficient" within the meaning of Artic le 5.7, the European Co mmunities argues that the
Panel drew its conclusions exclusively on the basis of Dr. Boobis' opinion. The European
Communities draws attention to Dr. Guttenplan's opi nion that the scientific evidence showed that
trenbolone acetate was "significantly estrogenic" a nd that it did not appear that "accurate ADIs
[(acceptable daily intakes)] can be estab lished at this point" for this substance.
223 T h e P a n e l
"attempt[ed] to downplay" 224 this opinion of Dr. Guttenplan by referring to his statement that,
although accurate acceptable daily intakes ("ADIs") cannot be established, a risk assessment can still
be carried out. In the European Communities' view, the Panel failed to ascertain whether Dr.
Guttenplan merely meant that the four steps of th e JECFA risk assessment can be formally conducted
or whether a risk assessment within the meaning of Article 5.1 of the SPS Agreement can be
conducted, and that it was the latter that was relevant to the Panel's analysis.
92. As regards the Panel's finding that the relevant scientific evidence was not "insufficient" in
relation to the carcinogenicity of zeranol, the Eur opean Communities argues that the Panel failed to
take into account Dr. Guttenplan's testimony that "additional tests of zeranol should be carried out".225
The European Communities argues further that the Panel downplayed Dr. Sippell's concerns
regarding the effects of zeranol in human breast cancer cells by relying, instead, on Dr. Boobis'
opinion.
93. Moreover, the European Communities argues th at the Panel concluded "in a sweeping
manner"226 that the evidence on MGA was "sufficient" to conduct a risk assessment, because a
process towards adopting an international standard for this hormone is underway in Codex. The
European Communities also charges the Panel with downplaying the new studies the European
Communities has conducted since 1999, even though the Panel recognized that the evaluation carried
out by JECFA was based on studies that date back to the 1960s and 1970s. Furthermore, the
European Communities criticizes the Panel for disr egarding the opinion of Dr. De Brabander in
relation to trenbolone acetate, zeranol, and MGA, wh ich called into question residue levels estimated
by JECFA and raised concerns regarding the poten tial effects of these hormones and their metabolites
on the environment.
94. Finally, the European Communities asserts th at the Panel failed to make an objective

223European Communities' appellant's submission, para. 439 (quoting Panel Report, US – Continued
224Ibid., para. 440.
225Ibid., para. 441 (quoting Panel Report, US – Continued Suspension , para. 7.797; and Panel Report,
Canada – Continued Suspension, para. 7.781).
226Ibid., para. 442.

assessment of the facts in reaching its findings under Article 5.7 of the SPS Agreement, in violation
of Article 11 of the DSU. The European Commun ities underscores Dr. Cogliano's statement that "the
data are not sufficient" to conduct a "low-dose predic tion of risk at levels you might find in hormone-
treated meat" 227, and observes that this statement was not reflected in the Panel Reports. The
European Communities argues that the Panel decided to accept only those expert opinions that it
considered "acceptable", and in so doing the Pane l "arbitrarily chose between different scientific
opinions" instead of establishing whether the Euro pean Communities had "followed a scientifically
plausible alternative" when adopting Directive 2003/ 74/EC and the Panel thus "failed to recognise the
legal significance of a genuine scientific controversy". 228 Consequently, the Panel found that the
SCVPH Opinions "came to the wrong scientific conclusions" 229, and thus conducted a de novo
review of the facts, contrary to the requirement s in Article 11 of the DSU to make an objective
assessment of the facts, as reflected in the European Communities' risk assessment.
95. The European Communities submits that the Pa nel failed to interpret and apply correctly
Article 5.7 of the SPS Agreement and failed to conduct an objective assessment of the matter as
required by Article 11 of the DSU. Therefore, the European Communities requests the Appellate
Body to reverse the Panel's findings under Article 5.7 of the SPS Agreement.
B. Arguments of the United States – Appellee
1. Procedural Issue – Public Observation of the Oral Hearing
96. The United States requests that the Appellate Body allow public observation of the oral
hearing in these proceedings. The United States re fers to the experience with open hearings at the
panel stage and states that this development has b een of great benefit to the WTO and the multilateral
trading system. The United States explains that "[t]he ability of the public at large—
e.g., representatives of civil society, such as NGOs, journalists, academics, and individual citizens—to
observe dispute settlement hearings has helped foster greater confidence in the WTO dispute
settlement system and the manner in which it operates." 230 The United States also considers that the
practice of having open panel meetings with the pa rties has served to strengthen the "legitimacy and
credibility"231 of the system and that this increased conf idence in the dispute settlement process can
translate into a greater acceptance of the outcome of the dispute settlement proceeding, with potential
benefits in respect of implementation. In addition, the United States points out that the practice of

227European Communities' appellant's submission, para. 279 (quoting transcript of the Panel's joint
meeting with the scientific experts on 27-28 September 2006, Panel Reports, Annex G, para. 871).
228Ibid., para. 281.
229Ibid., para. 282.
230United States' request for an open hearing, para. 5.
231Ibid.

opening panel meetings with the parties has also be en of great benefit to the governments of many
WTO Members because "a significant number of dele gates from WTO Members that were not parties
to the dispute have taken advantage of the opportun ity to attend an open panel meeting in order to
follow a dispute more closely than they otherwise could."
232 The United States further notes that
"opening meetings allows the WTO to compare more favourably to other international fora" 233 and
refers to the practice of many international tri bunals. The United States observes that this dispute
involves questions of human health and scientific judgements and therefore "provides a particularly
strong example of public interest in WTO dispute settlement".234
97. In the United States' view, there is nothing in the DSU, the Working Procedures or the Rules
of Conduct that addresses the issue of open hearings "directly". 235 The United States does not
consider that Article 17.10 precludes open appellate hearings. The United States argues that because
there is no mention of an Appellate Body oral hearing in the DSU, "Article 17.10 cannot be directed
at the question of whether such a hearing should be open or closed." 236 The United States observes, in
this regard, that third parties that were not third participants in both appeals in US – Shrimp (Thailand)
and US – Customs Bond Directive were allowed to attend the consolidated oral hearing that was held
for those appeals. The United States adds that "[s]omething similar appears to have occurred" 237 in
the US – 1916 Act appellate proceedings. The United States submits, furthermore, that "there is
nothing in the DSU that authorizes a third party to observe any Appellate Body hearing" and that, "[i]f
Article 17.10 required that the hearing be confid ential, then the Appellate Body could not have
permitted third parties to observe the hearing."238
98. According to the United States, Article 17.10 h as not been interpreted as "literally requiring
the confidentiality of Appellate Body hearings" because Appellate Body re ports "routinely describe
events at a hearing or even include quotations from the statements or answers to questions". 239
Moreover, the United States notes that an Appellate Body report routinely discloses the arguments of
the participants and third participants in their written submissions, and Notices of Appeal and of Other
Appeal are always circulated as public WT/DS documents.
99. The United States also emphasizes that Article 17.10 must be read and applied in conjunction
with Article 18.2 of the DSU. For the United Stat es, the phrase "[n]othing in this Understanding" in

232United States' request for an open hearing, para. 6.
233Ibid., para. 7.
234Ibid., para. 13.
235Ibid., para. 15.
236Ibid., para. 17.
237Ibid., para. 19.
238Ibid., para. 20.
239Ibid., para. 21.

Article 18.2 must be read to mean "that not even Article 17.10 could interfere with a party's right to
disclose its own positions to the public, including statements made in the course of an Appellate Body
hearing".240 The United States adds that if the statements and answers to questions can be made
public by the participants, there is no reason why the parties cannot agree to have such statements and
answers made public at the time they are uttered.
100. The United States alleges that it is not aware of anything in the negotiating history of the DSU
that would suggest that parties could not agr ee to open an Appellate Body hearing to public
observation. Nor does the United States consider that the Working Procedures require an oral
hearing that is closed to the public. Fu rthermore, it does not see anything in the Rules of Conduct
that would be an impediment to opening the hear ing, because where parties agree to make their
statements in the presence of the public, "there is no confidential information to be protected and no
confidentiality of the proceedings to be maintained."241 The United States clarifies that by authorizing
the request of the participants, the Appellate Body "would not be prejudging" 242 the DSU review
negotiations.
101. In response to the comments of the third pa rticipants, the United States refers to the
Recommendations by the Prepar atory Committee for the WTO. 243 The United States asserts that the
Recommendations indicate that the Preparatory Co mmittee viewed Article 17.10 as focused on the
deliberations of the Appellate Body and any confid ential information submitted by the participants to
an appeal. The United States also argues that the third participants that oppose the request to open the
hearing fail to reconcile their understanding of the term "proceedings" with the fact that statements
made at the oral hearing and responses to questions are routinely quoted and described in Appellate
Body reports. Moreover, the United States points out that Article 18.2 refers to "statements of its own
positions", which include responses to questions pos ed at the oral hearing, and does not impose a
limitation on when the disclosure may occur. Fina lly, the United States rejects the argument that the
Appellate Body may not consider the request to open the hearing because transparency is being
discussed in the DSU review negotiations.
102. The United States therefore requests that the A ppellate Body allow public observation of the
oral hearing and discusses several modalities that could be used to accommodate any third
participants wishing to maintain the confidentiality of their submissions. The United States, however,

240United States' request for an open hearing, para. 24. (emphasis omitted)
241Ibid., para. 26.
242Ibid., para. 28.
243United States' comments on third participants' comme nts, paras. 5 and 6 (referring to Establishment
of the Appellate Body: Recommendations by the Preparatory Committee for the WTO approved by the Dispute
Settlement Body on 10 February 1995 (WT/DSB/1), para. 9).

indicates a preference for allowing public observa tion by means of closed-circuit simultaneous
broadcast.
2. Articles 23.2(a) and 21.5 of the DSU

103. The United States submits that the Panel properly found that the phrase "recourse to dispute
settlement" within the meaning of Article 23.2(a) of the DSU is not limited to an Article 21.5 panel
proceeding and that Article 23.2(a) did not require the United States to initiate a compliance panel
proceeding for purposes of examining the comp atibility of Directive 2003/74/EC with the
SPS Agreement.
104. The United States considers that the Panel's in terpretation of the phrase "recourse to dispute
settlement in accordance with [the DSU]" in Article 23.2(a) as encompassing all procedures under the
DSU, rather than relating exclusively to an Ar ticle 21.5 panel proceeding, was "sensible and well
supported"
244 by the text of the DSU. The United States observes that Article 21.5 refers to "these
dispute settlement procedures" without specifying any particular subset of the procedures provided in
the DSU, and thus does not exclude any aspect of the DSU procedures. 245 Moreover, in the United
States' view, a complaining party always retains the option to initiate an ordinary panel proceeding to
avoid the limitations on the scope of measures and claims that may be brought in an Article 21.5
proceeding. Therefore, the United States argues, Article 21.5 provides no contextual support for the
European Communities' assertion that the phrase "rules and procedures of [the DSU]" in
Article 23.2(a) refers exclusively to a panel operating under the jurisdictional limitations and
accelerated timeframes provided for in Article 21.5. The United States contends that, unless the
European Communities is suggesting that it would refu se to participate in any proceeding other than a
compliance panel proceeding initiated by the Un ited States to examine the consistency of
Directive 2003/74/EC with the SPS Agreement , there is no reason to assume that an Article 21.5
proceeding is the only means by which the United States and the European Communities could reach
a resolution of this dispute.
105. The United States disagrees with the European Co mmunities' interpretation of the term "shall
be decided" in Article 21.5 as indicating that "fin al" resolution results only from a panel proceeding.
If that were the case, this dispute would have been finally resolved in 1998 with the adoption of the
DSB's recommendations and rulings in EC – Hormones. The United States argues that the term "shall
be decided" should not be read in such a restrictiv e way, because the goal of the DSU is to secure a
positive resolution, and a mutually acceptable soluti on is preferable for achieving this goal. The

245See ibid., para. 127.

United States also disagrees with the European Communities' contention that the term "shall be
decided" in Article 21.5 requires a decision by an adjudicative body. Rather , the use of the passive
tense leaves open the question by whom a disagre ement under Article 21.5 should be decided, and
may include the parties, a regular panel, an arbitrator, or a mediator or other facilitator.
106. The United States submits that the European Communities' "frustrated experience as an
original responding party"246 initiating an Article 21.5 proceeding in EC – Bananas III (Article 21.5 –
EC) does not lead to the conclusion that such an a pproach is disallowed by the DSU. The United
States argues that the European Communities "cannot have it both ways": insisting, in EC –
Bananas III (Article 21.5 – EC), upon the right to initiate an Article 21.5 proceeding when it "thought
that avenue would be to its adva ntage", and now arguing that an original respondent is foreclosed
from initiating an Article 21.5 proceeding. 247 Moreover, the United States rejects the European
Communities' claim that the fact that the panel report in EC – Bananas III (Article 21.5 – EC) was
not adopted signifies certain "subsequent practice" 248, noting that it was the European Communities
itself that did not seek adoption of that report.249
107. For these reasons, the United States requests the Appellate Body to reject the European
Communities' claim that Article 23.2(a) of the DSU required the United States to initiate an
Article 21.5 panel proceeding for purposes of examining the WTO-consistency of
Directive 2003/74/EC. The United States neverthele ss observes that the Appellate Body need not
address the European Communities' claims in this re gard if it reverses the Panel's findings that the
United States has acted inconsistently with Articles 23.1 and 23.2(a) of the DSU, as requested by the
United States in its other appeal.250
3. Article 22.8 of the DSU
108. The United States maintains that the Panel corr ectly interpreted Article 22.8 of the DSU in
finding that it requires not just the pro forma removal of the measure found to be inconsistent, but
the achievement of actual compliance with the DSB's recommendations and rulings, before the
application of the suspension of concessions must be terminated.
109. The United States alleges that, in replacing Directive 96/22/EC with Directive 2003/74/EC,

247Ibid.
248Ibid., para. 115 (quoting Article 31(3)(b) of the Vienna Convention on the Law of Treaties (the
"Vienna Convention").
249Ibid., para. 135.
250Ibid., para. 125 (referring to United States' other appellant's submission, sections II and III). See also
infra, paras. 188-194.

the European Communities simply switched the legal instruments unde rlying the import ban and, in
so doing, failed to remove the inconsistent measure within the meaning of Article 22.8. The United
States contends that the phrase "until such time as the measure found to be inconsistent with a covered
agreement has been removed" in Article 22.8 requir es the elimination of the WTO-inconsistency, that
is, actual compliance. The United States notes that the ordinary meaning of "removed" is "lifted,
taken away".
251 The United States explains that it is di fficult to see how a WTO-inconsistent measure
can be said to be taken away if an equivalent m easure is put in its place. The United States further
argues that the context provided by other provisions of the DSU—namely, Articles 21.1, 21.5, 22.1,
and 22.2—confirm that it is actual compliance that is required by Article 22.8. These provisions
indicate that the drafters of the DSU "contempl ated that suspension of concessions and 'full
implementation' were alte rnatives to one another".
252 The United States adds that interpreting
Article 22.8 as requiring actual compliance is also supported by the purpose of the suspension of
concessions, which is to induce compliance.
110. The United States rejects the European Communities' contention that Articles 21 and 22 of
the DSU establish a "basic dichotomy" between "t he measure found to be inconsistent" and the
"measures taken to comply", arguing that the Eur opean Communities draws an "artificial distinction"
between the "removal of a measure" and "existence or consistency" of a measure taken to comply. 253
The United States draws attention to Article 3.7 of the DSU as reflecting the object and purpose of the
DSU. Article 3.7 provides that "the first objectiv e of the dispute settlement mechanism is usually to
secure the withdrawal of the measures concerned" , which the United States understands as referring
"not to ... a mere repeal of a measure that is replaced by another, but ... instead to an actual
elimination of the measure that brings about compliance". 254 According to the United States, the
removal of an inconsistent measure, accompanied by the taking of a measure that undermines such
removal, results in the absence of a measure taken to comply.
111. Moreover, the United States disagrees with the European Communities' contention that
Article 22.8 requires the suspension of concessi ons to be terminated "in the presence of an
implementation [measure]" that has not yet been f ound to be WTO-inconsistent through Article 21.5

251United States' appellee's submission, para. 102 (quoting The New Shorter Oxford English Dictionary,
4th edn, L. Brown (ed.) (Clarendon Press, 1993), Vol. 2, p. 2543).
252Ibid., para. 103. (emphasis omitted)
253Ibid., para. 104 (quoting European Communities' appellant's submission, paras. 136-142).
254Ibid., para. 106. (emphasis omitted)

proceedings.255 The United States submits that this contention is not supported by Article 22.8, which
does not state that the suspension of concessions sh all only be applied "until the measure found to be
inconsistent is claimed to have been removed". 256 The United States also rejects the European
Communities' argument that the Panel, in find ing that Directive 96/22/EC was replaced by
Directive 2003/74/EC, failed to consider that Dir ective 96/22/EC ceased to exist upon the adoption of
Directive 2003/74/EC, and that the latter contains changes to the justification for the import
restrictions imposed by the former. According to the United States, the Panel's approach was
consistent with the Appellate Body's treatment in EC – Hormones of Directive 96/22/EC as a
substitute for the previous Directives that ha d "ceased to exist" when they were replaced by
Directive 96/22/EC, despite changes made by that Di rective to the import restrictions imposed by the
previous Directives.257
112. Furthermore, the United States alleges that th e European Communities' logic, according to
which an original complainant must terminat e its suspension of concessions and initiate an
Article 21.5 proceeding when an original respondent claims compliance, will lead to "a strange and
absurd result".258 If the Article 21.5 panel concludes that compliance has not been achieved, there is
neither a renewed reasonable period of time nor anot her opportunity to request authorization for the
suspension of concessions.
113. On this basis, the United States requests th e Appellate Body to reject the European
Communities' appeal of the Panel's findings that Ar ticle 22.8 of the DSU requires the achievement of
actual compliance with the DSB's recommendations and rulings before the application of the
suspension of concessions must be terminated.
4. The Panel's Terms of Reference
114. The United States disagrees with the European Communities' claim that the Panel exceeded
its terms of reference by assuming the powers of an Article 21.5 panel.
115. The United States observes that, pursuant to Article 7.1 of the DSU, a panel's standard terms
of reference cover the matter referred to in the re quest for the establishment of a panel. The United

255United States' appellee's submission, para. 114 (re ferring to European Communities' appellant's
submission, para. 98). As regards the European Commun ities' argument that it had suspended retaliatory action
during the Article 21.5 proceedings in US – FSC , the United States contends that the European Communities
continues to suspend concessions in US – Offset Act (Byrd Amendment) without initiating an Article 21.5
proceeding, even though the United States has notified the DSB of the repeal of the Continued Dumping and
Subsidy Offset Act of 2000. (Ibid.)
256Ibid., para. 115. (original emphasis)
257Ibid., para. 111.
258Ibid., para. 117.

States notes that, in its panel request, the Europ ean Communities specifically asked the Panel to
consider its complaint with a view to finding that the United States had acted inconsistently with
Article 22.8 of the DSU. Article 22.8 thus fell with in the Panel's terms of reference, and the Panel
was free to develop its own legal reasoning when addressing the claims raised by the European
Communities under Article 22.8.
116. For the United States, the Panel's finding th at the European Communities' claims under
Article 22.8 were premised on the actual co mpliance of Directive 2003/74/EC with the
SPS Agreement was based on a correct interpretation of Article 22.8 and was supported by the text,
context, and object and purpose of the DSU. Furt hermore, the United States rejects the European
Communities' reference to the panel report in EC – Sardines as "inapposite", noting that, unlike in
this dispute, following the order of analysis requested by the complainant in th at dispute did not lead
to an error of law.
 259
117. Accordingly, the United States requests the Appellate Body to reject the European
Communities' assertion that the Panel exceeded its term s of reference under Articles 7 and 21.5 of the
DSU by examining the compatibility of Directive 2003/74/EC with the SPS Agreement. The United
States maintains that the Panel in fact limited its terms of reference improperly on the basis of the
manner in which the European Communities presented its claims.260
5. The Panel's Suggestion for Implementation
118. The United States asserts that the Appellate B ody should decline the European Communities'
request to improve the Panel's suggestion for impl ementation. The United States disagrees with the
European Communities' contention that "the Panel's suggestions require that the United States remove
the suspension of concessions, and initiate and conclude an Article 21.5 compliance panel
proceeding."261 The United States underscores that, on the contrary, the Panel declined to suggest that
the United States discontinue its suspension of conc essions despite its finding that the United States
has committed procedural violations under Articles 23 .2(a) and 23.1 of the DSU. The United States
considers that a suggestion on im plementation is "inappropriate"262, because it is for a WTO Member
to decide on the steps needed to bring itself into conformity. In addition, the United States argues that
the Appellate Body should reject the European Communities' request to improve the Panel's
suggestion, because improvement of panels' suggesti ons is not within the Appellate Body's mandate,

259United States' appellee's submission, para. 122 (re ferring to European Communities' appellant's
submission, para. 68, in turn referring to Panel Report, EC – Sardines, paras. 7.17 and 7.18).
260See also infra, para. 196.
261United States' appellee's submission, para. 136. (footnote omitted)
262Ibid., para. 139.

which is circumscribed by Articles 17.6 and 17.13 of the DSU. The United States observes that, in
any event, the Appellate Body would not need to a ddress this issue if it were to reverse the Panel's
findings of procedural violations under Articles 23. 1 and 23.2(a), as requested by the United States in
its other appeal.
6. The Panel's Selection of Experts
119. The United States argues that the European Co mmunities is "[r]ecycling yet another of its
failed challenges from its appeal in EC – Hormones"263 by objecting to the expert selection process in
its appeal. The United States explains that, in EC – Hormones , the Appellate Body found no fault
with the panel because it had consulted with the parties regarding the selection of experts. The United
States describes the steps taken by the Panel in this case to consult with the parties on expert selection,
and concludes that the Panel's conduct in the select ion of experts was transparent and consultative,
providing the parties with notice and opportunities to respond, express their concerns, and be heard
before the Panel made its decisions. Moreover, th e United States asserts that the Panel "obtain[ed]
self-disclosure information from all of the experts, including from Dr. Boisseau".264
120. Noting the assertion by the European Communities th at the relevant legal test was "likelihood
or justifiable doubts" as to an expert's independenc e or impartiality, the United States argues that
"[t]he fact of the matter is that the Panel and th e parties were provided with full disclosure of the
experts' professional affiliations and financial interests" and "[t]he record demonstrates that the Panel
took the [European Communities'] concerns into account in concluding that the two experts in
question were not disqualified from serving."265
121. The United States alleges that the European Communities provides no support for the claims
regarding due process rights, arguing that the Eu ropean Communities cited nothing more "than the
most general statement" by the Appellate Body in Thailand – H-Beams and a judgment by the
European Court of Human Rights that the European Communities "recycled from its challenge to the
panel's expert selection process in EC – Hormones ".266 In the United States' view, neither of
those citations supports the European Communities' claim. Finally, to th e extent the European
Communities alleges a breach of Article 11 of the DSU, the United States argues that the Panel acted
within the proper bounds of its discretion as fact-finder.
122. Consequently, the United States requests th e Appellate Body to reject the European

264Ibid., para. 86. (footnote omitted)
265Ibid., paras. 87 and 88.
266Ibid., para. 89.

Communities' claim that the Panel acted inconsis tently with the principle of due process, the
requirements in the Rules of Conduct , and its duties under Article 11 of the DSU, in selecting
Drs. Boisseau and Boobis, and to reject the request to reverse the Panel's findings that relied on the
advice of these two experts.
7. Article 5.1 of the SPS Agreement

123. The United States argues that the Panel was correct in finding that the European
Communities' permanent ban on meat and meat pr oducts from cattle treated with oestradiol-17 β for
growth-promoting purposes was not based on a risk asse ssment within the meaning of Article 5.1 of
the SPS Agreement. The United States requests the Appellate Body to dismiss the European
Communities' appeal for the following reasons.
124. The United States rejects the European Comm unities' argument that the Panel erred by
excluding, on an a priori basis, the European Co mmunities' evidence regarding misuse and abuse in
the administration of oestradiol-17 β. The United States considers that the "core" 267 of the European
Communities' argument is that, because misuse and abuse in the administration of oestradiol-17 β
might occur one day, the European Communities is justified in banning oestradiol-17 β entirely.
Contrary to the European Communities' argument, the Panel "fully appreciated" 268 the significance of
the European Communities' asserti on that misuse and abuse in the administration of oestradiol-17 β
can add to the risks identified in relation to this s ubstance. However, the Panel correctly considered
that additional risks arising from misuse and abuse w ould only be relevant for its analysis if the
European Communities had succeeded in demonstr ating that a specific risk arose from the
consumption by humans of residues of oestradiol-17 β in meat. Hence, the United States asserts that,
consistent with the Appellate Body's findings in EC – Hormones, the Panel did not a priori exclude
misuse and abuse from the scope of application of Articles 5.1 and 5.2 of the SPS Agreement .
Rather, the Panel acknowledged the fact that the Eu ropean Communities had taken those factors into
account, recognized that such factors were not rele vant to the initial inquiry regarding whether a
specific risk had been identified, and provided a detailed account of its reasoning.
125. The United States maintains further that the Panel correctly held that the European
Communities had not evaluated specifically the risks arising from the consumption of meat and meat
products containing residues of oestradiol-17 β as a result of cattle being treated with hormones for
growth-promotion purposes. The Panel's examinat ion of whether the European Communities had
demonstrated the potential for adverse effects arising specifically from the presence of hormone

268Ibid., para. 54 (referring to European Communities' appellant's submission, paras. 319 and 331).

residues in meat was based on a "careful tracing" 269 of the Appellate Body's interpretation of a "risk
assessment" under Article 5.1, as defined by Annex A, paragraph 4, to the SPS Agreement . The
United States rejects the European Communities' assertion that the Panel's articulation of the
"specificity" test would require the demonstration of actual effects in humans. Rather, it is possible to
perform tests on laboratory animals and extrapolat e the results to human beings, and the European
Communities recognizes that other countries have found ways to evaluate the possibility of adverse
effects arising from the consumption by humans of ho rmone residues in meat by performing tests on
laboratory animals. The United States also contends that "one expert's statement, divorced from the
rest of the evidentiary record" is not sufficient to demonstrate that the European Communities has
evaluated the specific risk arising from residues of oestradiol-17 β in meat.270 Instead, the evidentiary
record supported the Panel's conclusion that the European Communities had identified only "general
risks"271 and had failed to address the specific risk as required by the SPS Agreement , that is, the
"possibility that these adverse effect s come into being, originate, or result from the consumption of
meat or meat products which contain veterinary residues of oestradiol-17 β as a result of the cattle
being treated with the hormone for growth promotion purposes." 272 The Panel's finding that the
European Communities had failed to show the specifi city required of a risk assessment resulted from
an analytical process that was appropriately grounde d in the precepts of scientific inquiry and prior
Appellate Body reports.
126. In addition, the United States refutes the Eur opean Communities' argument that the Panel
required the quantification of risks by focusing its inquiry on whether the European Communities had
demonstrated the "potential occurrence of these adverse effects". 273 According to the United States,
the Panel did not preclude that a qualitative risk assessment could be sufficient for purposes of
Article 5.1. Instead, the Panel's reference to "pot ential occurrence" of risks focused on whether the
European Communities' risk assessment was "s ufficiently specific to the case at hand". 274 The United
States asserts that the Panel's finding that the European Communities' risk assessment did not have the
required specificity is a finding of fact, which the European Communities cannot succeed in

270Ibid., para. 60 (referring to European Communities' appellant's submission, para. 342, in turn
referring to reply of Dr. Guttenplan to Question 13 posed by the Panel to the scientific experts, Panel Report,
US – Continued Suspension, para. 7.523, and Panel Report, Canada – Continued Suspension, para. 7.495).
271Ibid., para. 61.
272Ibid., para. 65 (quoting European Communities' appellant's submission, para. 344, in turn quoting
Panel Report, US – Continued Suspension , para. 7.537 (emphasis added by the European Communities
omitted)).

disturbing on the basis of its allegation that th e Panel imposed some kind of "'quantification'
requirement".
275
127. The United States argues furthermore that the Panel did not err in allocating the burden of
proof under Article 5.1 of the SPS Agreement. The Panel properly noted that "one of the
particularities of this case" 276 was that the European Communities' claim under Article 22.8 of the
DSU was premised on the assertion by the European Communities that it had brought itself into
conformity with the SPS Agreement through Directive 2003/74/EC. For this reason, and taking into
account the European Communities' concern that it s hould not be required to "prove a negative", the
Panel was justified in allocating to the Eur opean Communities the burden of establishing a prima
facie case of conformity with the SPS Agreement, including Article 5.1 of that Agreement. Once the
Panel found that the European Communities had established such a prima facie case, the burden of
proof shifted to the United States. The Panel then rightly found that the United States had rebutted the
European Communities' prima facie case of consistency through pos itive evidence of breach of the
SPS Agreement . The United States agrees with the Panel's finding that, consistent with the
"particularities"277 of the European Communities' claim under Article 22.8, "the burden shifted back
and forth between the parties and eventually 'neutr alized' each other since each party also submitted
evidence in support of its allegations." 278 The United States further agrees with the Panel's approach
that it would "weigh all the evidence before it" 279 in considering whether an allegation had been
proven. In so doing, the Panel did not state or consider that it had placed the burden of proof on the
European Communities.
128. The United States argues that the Panel did not fail to conduct an objective assessment of the
matter, as required by Article 11 of the DSU, in reaching its finding that the European Communities'
permanent ban on oestradiol-17 β was not based on a risk assessment within the meaning of
Article 5.1. According to the United St ates, the more deferential "reasonableness"280 standard that the
European Communities posits should apply to "me asures adopted by governments or specialised
agencies in highly complex or technical matters"281 finds no support in the text of the SPS Agreement.
This Agreement "does not prescribe a particular st andard of review or in clude specific provisions
addressing the review by a panel of a determin ation or examination conducted by a national

277Ibid., para. 94.
278Ibid. (referring to Panel Report, US – Continued Suspension, para. 7.386).
279Ibid. (quoting Panel Report, US – Continued Suspension, para. 7.386). (emphasis omitted)

authority".282 Moreover, the United States recalls that the Appellate Body rejected the European
Communities' attempt to introduce a "def erential 'reasonableness' standard" in EC – Hormones ,
finding that "[t]o adopt a standard of review not clearly rooted in the text of the SPS Agreement
itself, may well amount to changing that finely drawn balance" between the jurisdictional
competences conceded by WTO Members and the ju risdictional competences retained by Members
for themselves.283
129. The United States additionally rejects the Europ ean Communities' argument that panels must
apply the "generally appli cable standard of review" 284 differently, depending upon the specific
provision of the SPS Agreement that is being applied to the facts. The United States recalls the
standard of review proposed by the European Communities for a claim arising under Article 5.1 of the
SPS Agreement, according to which a panel must defer to a Member's risk assessment "if the evidence
before the panel provides for at least one scientific ally plausible set of conclusions under which an
adverse effect might occur." 285 In the United States' view, the European Communities' formulation
has no support in the covered agreements and "confla tes the concept of 'standard of review' and the
application of law to facts". 286 On this basis, the United States submits that the standards of review
proposed by the European Commun ities "are products of [its own] wishful thinking and find no
support in the DSU, the SPS Agreement, or the findings of the Appellate Body".287
130. The United States observes that the Appellate Body has consistently held that the standard of
review to be applied by panels to their fact-finding in SPS disputes is "neither de novo review, as
such, nor 'total deference', but rather the 'objective assessment of the facts'". 288 The United States
emphasizes that a panel will be regarded as having failed to make an objec tive assessment where it
"deliberately disregards", "refuses to consider", or "wilfully distorts or misrepresents" evidence
submitted to it.289 This requires "more than just an error of judgement in the appreciation of evidence,
but rather an 'egregious error that calls into question the good faith of a panel'". 290 Moreover, panels
"enjoy a 'margin of discretion' as triers of fact" and are "not required to accord to factual evidence of

282United States' appellee's submission, para. 34 (referring to Appellate Body Report, EC – Hormones,
paras. 114-116).
284Ibid., para. 38.
286Ibid., para. 39.
287Ibid., para. 39.

the parties the same meaning and weight as do the pa rties", and may properly "determine that certain
elements of evidence should be accorded more weight than other elements".
291
131. The United States rejects the European Commun ities' contention that the Panel exceeded the
bounds of its discretion under Article 11 of the DSU in its appreciation of the evidence. The Panel's
statement that "its situation [was] similar" 292 to that of a risk assessor does not support the European
Communities' allegation that the Panel impermissibly conducted a de novo review. Rather, the Panel
considered itself to be in a situation "similar" to th at of a risk assessor insofar as it would benefit from
hearing a full spectrum of scientific experts to obtain a complete picture of both mainstream and
divergent scientific views.293 The United States also dismisses th e European Communities' allegation
that the Panel exceeded the bounds of its discretion in choosing to rely on the views expressed by the
"majority of experts", or on the "most specific" or "best supported" view. 294 The United States asserts
that the Panel's exercise of judgement in evaluati ng the evidence was "part and parcel of the Panel's
duty to make an objective assessment of the facts".295 Moreover, the Panel could not have realistically
referred to all statements made by the experts advi sing it and should have had a substantial margin of
discretion as to which statements to refer to exp licitly. The United States submits that the Panel's
findings in relation to: (i) exposure to hormones from multiple sources; (ii) the genotoxicity of
oestradiol-17β; (iii) the specificity of the risk assessment; and (iv) the role of misuse and abuse of
hormones as factors in a risk assessment were all w ithin the bounds of its discretion as the trier of
facts and should therefore be upheld by the Appellate Body.
132. The United States additionally contends that the European Communities' challenges raised
under Article 11 of the DSU to the Panel's fact-findi ng appear to be claims that the Panel breached
Article 12.7 of the DSU by failing to set out the findings of fact, the applicability of relevant
provisions, and the basic rationale underlying its findings. However, no such claim of error under
Article 12.7 has been made by the European Commun ities on appeal. For this reason, to the extent
that the European Communities' ch allenges raised under Article 11 shoul d properly have been raised
under Article 12.7 instead, those claims should be disregarded as not properly subject to review by the
Appellate Body.

291United States' appellee's submission, para. 42 (quoting Appellate Body Report, Japan – Apples ,
para. 221, in turn quoting Appellate Body Report, EC – Asbestos , para. 161, and Appellate Body Report,
Australia – Salmon, para. 267).
293Ibid., para. 44.
294Panel Report, US – Continued Suspension , para. 7.420; Panel Report, Canada – Continued
Suspension, para. 7.411.

133. The United States concludes that the Panel did not err in finding that Directive 2003/74/EC is
inconsistent with Article 5.1 of the SPS Agreement , and requests the Appellate Body to reject the
European Communities' appeal concerning the Panel's findings.
8. Article 5.7 of the SPS Agreement
134. The United States argues that the Panel correctly found that the relevant scientific evidence
on the five hormones subject to the provisional ban was not "insufficient" within the meaning of
Article 5.7 of the SPS Agreement. The United States requests the A ppellate Body to dismiss this
ground of the European Communities' appeal for the following reasons.
135. The United States argues that the Panel correctly interpreted Article 5.7, taking account of the
context provided by Articles 3.2 and 3.3 of the SPS Agreement . The United States recalls that,
pursuant to Article 3.2, a measure conforming to an international standard shall be deemed to be
consistent with the relevant provisions of the SPS Agreement . Thus, the Panel was justified in
finding that the existence of international standa rds demonstrated that there had been sufficient
scientific evidence to conduct a risk assessment within the meaning of Article 5.1. Indeed, it would
not make sense that the SPS Agreement would require a measure conforming to an international
standard to be deemed consistent with Article 5.1 if the international standard was not based on a
proper risk assessment. In any event, the Un ited States charges the European Communities with
failing to take into account that, " in this case, the international standards for the hormones in question
are unquestionably supported by proper risk assessments."296
136. The United States contends furthermore that th e European Communities' desired level of SPS
protection was irrelevant for the Panel's determ ination of whether the scientific evidence was
"insufficient" within the meaning of Article 5.7. First, the United States submits that the European
Communities had failed to show that its appropriate level of protecti on is different from the level of
protection that the Codex standards are designed to achieve. Secondly, the United States notes that a
risk assessment is a scientific process aimed at iden tifying whether a risk exists, and risk assessors
"need not have any particular level of prot ection in mind in conducting the risk assessment". 297
Therefore, the question of whether the relevant scientific evidence is "insufficient" within the meaning
of Article 5.7 is a matter entirely separate "fro m the 'appropriate level of [SPS] protection'" 298 that a
Member chooses to set. In addition, the Un ited States considers rema rkable the European
Communities' statement that "[s]cience is essentiall y about measuring past fact and hypothesizing

296United States' appellee's submission, para. 70. (original emphasis)
297Ibid., para. 72.
298Ibid., para. 73.

about the future, including postulating about future risk."
299 The United States argues that this
statement reveals the European Communities' "fundamental misunderstanding of science", because
the scientific method is about "rigorously testin g a hypothesis using experimentation rather than
'measuring past fact' or 'hypothesizing about the future'".300
137. The United States maintains that the Panel did not err in finding that a "critical mass of new
evidence" is required to render previously suffici ent scientific evidence "ins ufficient" within the
meaning of Article 5.7. The United States obser ves that the Panel did not impose a quantitative
requirement by referring to the "critical mass" of ne w evidence. Instead, the Pa nel used this term to
indicate "a situation where evidence becomes so qua ntitatively and qualitatively sufficient to call into
question the fundamental precepts of previous kno wledge and evidence", such that new scientific
information is "at the origin of a change in the understanding of a scientific issue". 301 The United
States points out that the five hormones subject to the provisional ban had been studied intensively for
decades and the international standards for four of them had existed for over 20 years. The United
States additionally recalls that, in EC – Hormones , the European Communities argued that the
scientific evidence concerning the same five hormones had been "sufficient to justify its legislation
and [it] [had] not need[ed] to rely on the exception provided for in Article 5.7 concerning cases where
relevant scientific evidence was insufficient." 302 Under these circumstances, it was "appropriate" for
the Panel to focus on the question of "w hether relevant scientific evidence had become
insufficient".303 The United States adds that there w as "plentiful" evidence in the record
demonstrating that the relevant sci entific evidence "[was] and remains sufficient" to conduct a risk
assessment for the five hormones.304
138. The United States asserts that the Panel correctly allocated the burden of proof in its analysis
under Article 5.7. As it argu es in respect of Article 5.1 305, the United States submits that the Panel
properly noted that "one of the particularities of this case" 306 was that the Euro pean Communities'
claim under Article 22.8 of the DSU was premised on an assertion by the European Communities that
it had brought itself into conformity with the SPS Agreement through the adoption of
Directive 2003/74/EC. For this re ason, and taking into account the European Communities' concern
that it should not be required to "prove a negativ e", the Panel was justified in allocating on the

299United States' appellee's submission, para. 74 (quoting European Communities' appellant's
submission, para. 398).
300Ibid., para. 74.
303Ibid. (original emphasis)
304Ibid., para. 81.
305See supra, para. 127.
306United States' appellee's submission, para. 93 (quoting Panel Report, US – Continued Suspension ,

European Communities the burden of establishing a prima facie case of conformity with the SPS
Agreement, including with Article 5.7 of that Agreement. The United States agrees with the Panel
that "the burden shifted back a nd forth between the parties and ev entually 'neutralized' each other
since each party also submitted evid ence in support of its allegations." 307 The United States further
agrees with the Panel's approach that it would "weigh all the evidence before it" 308 in considering
whether an allegation had been proved. Furthermor e, the United States observes that "the Panel did
not state or consider that it had placed the burden of proof on the [European Communities]." 309 Thus,
the United States dismisses as "speculation" 310 the European Communities' assertion that the Panel
treated Article 5.7 as an exception to Article 5.1.
139. Finally, the United States argues that the Panel did not fail to conduct an objective assessment
of the facts as required by Article 11 of the DSU in reaching its findings under Article 5.7 of the SPS
Agreement. As noted earlier311, the United States argues that the "reasonableness approach"312 that the
European Communities posits should apply to "me asures adopted by governments or specialised
agencies in highly complex or technical matters" 313 has no support in the text of the SPS Agreement.
Moreover, the United States submits that the Panel did not conduct a de novo review and, instead,
acted within the bounds of its discretion by attri buting to the different pieces of evidence a different
weight and significance than that attr ibuted by the European Communities. 314 As regards certain
statements by the experts concerning the "sufficiency" of the relevant scientific evidence on which the
European Communities relies, the Un ited States asserts that these statements "were all made at the
conclusion of the Panel's meeting with the experts when the experts were given the opportunity to
make general, conc luding remarks on the previous two days". 315 According to the United States, the
experts were not instructed to limit their remarks to certain hormones and, in fact, the statements of
the experts quoted by the European Commun ities either explicitly addressed oestradiol-17 β or did not
specify to which of the hormones the experts' statements made reference. 316 The United States
reiterates that "there was plentiful evidence in the record demonstrating that the relevant scientific

307United States' appellee's submission, para. 94 (referring to Panel Report, US – Continued Suspension,
para. 7.386).
308Ibid. (quoting Panel Report, US – Continued Suspension , para. 7.386; and Panel Report, Canada –
309Ibid., para. 96.
310Ibid.
311See supra, para. 128.
312United States' appellee's submission, para. 37 (r eferring to European Communities' appellant's
submission, para. 223).
313Ibid. (quoting European Communities' appellant's submission, para. 223).
314See supra, paras. 130 and 131.
316Ibid. (referring to statements by Drs. Sippell, Guttenplan, Cogliano, and Boisseau, quoted in
European Communities' appellant's submission, paras. 422, 423, 424, and 425, respectively).

evidence"
317 remains sufficient to conduct a risk ass essment for these five hormones, including
statements by the experts acknowledging that the data were sufficient to conduct risk assessments for
the five hormones subject to the provisional ban. Thus, the United States concludes that the Panel's
consideration of whether there was a "'critical mass of new evidence' was proper and well-
supported".
318 Finally, the United States maintains that , to the extent the European Communities'
challenges raised under Article 11 of the DSU "shoul d properly have been raised under [Article 12.7
of the DSU] instead, those claims should be disr egarded as not properly subject to review by the
Appellate Body."319
140. The United States concludes that the Panel did not err in finding that Directive 2003/74/EC is
inconsistent with Article 5.7 of the SPS Agreement , and requests the Appellate Body to reject the
European Communities' appeal concerning the Panel's findings.
C. Arguments of Canada – Appellee
1. Procedural Issue – Public Observation of the Oral Hearing
141. Canada requests that the Appellate Body open the hearing in these proceedings to public
observation. Canada observes that, if "[r]ead out of context", the first sentence of Article 17.10 "may
appear to require closed oral h earings before the Appellate Body". 320 However, Canada argues that
when the key terms of the sentence—"proceedings" and "confidential"—are pr operly interpreted in
accordance with the customary rules of treaty interpretation, in the context of the entire DSU and, in
particular, Article 17 itself, it can be seen that th e sentence does not, and was not intended to, operate
as a bar to open hearings.
142. In Canada's submission, the term "proceedi ngs" in Article 17.10 "encompasses the entire
appellate process". 321 As regards the term "confidential", Ca nada states that an examination of the
context of Article 17.10 and the practice of WTO di spute settlement demonstrates that this provision
does not require that the entire appellate process must remain strictly secret and out of the public's
knowledge. Canada adds that if Ar ticle 17.10 required absolute confidentiality, then all of the steps
within an appeal would have to remain out of the public knowledge, including the initial Notice of
Appeal and the final Appellate Body report. However, both of these documents are made public upon

317United States' appellee's submission, para. 81 (referring to comments by the United States on the
replies of the scientific experts, Codex, JECFA, and IARC to questions posed by the Panel, Panel Reports,
Annex F, paras. 47 and 48).
318Ibid., para. 82.
319Ibid., para. 49.
320Canada's request for an open hearing, para. 4.
321Ibid., para. 5.

circulation. Moreover, Appellate Body reports, which are made public, include summaries of the
participants' written submissions and refer to the participants' arguments made during the oral hearing.
Canada thus concludes that many aspects of the A ppellate Body's proceedings during the "substantive
portion"322 of the appellate process are actually revealed to the public and are not subject to
confidentiality under Article 17.10.
143. Canada also draws attention to Article 18.2 of th e DSU, which "permits parties to reveal their
positions to the public".323 Canada asserts that, "[a]s was recognized by the Panel, all three parties, by
making a unanimous request for a public oral heari ng in these two parallel appeals, are relying on
their right, stated in ... Article 18.2, to make their oral arguments public." 324 Canada adds that
Article 18.2 does not prescribe a specific means of making a party's arguments public and,
consequently, it does not matter whether such ri ght is exercised after the oral hearing or
contemporaneously with the oral hearing.
144. Canada submits that the Rules of Conduct "do not present an obstacle"
325 to the Appellate
Body holding open hearings. Furthermore, Cana da considers that, under Rule 16(1) of the Working
Procedures, "[t]he Appellate Body has discretion ... to respond favourably to the unanimous request
by all three parties to the appeal in this case and to open the oral hearing to the public."326
145. Canada additionally asserts that open hearings ar e an important contribution to the legitimacy
and the perception of legitimacy of the WTO disput e settlement system. Canada cautions that "[t]he
legitimacy of the WTO dispute settlement system w ould suffer if the oral hearing at the appellate
level were to be closed while at the panel stage the hearings were open."327
146. In response to the comments of the third participants, Canada asserts that the third participants
that oppose the request to open the hearing seek to divorce the term "proceedings" from its context
and ignore the meaning of "confidential" altogether. 328 Canada further notes that, given the
entitlement of parties under Article 18.2 to disclo se their written submissions, oral statements, and
answers to questions, "it would be absurd to find that where those parties ag ree that they wish to
present their positions at an appellate hearing in open session, they may not do so." 329 Canada also
objects to the argument that the Appellate Body's decision on this issue would prejudge the outcome

322Canada's request for an open hearing, para. 7.
323Ibid., para. 9.
324Ibid., para. 14.
325Ibid., para. 15.
326Ibid., para. 19.
327Ibid., para. 24.
328Canada's comments on third participants' comments, para. 8.
329Ibid., para. 10.

of the DSU review negotiations. This argument, according to Canada, misconstrues the nature and
scope of the participants' request, because they are not asking the Appellate Body to decide that all
appellate hearings must be open to the public. Ca nada observes, moreover, that the argument is
premised on the incorrect notion that "whenever a matter in dispute settlement is or might be the
subject of negotiations among the membership, pane ls and the Appellate Body should decline to
consider the matter lest it 'prejudge' the outcome of the negotiations."
330
147. Accordingly, Canada requests that the Appellate Body allow public observation of the hearing
in these proceedings. Canada states that, in orde r to accommodate any third participants wishing to
retain the confidentiality of their oral submissions, a "practical solution" would be to have "a video
link between the room in which the oral hearing takes place and a second room in which the public
can watch the oral hearing"331 and to interrupt the broadcast if a third participant so wishes.
2. Articles 23.2(a) and 21.5 of the DSU
148. Canada submits that the Panel correctly found th at "recourse to dispute settlement" within the
meaning of Article 23.2(a) of the DSU is not lim ited to Article 21.5 panel proceedings and that
Articles 21.5, 23.1, and 23.2(a) did not require Ca nada to initiate a compliance panel proceeding for
purposes of examining the compatibility of Directive 2003/74/EC with the SPS Agreement.
149. According to Canada, the European Communities' characterization of this dispute as a
"disagreement as to the existence or consistency with a covered agreement of measures taken to
comply", within the meaning of Article 21.5, "ig nores ... that the essence of this dispute is not
specifically about a 'disagreement' over the [European Communities'] alleged compliance measure".332
Rather, Canada argues that Article 22.8 is the provi sion of the DSU that specifically applies to the
post-retaliation stage and that it is for the Europ ean Communities, as the party seeking termination of
the suspension of concessions, to demonstrate th at it has removed its WTO-inconsistent measure
within the meaning of Article 22.8. Canada ma intains that the European Communities' unilateral
assertion of compliance by virtue of Directive 2003/ 74/EC does not compel Canada to initiate an
Article 21.5 proceeding, and does not require Canada to lift the suspension of concessions. Canada
submits that to allow a unilateral declaration of compliance to displace the multilateral authorization
to suspend concessions "would contravene the very rule against unilateralism that the [European
Communities] accuses Canada of breaching".333

330Canada's comments on third participants' comments, para. 15.
331Canada's request for an open hearing, para. 29.
332Canada's appellee's submission, paras. 7 (ref erring to European Communities' appellant's
submission, para. 49) and 8.
333Ibid., para. 9.

150. Canada further submits that the European Communities has the option of initiating an
Article 21.5 proceeding itself. This is confirmed by the fact that the panel in EC – Bananas III
(Article 21.5 – EC) did not decline jurisdiction, even t hough the proceeding was initiated by the
European Communities, the respondent in the origin al proceedings. Canada recalls that the panel
report in EC – Bananas III (Article 21.5 – EC) was not adopted because the European Communities,
the only party that participated in that proceeding, did not request its adoption. Consequently, the
European Communities' assertion that "subsequent practice" confirms that Article 21.5 panel
proceedings may not be initiated by the orig inal respondent "is without any foundation". 334 Canada
disagrees with the European Communities' argument th at the panel's inability to compel other parties
to participate in EC – Bananas (Article 21.5 – EC) shows why an original respondent may not initiate
Article 21.5 proceedings, because "no panel can ev er compel a party to a dispute to appear" 335 in any
panel proceeding.
151. Canada asserts that the Panel correctly found that, while recourse to an Article 21.5 panel was
one of the procedural mechanisms available to th e European Communities to demonstrate that it had
"removed" its WTO-inconsistent measure and obtai n the termination of Canada's suspension of
concessions, the European Communities had several ot her procedural avenues available to it. These
include good offices and consultations, arbitration under Article 25 of the DSU, and recourse to a
panel de novo . The availability of a new panel proceedi ng is demonstrated by the fact that the
European Communities initiated the present dispute and put the issue of whether
Directive 2003/74/EC had brought it into compliance "squarely before the Panel" 336 through its
conditional claims. Thus, contrary to the Europ ean Communities' assertion that an Article 21.5 panel
proceeding is the only procedure providing finality to the dispute, the fact that the European
Communities put the issue of actual compliance "squar ely" before the Panel in this case demonstrates
its own belief that the Panel was in a position to ad judicate "the central matter at issue" in this
dispute.
337
152. On this basis, Canada requests the Appellate Body to reject the European Communities'
appeal regarding the Panel's finding that Articles 21.5 and 23.2(a) did not require Canada to initiate an
Article 21.5 panel proceeding for purposes of examining the WTO-consistency of
Directive 2003/74/EC.

334Canada's appellee's submission, para. 11 (referring to the European Communities' appellant's
submission, para. 91).
335Ibid., para. 12.
336Ibid., para. 15.
337Ibid., para. 15.

3. Article 22.8 of the DSU

153. Canada argues that, contrary to the Europ ean Communities' claims, the Panel correctly
interpreted Article 22.8 of the DS U by concluding that the phrase " until such time as the measure
found to be inconsistent with a c overed agreement has been removed" means that the illegality itself
must be removed, and not only the originally impugned measure.
154. According to Canada, the European Communities "advocates an overly narrow and
formalistic interpretation that fails to situate Article 22.8 in its proper context" 338 when arguing that
the "mere existence"339 of an implementing measure and its s ubsequent notification would be enough
to satisfy the requirement under Article 22.8 that the WTO-inconsistent measure is removed. In
contrast, the Panel properly took into account the context of Article 22.8 when finding that the
removal of the inconsistent measure, under the fi rst scenario in Article 22.8, required actual
compliance with the DSB's recommendations and ru lings before the suspension of concessions could
be terminated. Canada maintains that the sec ond and third scenarios requiring termination of the
suspension of concessions under Article 22.8 "conte mplate situations where the issue of the
nullification or impairment caused by ... non-complia nce with [the covered agreements] has been
satisfactorily addressed".
340 Furthermore, Canada asserts that the Panel correctly found that the
ongoing surveillance by the DSB of the implemen tation of the recommendations and rulings, as
provided in the second sentence of Article 22.8, was intended to ensure that Members fully implement
the DSB's recommendations and rulings. Canada also submits that surveillance by the DSB would be
rendered meaningless if its role were to be reduced to one of a passive observer that would "simply
take note of the 'existence' of an alleged implementing measure, without ensuring that its
recommendations and rulings have indeed been implemented". 341 Canada adds that the Panel's
interpretation was also consistent with the pr inciple of "prompt" compliance with the DSB's
recommendations and rulings expressed in Articles 21.1 and 3.2 of the DSU.
155. Canada further submits that the Panel's interpre tation of Article 22.8 w as consistent with the
object and purpose of the DSU to provide security an d predictability to the multilateral trading system
as set forth in Article 3.2. This is because, in Ca nada's view, "Article 22.8 is the linchpin for ensuring
that the suspension of concessions achiev es the objective of inducing full compliance" 342, and
Article 22.8 should not be interpreted so narrowly as to weaken the effectiveness of the suspension of
concessions. Canada contends that the interpretation of Article 22.8 advocated by the European

340Ibid., para. 25.
341Ibid., para. 26.
342Ibid., para. 33.

Communities would require the immediate terminat ion of Canada's suspension of concessions upon
the mere unverified assertion and unilateral declaration of compliance with the DSB's
recommendations and rulings and woul d require "the initiation by Cana da of new litigation" in order
not to "displace Canada's multilaterally authorized suspension of concessions". 343 If it is eventually
established that the alleged implementing measure does not comply with the DSB's recommendations
and rulings, the Member seeking compliance "will c ontinue to suffer, without any relief, the
nullification or impairment caused by the failure of the non-compliant Member to bring itself into
compliance".344 Thus, Canada argues, the interpretation of Article 22.8 advocated by the European
Communities should be rejected in order to avoid "a cycle of 'recurrent litigation'".345
156. Canada therefore requests the Appellate Body to reject the European Communities' appeal of
the Panel's finding that Article 22.8 of the DSU requires actual compliance with the DSB's
recommendations and rulings before the suspension of concessions must be terminated.
4. The Panel's Terms of Reference
157. Canada contends that the European Communities' claim that the Panel exceeded its terms of
reference when it assumed a role similar to that of a compliance panel confuses the issue of the
Panel's jurisdiction with the issue of the sequen ce of the European Communities' claims. Canada
notes that, under its alternative and conditional claim, the European Communities implicitly
acknowledged that the Panel had jurisdiction to ex amine the compatibility of Directive 2003/74/EC
with the SPS Agreement. Thus, the real contention underlying the European Communities' claim that
the Panel exceeded its terms of reference is not th at the Panel improperly examined the consistency of
Directive 2003/73/EC with the SPS Agreement , but, rather, that the Panel did so in addressing the
European Communities' second series of main claims.
158. Canada maintains that the Panel correctly f ound that it had no choice but to review the
consistency of Directive 2003/74/EC with the SPS Agreement, because the presumption of good faith
compliance, which the European Communities relied upon in making its second series of main claims,
was rebuttable by Canada. Canada recalls th e Panel's observation that its examination of
Directive 2003/74/EC under the SPS Agreement was "not the result of ... disregarding the order in
which"346 the European Communities presented its claims, but was done for the purpose of addressing
the European Communities' second series of main cl aims under Articles 23.1, 22.8, and 3.7 of the

344Ibid., para. 35.
345Ibid. (quoting Panel Report, Canada – Continued Suspension, para. 7.230).

DSU. Hence, the Panel's approach was not a resu lt of it disregarding the sequence of the European
Communities' claims, but the result of a reasoned analysis of the second series of main claims.
159. Canada further argues that, although the European Communities' panel request did not refer to
provisions of the SPS Agreement , the Panel correctly found that the compatibility of
Directive 2003/74/EC with the SPS Agreement was ipso facto an issue before the Panel. Thus, the
Panel did not breach Article 7 of the DSU, beca use this provision requires panels to address the
relevant provisions of the covered agreement cited by the parties. Canada recalls that the European
Communities' second series of main claims was prem ised on a violation of Article 22.8 by Canada,
which in turn depended on a finding that the measure found to be inconsistent with the
SPS Agreement in EC – Hormones had been removed. Conseque ntly, Article 22.8 required the
Panel to consider the consistency of Directive 2003/74/EC with the SPS Agreement as a condition
precedent to a finding of violation by Canada of Artic le 22.8. In addition, Ca nada maintains that the
Panel's approach was consistent with the Appellate Body's finding in Argentina – Footwear (EC)
that a panel cannot make an "objective assessment of the matter" if it only refers in its reasoning to the
"specific provisions cited by the parties in their claims".
347 Canada observes, moreover, that the Panel
considered that the issue of the substantive co mpliance of the European Communities' implementing
measure was raised "early in the proceedings" and th erefore "no party to the dispute could claim that
it did not have the opportunity to address the legal arguments of the other."348
160. On this basis, Canada requests the Appellate Bo dy to reject the European Communities' claim
that the Panel exceeded its terms of reference unde r Articles 7 and 21.5 of the DSU when examining
the compatibility of Directive 2003/74/EC with the SPS Agreement.
5. The Panel's Suggestion for Implementation
161. In its appellee's submission, Canada did not a ddress the European Communities' request that
the Appellate Body modify the Panel's suggesti on for implementation. However, in its other
appellant's submission, Canada requests the Appella te Body to reverse the Panel's suggestion for
implementation, because the suggestion was c ontradictory to the Panel's findings under
Article 22.8.349

347Canada's appellee's submission, para. 43 (quoting Appellate Body Report, Argentina – Footwear
(EC), para. 74).
348Ibid. (referring to Panel Report, Canada – Continued Suspension, para. 7. 371).
349See also infra, para. 206.

6. The Panel's Selection of Experts
162. Canada rejects the European Communities' argument that Section VI of the Rules of Conduct
sets forth the relevant legal standard. 350 Rather, Canada submits that the only standard governing
conflict of interest questions is found in Section II (Governing Principle) of the Rules of Conduct .
That provision requires that all persons covered under the Rules of Conduct, including experts, "shall
be independent and impartia l", and "shall avoid direct or indirect conflicts of interest". Moreover,
Canada asserts that Drs. Boisseau and Boobis met the disclosure requirement under the Working
Procedures for Consultations with Scientific a nd/or Technical Experts (the "Experts Working
Procedures") developed by the Panel, and that, in particular, both complied with the requirements by
disclosing their involvement in JECFA. In Canada's view, "it was up to the Panel to evaluate whether
this had an impact [on] the independence and impartiality of these candidates in this case."351
163. Canada submits that the Panel correctly found that Drs. Boisseau and Boobis were
independent and impartial. Canada re calls that the Panel "expressly addressed" 352 the allegation that
these two experts were defending their prior work when it explained that the purpose of consulting
them was to obtain advice about the substance of JECFA's risk assessment, and to help identify the
extent to which concerns raised by the European Communities had been considered in JECFA's risk
assessment. Canada also highlights the Panel's ex planations that it was asking the experts about
JECFA's consensual view, which may differ from the experts' personal views, and that both experts
admitted to the Panel that the state of scientific knowledge can evolve.
164. Canada observes that the conflict of interest alleged by the European Communities is not
covered by the Illustrative List of Information to be Disclosed set out in Annex 2 of the Rules of
Conduct. Therefore, according to Canada, "an expert's previous participation in JECFA would not put
the person in a conflict-of-interest situation wh en he or she provides advice to the Panel." 353 I n
Canada's view, participation by these experts both in JECFA and as advisers to the Panel occurred in a
personal, independent, professional capacity and for no monetary gain. Moreover, Canada submits, it
is inaccurate to portray participation by Drs. Bo isseau and Boobis in JECF A committees as "giving
them an (almost proprietary) interest in the outco me of the JECFA process that they would have felt
compelled to defend when advising the Panel". 354 Canada maintains that the JECFA process "is a
diffuse one, in which a number of scientists par ticipate but the precise outcome is uncertain

350Canada's appellee's submission, para. 47 (referring to European Communities' appellant's
submission, para. 195).
351Ibid., para. 49.
352Ibid., para. 54.
353Ibid., para. 55.
354Ibid., para. 56.

beforehand".
355 The experts, Canada submits, were cont ributors to a process "aimed at reaching a
consensus out of what may initially be a variety of scientific views", which is "very different" from
scientific conclusions arrived at through the efforts of, and published by, an individual scientist.356
165. Canada considers that the practical consequence of the Panel excluding Drs. Boisseau and
Boobis as experts would have been that "the pool of eligible experts would have been shrunk
significantly, such that it would have become very difficult for the Panel to appoint experts in all the
areas of expertise that it had identified." 357 Pointing to an example in which a particular scientist had
examined issues relating to genetically modified organisms for both the European Food Safety
Authority and JECFA, Canada avers that this is c onsistent with its view that independent scientific
experts serving in their personal capacity may a dvise different international bodies (or national
bodies) on the same subject matter without compromising their independence and impartiality.
166. Canada therefore requests the Appellate Body to reject the European Communities' claim that
the Panel acted inconsistently with the princi ple of due process, the requirements of the Rules of
Conduct, and Article 11 of the DSU in selecting Drs. Boisseau and Boobis, and to reject the request to
reverse the Panel's findings that relied on the advice of these two experts.
7. Article 5.1 of the SPS Agreement
167. Canada argues that the Panel was correct in finding that the European Communities'
permanent ban on meat and meat products from cattle treated with oestradiol-17 β for growth-
promoting purposes was not based on a risk assessmen t within the meaning of Article 5.1 of the SPS
Agreement. Canada requests the Appellate Body to dismiss the European Communities' appeal.
168. Canada argues that the Panel correctly interpreted Article 5.1 of the SPS Agreement , as
informed by Article 5.2 of the SPS Agreement , and did not ignore in its analysis the European
Communities' arguments regarding misuse and abuse in the administration of hormones. Canada
maintains that the European Communities did no t provide evidence demonstrating that it had
evaluated misuse and abuse in the administration of oestradiol-17 β as a specific risk in relation to the
consumption of meat from cattle treated with this hormone for growth-promotion purposes.
Therefore, "it is even unreasonable to presume misuse/abuse of hormones" 358 for purposes of the
Panel's examination of Article 5.1 in this dispute. In addition, Canada asserts that the Panel was
correct in finding that the issue of misuse and abus e was relevant "only to the extent that it [could]

356Ibid.
357Ibid., para. 57.
358Ibid., para. 87.

lead to an increased concentration of hormone residues in meat and meat products than would
otherwise occur if good veterinary practices are applied." 359 The Panel found in this regard that the
European Communities had not evaluated the po tential for adverse effects arising from the
consumption of meat containing residues of oestradiol-17 β as a result of cattle being treated with this
hormone for growth-promotion purposes. Thus, because the European Communities had not
specifically assessed the risk arising from consumption of meat containing hormone residues, the
Panel rightly found that whether the concen trations of residues of oestradiol-17 β in meat could be
higher as a result of misuse and abuse did not need to be addressed. Canada rejects the European
Communities' argument that the Panel placed undue emphasis on the Codex standards, which assume
good veterinary practices. Canada submits that the Panel did not perceive its task as evaluating the
SCVPH Opinions against the assessments by JECF A; rather, once it had found that the European
Communities had taken Codex into account, thereby co mplying with the terms of Article 5.1 of the
SPS Agreement , the Panel was correct in using Codex's approach to risk assessment as a general
reference.
169. Canada contends moreover that the Panel did not exclude a priori from its analysis evidence
on possible misuse and abuse in the administration of hormones, which was the legal error identified
by the Appellate Body in EC – Hormones . Rather, the Panel "properly confined its inquiry to the
assessment that was material to the context of this case".
360 Canada submits that the Panel properly
rejected the European Communities' attempt to interpret the Appellate Body's finding in EC –
Hormones—that risk assessments may include matters not susceptible of quantitative analysis—as
allowing "risk management" considerations to be ta ken into account in a "risk assessment" within the
meaning of Article 5.1. 361 According to Canada, the European Communities' arguments relating to
"risk management" seek "to distract from the main weakness of its case: that it did not assess the
specific risk".362
170. Canada asserts that the Panel correctly held that the European Comm unities' risk assessment
was not sufficiently specific to the particular risk at issue, that is, the adverse effects to human health
arising from consumption of meat from cattle treated with oestradiol-17 β for growth-promotion
purposes. Canada draws attention to the Appellate Body's findings in EC – Hormones that the
scientific evidence considered in a risk assessment must be "sufficiently specific" 363 to the substance

359Canada's appellee's submission, para. 88 (referring to Panel Report, Canada – Continued
Suspension, para. 6.154).
360Ibid.
361Ibid., para. 93 (referring to Panel Report, Canada – Continued Suspension, paras. 7.491 and 7.492).
362Ibid., para. 93.

at issue in order for it to "sufficiently warrant" or "reasonably support" the SPS measure.
364 Canada
maintains that the European Communities w as not absolved from conducting a quantitative
assessment of such risk simply because the SCVPH Opinions indicate that oestradiol-17 β is
genotoxic. This is because the evidence referred to in the SCVPH Opinions relates to the genotoxicity
of oestradiol-17β in vitro365, which does not indicate that it is genotoxic in vivo.366 Canada rejects
the European Communities' allegation that the Pa nel ignored Dr. Guttenplan's statement that the
scientific evidence was specific in rela tion to the relevant risk. This statement must be interpreted as
referring only to the "hazard identification" 367 phase of a risk assessment, and Dr. Guttenplan
subsequently stated that "the evidence evalua ting the occurrence of adverse effects is weak." 368
Canada also notes that two other experts indicated very clearly that the European Communities "did
not have scientific evidence to support the assertion of the specific risk".369 Therefore, the Panel had a
"solid basis"370 for finding that the risk assessments were not sufficiently specific to the relevant risk
arising from hormone residues in meat.
171. Canada also contests the European Communities' assertion that the Panel erred in requiring a
quantification of risks. Canada observes th at, although the Appellate Body recognized in EC –
Hormones that a risk assessment could be performed eith er quantitatively or qualitatively, it also held
that a risk assessment is a pro cess "characterized by systematic, disciplined and objective enquiry and
analysis".371 Therefore, a qualitative risk assessment must be "done in a scientifically rigorous
fashion"372, and the European Communities could not ma ke a qualitative assessment on the basis of
unproven assumptions where the available quantita tive data go against those assumptions. The
European Communities' risk assessment did not meet this standard, because it did not contain either
quantitative or qualitative evidence of the genotoxic potential of oestradiol-17 β in vivo. In addition,
the European Communities failed to substantiate its assertion that no threshold could be identified for

364Canada's appellee's submission, para. 98 (quoting Appellate Body Report, EC – Hormones ,
para. 193). (underlining omitted)
365In vitro means outside of the body, usually in a cell-based system in a test tube or culture dish..
(Panel Report, US – Continued Suspension , footnote 509 to para. 7.393(d); and Panel Report, Canada –
Continued Suspension , footnote 500 to para. 7.390(d) (referring to transcript of the Panel meeting with the
scientific experts, Panel Reports, Annex G, para. 96))
366In vivo means in the whole organism, the intact organism (Panel Report, US – Continued
Suspension, footnote 585 to para. 7.472 (referring to transcript of the Panel meeting with the scientific experts,
368Ibid. (quoting Panel Report, Canada – Continued Suspension, para. 7.495).
369Ibid. (referring to replies to questions posed by the Panel to the scientific experts, Panel Reports,
Annex D, paras. 129-144).
370Ibid., para. 99.
372Ibid., para. 102.

oestradiol-17β, because it did not provide evidence suggesti ng that this hormone is a "direct-acting
genotoxicant".373
172. Canada submits furthermore that the Pane l's examination of whether the European
Communities had evaluated the "poten tial occurrence of adverse effects" 374 does not express a
preference for a quantitative analysis of risk and is consistent with the SPS Agreement . This is
because the only possible way to ex amine the "potential" for adverse effects, within the meaning of
Annex A, paragraph 4, to the SPS Agreement , is to "ask whether those adverse effects could ever
occur".375 Canada also points out that the Panel recogni zed that "potential" is a lesser threshold than
"likelihood".376 Canada adds that the Panel's approach is consistent with the Appellate Body's finding
in EC – Hormones, because the Appellate Body did not fault th e panel in that dispute for finding that
a risk assessment under Annex A, paragraph 4, re quires an evaluation of "the potential ... of
occurrence of such effects". 377 Canada additionally recalls th e Appellate Body's reasoning that
Article 5.1 is "intended as a countervailing factor in respect of the right of Members to set their
appropriate level of protection" 378 pursuant to Article 3.3 of the SPS Agreement . By contrast, the
European Communities seems to be arguing for an "unqualified right to defi ne its own level of
protection"379 by asserting that the Panel erred in favour ing quantitative methods over qualitative ones
when examining the risk assessment performed by the European Communities.
173. Canada asserts that the Panel made an objective assessment of the matter in reaching its
finding that the European Communities' permanent ban on oestradiol-17 β was not based on a risk
assessment within the meanin g of Article 5.1. As the trier of facts, the Panel was entitled to accord
more weight to the views of those experts it found to be credible and persuasive. Canada emphasizes
that, under the Appellate Body's interpretation, an objective assessment under Article 11 of the DSU
implies, among other things, that a "panel must consider all the evidence presented to it, assess its
credibility, determine its weight, and ensure that its factual findings have a proper basis in that
evidence."380 Within these parameters, "panels enjoy discretion as the trier of facts, including in
disputes involving the evaluation of scientific evidence" 381 and, in the exercise of this discretion, are

374Ibid., para. 107 (referring to European Communities' appellant's submission, para. 340, in turn
quoting Panel Report, US – Continued Suspension , para. 7.521, and Panel Report, Canada – Continued
Suspension, para. 7.493). (emphasis omitted)
375Ibid., para. 107. (original underlining)
377Ibid. (referring to Appellate Body Report, EC – Hormones, para. 183). (emphasis omitted)
379Ibid., para. 109.
381Ibid., para. 62 (referring to Appellate Body Report, Japan – Apples, paras. 166 and 221).

entitled "to determine that certain elements of evid ence should be accorded more weight than other
elements".
382 Thus, "[r]equiring panels, in their assessm ent of the evidence before them, to give
precedence to the importing Member's evaluation of scientific evidence and risk is not compatible
with this well-established principle." 383 Canada underscores that, give n the discretion afforded to
panels to appreciate the value of the evidence before them, the Appe llate Body has made clear that
"not every error in the appreciation of the evidence ... may be characterized as a failure to make an
objective assessment of the facts."384
174. Canada maintains that the European Communiti es has failed to demonstrate that the Panel
exceeded the bounds of its discretion as the trier of facts in reaching its factual findings regarding the
consistency with the SPS Agreement of the permanent ban on meat from cattle treated with
oestradiol-17β imposed pursuant to Directive 2003/74/EC . Canada does not view the Panel's
statement that it was in a situation "similar" 385 to that of a risk assessor as an indication that the Panel
"drifted into a de novo review"386 of the European Communities' ri sk assessment. Rather, the Panel
made use of the advice given by the experts as context to assess the alleged compliance of the
European Communities' measure with the r ecommendations and rulings of the DSB in EC –
Hormones. In this regard, the Panel specifically acknowledged that it was poorly suited to engage in a
de novo review of the European Communities' risk assessment. 387 According to Canada, as the trier
of facts, the Panel was entitled to give greater weig ht to the advice of certain experts, and was under
no obligation to treat all advice received from the experts "on an equal footing". 388 Thus, rather than
"picking and choosing"389 between the opinions of the experts, the Panel weighed the advice received
from the different experts and carried out an obj ective assessment of the matter before it, in
conformity with Article 11 of the DSU.
175. Turning to the specific allegations of e rror made by the European Communities under
Article 11 of the DSU, Canada characterizes as "simply false" 390 the European Communities'
allegation that the Panel did not take into account evidence relate d to exposure to hormones from
multiple sources. The Panel "specifically acknowledge[d] that it had considered the issue [of multiple

382Canada's appellee's submission, para. 62 (quoting Appellate Body Report, EC – Asbestos, para. 161).
383Ibid. (quoting Appellate Body Report, Japan – Apples, para. 166). (emphasis omitted)
Canada also refers to Appellate Body Report, Brazil – Retreaded Tyres, para. 186; and Appellate Body Report,
Chile – Price Band System (Article 21.5 – Argentina) , para. 240. (Canada's appellee's submission, paras. 63
and 67)
387Ibid., para. 72 (referring to Panel Report, Canada – Continued Suspension , paras. 7.107, 7.405,
7.406, 7.571, and 7.630).
388Ibid., para. 73.
390Ibid., para. 77.

exposure]"391 in its analysis of the European Communities' risk assessment under Article 5.1, and for
this reason did not fail to conduct an objective assessment as required by Article 11.
176. Furthermore, Canada rejects the European Communities' contention that the Panel imposed an
incorrect "specificity" or "direct causality" requirement. 392 Rather than requiring the "demonstration
of actual effects" 393, the Panel correctly required the Eu ropean Communities "to evaluate the
possibility that the identified adver se effect came into being, orig inated, or resulted from the presence
of residues of oestradiol-17 β in meat or meat products as a result of the cattle being treated with the
hormone for growth promoting purposes." 394 According to Canada, this neither amounts to a
requirement that the European Communities demonstrate "actual effects" 395, nor is it a violation of
Article 11 by the Panel.
177. Finally, Canada maintains that the Panel "extensively dealt" with the evidence396 related to the
genotoxicity of oestradiol-17β in its report and concluded that the scientific evidence referred to in the
SCVPH Opinions did not "support the European Co mmunities' conclusion that for oestradiol-17 β
genotoxicity had already been demonstrated explic itly", nor did it "support the conclusion that the
presence of residues of oestradiol-17β in meat and meat products as a result of the cattle being treated
with the hormone for growth promotion purposes leads to increased cancer risk". 397 Therefore,
Canada asserts that the Panel carefully considered all the evidence before it on the genotoxicity of
oestradiol-17β, and did not fail to conduct an objective assessment of the matter as required by
Article 11 of the DSU.
178. Canada concludes that the Panel correctly interpreted and applied Article 5.1 of the
SPS Agreement and did not fail to make an objective assess ment of the matter under Article 11 of the
DSU. Canada therefore requests the Appellate Body to dismiss the appeal of the European
Communities regarding the Panel's findings under Article 5.1 of the SPS Agreement.
8. Article 5.7 of the SPS Agreement
179. Canada argues that the Panel properly found that the relevant scientific evidence on the five
hormones subject to the provisional ban was not "insufficient" within the meaning of Article 5.7 of

391Canada's appellee's submission, para. 77 (referring to Panel Report, Canada – Continued
Suspension, para. 7.501).
392Ibid., para. 79 (referring to European Communities' appellant's submission, paras. 259-270).
393Ibid. (referring to European Communities' appellant's submission, para. 261).
omitted)
395Ibid. (quoting European Communities' appellant's submission, para. 261).
396Ibid., para. 81.
397Ibid. (quoting Panel Report, Canada – Continued Suspension, para. 7.540). (underlining omitted)

the SPS Agreement . Canada requests the Appellate Body to dismiss this ground of the European
Communities' appeal.
180. Canada submits that the Panel correctly consider ed the relevance of international standards in
determining that the scientific evidence on risks pos ed by the five hormones was not "insufficient"
within the meaning of Article 5.7. Canada observes that the Panel did not find that the existence of
international standards created an irrebuttable presu mption of the sufficiency of scientific evidence
and amounted to a "legal bar"
398 to the adoption of provisional measures under Article 5.7. Rather,
the Panel was "expressing a presumption, not a conclusion" 399, when it found that the existence of
international standards "implies" that sufficient evid ence existed to complete a risk assessment. This
is borne out by the Panel's recognition that previ ously sufficient evidence could subsequently become
"insufficient" within the meaning of Article 5.7 when it is "unsettled" 400 by new studies. Therefore,
contrary to the European Communities' contention, the Panel explicitly recognized that, despite the
existence of international standards, there could be situations where relevant scientific evidence
becomes insufficient to conduct an adequate risk as sessment. On that basis, the Panel went on to
assess whether the "insufficiencies" identified by the European Communities were enough to render
insufficient the previously sufficient evidence upon which the JECFA assessments were based.
181. In addition, Canada suggests that the Panel corre ctly excluded from the scope of its analysis
under Article 5.7 the level of protection chosen by the European Communities. The Panel was correct
in finding that the ability of th e European Communities to conduct a risk assessment on four of the
provisionally banned hormones could not "hinge on" 401 its decision to apply a higher level of
protection than that reflected in the internationa l standards. The European Communities' argument
that the "sufficiency" of scientific evidence under Ar ticle 5.7 depends on the acceptable level of risk
adopted by a Member 402 undermines the "basic logic" of the SPS Agreement , according to which
Article 5.7 operates as a "temporary 'safety valve'"403 in situations where there is insufficient scientific
evidence to allow a Member to c onduct a risk assessment that fulfils the requirements of Articles 2.2
and 5.1. The European Communities' approach w ould allow Members "to effectively exclude from
the available pool of relevant scientific evidence, any evidence that does not support their chosen
level of protection" 404 for purposes of evaluating whether ther e is sufficient scientific evidence to
conduct a risk assessment. Canada argues that a Memb er's desired level of protection is not relevant

399Ibid., para. 118. (underlining omitted)
401Ibid., para. 122.
402Ibid., para. 121 (referring to European Communities' appellant's submission, para. 397; and Panel
Report, Canada – Continued Suspension, paras. 7.618 and 7.619).
403Ibid., para. 122.
404Ibid., para. 123.

for determining whether the scientific evidence is "i nsufficient" within the meaning of Article 5.7,
because the "autonomous right" 405 of WTO Members to introduce measures that result in a higher
level of protection than the one achieved by measures based on international standards under
Article 3.3 is subject to the requirement that such measures be based on a risk assessment.
182. Canada maintains that the Panel did not err in allocating to the European Communities the
burden of proving the insufficiency of the scientific evidence under Article 5.7. Canada considers that
the Panel correctly characterized Article 5.7 as a "qualified exemption" 406 from the obligation under
Article 2.2 not to maintain SPS meas ures without sufficient scientific evidence. Article 5.7 is not an
option that can be freely chosen by a Member. Rather, it operates as a "temporary 'safety valve'" 407 in
situations where some evidence exists but are not enough to complete a full risk assessment. The
Panel shifted the burden of proof under Article 5.7 to the European Communities only once it was
satisfied that Canada had sufficiently refuted th e European Communities' allegation of compliance
through positive evidence of a breach of Article 5.7. Canada posits further that this allocation of the
burden of proof is consistent with the Appellate Body's ruling in US – Wool Shirts and Blouses ,
because it was for the European Co mmunities, as the party alleging a breach of Article 22.8 of the
DSU, to demonstrate that its implementing measure complied with Article 5.7 of the SPS
Agreement.408
183. Furthermore, Canada argues that the Panel did not err in finding that, in situations where
international risk assessments have been conducted for the substances at issue, a "critical mass" of
new evidence would be required to render the rele vant scientific evidence "insufficient" for the
purposes of Article 5.7. Canada dismisses the Eur opean Communities' argument that the "critical
mass" standard excludes a priori the possibility that a WTO Member base its risk assessment on
respectable minority views. Canada recalls the A ppellate Body's finding that a measure conforming
to the requirements of Article 5.1 may be based on minority opinions. 409 In these situations, Canada
argues, there is "inherently" 410 sufficient evidence to perform a ri sk assessment that provides a basis
for the SPS measure. Article 5.7, in contrast, only a pplies to situations where there is "insufficient"
scientific evidence to conduct a risk assessment "at a ll", regardless of whether a measure is based on

405Canada's appellee's submission, para. 124 (quoting Appellate Body Report, EC – Hormones ,
para. 172).
(emphasis omitted))
407Ibid., para. 122.
408Ibid., para. 115 (referring to Appellate Body Report, US – Wool Shirts and Blouses , p. 14, DSR
1997:I, 323, at 335).
409Ibid., para. 127 (referring to Appellate Body Report, EC – Hormones , para. 194; and Appellate
410Ibid., para. 127.

"minority" or "mainstream" scientific opinions.
411 Therefore, contrary to the European Communities'
contention, "the concept of critical mass as applie d by the Panel cannot be assimilated with the
findings of the Appellate Body on the validity of basing an SPS measure on minority views." 412
Canada adds that the notion of "critical mass" used by the Panel does not specify how much evidence
would be needed to make insufficient scientific ev idence that was previously sufficient, nor does it
exclude the possibility that one "new study or seri es of studies could call into question the scientific
assumptions underpinning the current understanding of a scientific issue." 413 Thus, Canada submits,
the Panel's "critical mass" standard "correctly sets a high threshold" 414 reflecting the presumption in
this dispute that the available scientific evidence had been sufficient to adopt the relevant international
standards.
184. Finally, Canada argues that the Panel did not fail to conduct an objective assessment of the
facts under Article 11 of the DSU in reachi ng its findings under Article 5.7 of the SPS Agreement.
Canada asserts that the European Communities' allegation that the Panel acted inconsistently with
Article 11 appears to have "lost sight of the process that the Panel was engaged in" 415, which was to
arrive at an objective determination of the facts in accordance with Article 11 of the DSU. Canada
refers to its earlier arguments that, as the trier of facts, the Panel had the discretion to determine what
weight to attach to the statements made by the e xperts in the course of the proceedings, and to assess
the experts' expertise and credibility. 416 Canada rejects the European Communities' allegations that
the Panel "systematically downplay[ed]" 417 the expert opinions indicating that the scientific evidence
was insufficient to carry out a risk assessment. According to Canada, such allegations fail to take into
account the fact that, in addition to reviewing th e written answers by the experts to the Panel's
questions, the Panel was able to "observe these expe rts" during the meetings with them and was able
to "arrive at an assessment of their respective expertise and thei r credibility in particular areas". 418
Thus, it was on this basis that the Panel was en titled to rely more on the views expressed by some
experts than those of others. Therefore, the Pa nel's reliance on the views of these experts was fully
consistent with its function as the trier of facts, and thus was consistent with Article 11 of the DSU.
185. Canada concludes that the Panel correctly in terpreted and applied Article 5.7 of the SPS
Agreement and did not fail to make an objective assessment of the matter under Article 11 of the

412Ibid., para. 128.
413Ibid.
414Ibid.
415Ibid., para. 129.
416See also supra, paras. 173 and 174.
417Canada's appellee's submission, para. 130 (quoting European Communities' appellant's submission,
418Ibid., para. 130.

DSU. Canada therefore requests the Appellate Body to dismiss the appeal of the European
Communities regarding the Panel's findings under Article 5.7 of the SPS Agreement.
D. Claims of the United States – Other Appellant
186. The United States claims that the Panel erre d in finding that the United States has acted
inconsistently with Articles 23.1 and 23.2(a) of th e DSU by "seeking the redress" of a violation in
relation to Directive 2003/74/EC and by making a dete rmination of violation without recourse to the
rules and procedures of the DSU. The United Stat es requests the Appellate Body to reverse these
findings of the Panel.
1. Alleged Discrepancies in the Panel's Description of the Measure at Issue
187. The United States submits that conceptual difficu lties and apparent discrepancies exist in the
Panel's description of the measure at issue and in the Panel's identification of the relevant timeframes
associated with the suspension of concessions. Th e Panel described the measure at issue as the
"suspension of concessions ... con tinued without recourse to the procedures under the DSU", or the
"continued application by the United States ... of its decision to apply ... import duties in excess of
bound rates ... without recourse to the procedures under the DSU." 419 These descriptions are not only
different, but confuse the legal claims made by the European Communities w ith what should be a
factual description of the measure. The relevant timeframe of the measure was identified as from the
"adoption of Directive 2003/74/EC", or "after the notification to the DSB of
Directive 2003/74/EC".
420 Such discrepancies, in the United States' view, reflect a conceptual
difficulty with the Panel's approach and show that the Panel appeared to be struggling to explain how
it could find that the suspension of concessions author ized by the DSB is inconsistent with the United
States' obligations under the WTO. According to the United States, "the Panel appear[ed] to be trying
to characterize the measure not as the duties them selves, but as something else, something that
changed in the measure once the [European Co mmunities] notified its (inaccurate) claim of
compliance"421; nonetheless, there was no new measure as a result of the European Communities'
claim of compliance and no modification or other alteration in the duties.

419United States' other appellant's submission, para. 21 (quoting Panel Report, US – Continued
Suspension, paras. 2.7 and 7.151).
420Ibid., para. 26 (quoting Panel Report, US – Continued Suspension , paras. 2.7 and 7.151). (emphasis
omitted)
421Ibid., para. 27.

2. The Panel's Findings under Article 23.1 of the DSU

188. The United States argues that the Panel "simply err[ed]" when it found that the application of
the suspension of concessions was "without recourse to the procedures under the DSU". 422 T h e
United States observes that, before it was author ized by the DSB to suspend concessions, it had
extensive and lengthy recourse to multiple proce dures under the DSU and "had fully complied with
all relevant rules and procedur es of the DSU ... in bringing the EC – Hormones dispute, determining
the applicable [reasonable period of time] for co mpliance, determining the appropriate level of
suspension of concessions, and obtaining the aut horization of the DSB to suspend concessions". 423
The United States emphasizes that the DSB's aut horization to suspend concessions, which it was
granted on 26 July 1999, "has never been revoke d and the [United States'] application of duties
pursuant to that authorization has continued, unchanged", to this day.424
189. The United States asserts that, by finding that the United States was seeking the redress of a
violation in relation to Directive 2003/74/EC, the Panel "re-characteriz[ed]" 425, without any legal
basis, the United States' suspension of co ncessions as now being directed against
Directive 2003/74/EC. The United States furthe r submits that the European Communities'
notification of Directive 2003/74/EC to the DSB was a mere unilateral declaration of compliance, and
that such a declaration does not fulfil any of th e three conditions under Article 22.8 that must be
satisfied before the DSB's authorization would cease to operate. The United States explains,
moreover, that the Panel seemed to have improperly inferred that there was "some deadline by which
a Member must respond to such a unilateral declaration" 426, when no such deadline was provided for
in the DSU. Therefore, the United States argues that the Panel erroneously permitted the unilateral
declaration of compliance to transform the lega l justification for the suspension of concessions
maintained by the United States. Given that the Pa nel found that the inconsistent measure has in fact
not been removed, the multilateral DSB authorization remains in place and effective.
190. In the United States' view, the Panel's re-char acterization of the legal justification for the
suspension of concessions, as now directed agai nst Directive 2003/74/EC, is "fatally flawed" 427 for
several reasons. First, the Panel's finding is inco nsistent with the ordinary meaning of the term
"authorized", which is defined as "legally or formally sanctioned or appointed" 428, and with the fact

422United States' other appellant's submission, para. 29.
423Ibid., para. 17.
424Ibid., para. 18.
425Ibid., para. 31.
426Ibid., para. 37.
427Ibid., para. 40.
428Ibid., para. 43 (quoting The New Shorter Oxford English Dictionary , 4th edn, L. Brown (ed.)
(Clarendon Press, 1993), Vol. 1, p. 151).

that an "authorized" act is by definition consistent with the law. Therefore, the Panel's finding that the
United States' suspension of concessions, which rema ins authorized, could constitute a violation of
Article 23.1 was based on the paradoxical propos ition that an act permitted by the law can
simultaneously be prohibited by the law. Seco ndly, the Panel's analysis relied on a "false
dichotomy"429: where a measure taken to comply is notified, a complaining party either terminates the
suspension of concessions because it concludes that the measure is consistent with the covered
agreements, or continues the suspension of concessions because it considers that the measure does not
bring the implementing Member into compliance. In the United States' view, such a false dichotomy
lacks a basis in the DSU because th e DSU does not require a Member to form definitive conclusions
regarding the validity of a unilateral declaration of compliance. The United States simply kept the
duties in place and maintained the status quo on the basis that the European Communities'
declaration of compliance has not been multilaterally confirmed.
191. In addition, the United States asserts that the Panel erred in the allo cation of the burden of
proof as it relieved the European Communities of the duty to make a prima facie case of
inconsistency under Article 23.1 of the DSU. Furthe rmore, the United States recalls that, in rejecting
the United States' argument that the European Co mmunities has failed to show that the conditions
under Article 22.8 for terminating the suspension of concessions have been met, the Panel reasoned
that it is the obligation of the Member suspending co ncessions to ensure that the suspension is applied
only until such time as foreseen in Article 22.8. Th e United States contends that Article 22.8 does not
assign such responsibility to the Member suspending concessions and does not specify the procedures
for determining whether the conditions in Article 22 .8 are met. To the United States, "[w]hat is
clear"
430 under Article 22.8 is that there is no basis to find that a multilateral authorization to suspend
concessions is to be terminated by a unilateral declaration of compliance. A responding Member
should not be able to escape the suspension of con cessions and force the complaining party to engage
in dispute settlement "simply by notifying a claim of compliance".431
192. The United States submits that the Panel's findi ngs under Article 23.1 lead to "fundamentally
problematic"432 consequences, because, simply by clai ming compliance, a Member could escape the
application of the suspension of concessions and force the complaining party to initiate another
dispute settlement proceeding, potentially creating an "endless loop" 433 of litigation. The United
States additionally submits that the Panel "effectiv ely read[s] into [Article 22.8 of the DSU] an
obligation" on the Member suspending concessions "to take steps by some deadline to ascertain

429United States' other appellant's submission, para. 45.
430Ibid., para. 57.
431Ibid., para. 62.
432Ibid., para. 60.
433Ibid., para. 65.

whether the conditions in Article 22.8 have been met".
434 Consequently, the Panel's approach "would
add to the rights and obligations of Members in contravention of" 435 Article 19.2 of the DSU. The
United States asserts that the DSU does not specify th e rules applicable to the situation in the post-
suspension stage where an original responding party has declared itself to be in compliance four years
after the reasonable period of time for implementati on has expired. Thus, pa nels and the Appellate
Body "should not supplant the work and efforts of Members to provide clarifications or improvements
to the DSU".436 The United States observes that the DSU " does not leave parties in a post-suspension
state of play bereft of tools to obtain redress and resolution" 437, and recourse to a normal panel
proceeding remains an option to Members in the pos t-retaliation stage, as the European Communities
chose to do in this dispute.
3. The Panel's Findings under Article 23.2(a) of the DSU
193. The United States also takes issue with the Pane l's finding that the statements made by the
United States at the DSB meetings constituted a un ilateral "determination" to the effect that a
violation occurred within the meaning of Article 23. 2(a) of the DSU. This conclusion, according to
the United States, was neither consistent with the or dinary meaning of the term "determination" in its
context and in the light of the object and purpose of the DSU, nor supported by the negotiating history
of the DSU. According to its ordinary meaning, a "determination" is a "final and definitive" decision
that results from some kind of deliberative process and leads to a significant consequence. 438 T h e
United States finds contextual support for this inte rpretation in the final clause of Article 23.2(a),
which requires that determinations be consistent with the recommendations and rulings of the DSB,
and thus confirms that a determination must be fi nal and definitive. The United States argues that its
statements made at the DSB meetings did not cons titute a "determination", because these statements
did not embody any definitiveness or finality and were, instead, punctuated with equivocation. Due to
the complexity of making any good faith attempt to examine the European Communities' claim that
Directive 2003/74/EC is consistent with the SPS Agreement, the United States needed time for review
and could not be expected to have made a determination within a mere few weeks of the notification
of Directive 2003/74/EC by the European Commun ities. Turning to the negotiating history of
Article 23.2(a), the United States maintains that the "determination" that the negotiators intended to
target under Article 23.2(a) was of the type and na ture of the unilateral de terminations made under

434United States' other appellant's submission, para. 66.
435Ibid.
436Ibid., para. 69.
437Ibid., para. 70.
438Ibid., paras. 74-78.

Section 301 of the United States Trade Act of 1974 439, which were made at the conclusion of formal
investigations and which resulte d in certain legal consequences. 440 In addition, the United States
contends that subjecting Members' DSB statements, which "are generally diplomatic or political in
nature and prepared ... independe ntly of any ... deliberative pro ceedings", to the discipline of
Article 23.2(a) "will undoubtedly result in a 'chilling' effect on those statements".441
194. Furthermore, the United States alleges that a "determination" within the meaning of
Article 23.2(a) cannot be inferred or implied, and the Panel erred in making such an inference from
the United States' "inaction" regarding the suspension of concessions. 442 The United States adds that
the Panel's inference "effectively reads into Artic le 23 a deadline by which a determination will be
imputed to a Member" 443, even though Article 23 contains no such deadline and the Panel itself
struggled to identify the proper timeframe after which the "continuation of suspension" would be
considered to be inconsistent with Article 23. For the United States, "[t]he Panel's findings appear[ed]
to require complaining parties and other Members to be silent in the face of a claim of compliance or
risk having any reaction other than agreemen t be construed to be a 'determination'." 444 The United
States additionally observes that, "even if the reac tion is not sufficient to be a 'determination', it
appears that a Member would risk such a reaction ri pening into a 'determination' based simply on the
passing of an unspecified deadline, which the Panel acknowledged does not exist."445
4. The Scope of the Panel's Mandate and the Panel's Suggestion
195. In the event the Appellate Body upholds the Panel's findings under Articles 23.2(a) and 23.1,
the United States requests the Appellate Body to reverse the Panel's "erroneous suggestion"446 that the
United States must bring itself into conformity by having recourse to the rules and procedures of the
DSU without delay. The United States contends th at the Panel engaged in a detailed review of
Directive 2003/74/EC and its consistency with both the DSB's recommendations and rulings and the
SPS Agreement. Thus, recourse to the rules and procedur es of the DSU has already been achieved,
because "a fair and objective reading of the language in Articles 23.1 and 23.2(a) does not exclude
instances"
447 in which a Member may "have recourse" by participating in a dispute settlement
proceeding initiated by another WTO Member, as the United States did in this dispute. The United

439United States Trade Act of 1974, Public Law No. 93-618, 88 Stat. 1978 (1975), United States Code,
Title 19, section 2101.
440United States' other appellant's submission, para. 88.
441Ibid., paras. 93 and 95.
442Ibid., paras. 98-104.
443Ibid., para. 105.
444Ibid., para. 106.
445Ibid., para. 106.
446Ibid., para. 108.
447Ibid., para. 111.

States observes that requiring re-litigation of the matters that have already been "reviewed and
considered"
448 in these proceedings would not be an e fficient use of the WTO dispute settlement
system, and would be contrary to the objective of "prompt settlement" of disputes set out in
Article 3.3 of the DSU.
196. The United States further submits that the Panel erred in finding that it had no jurisdiction to
rule on the compatibility of Directive 2003/74/EC with the SPS Agreement. The United States argues
that the Panel improperly limited the scope of its mandate on the basis that the European
Communities had articulated its cl aim under Article 22.8 as a conditiona l claim. The United States
asserts that "[a] panel's terms of reference, once de termined at the outset of the dispute, cannot be
narrowed or otherwise modified by a complaining party." 449 According to the United States, the
relevant provision governing the term s of reference of a panel is Article 7 of the DSU, which "does
not provide for a change to the terms of refere nce based on the complaining party's submissions". 450
Therefore, in the United States' view, this finding by the Panel should be re versed, and the Panel's
findings regarding the WTO-inconsistency of Di rective 2003/74/EC, made in the context of
addressing the European Communities' second series of main claims, should be considered "direct"
findings.451
5. Conclusion
197. In sum, the United States requests the Appellate Body to: (i) reverse the Panel's findings that
the United States has acted inconsistently with Articl es 23.1 and 23.2(a) of the DSU; (ii) reverse the
Panel's suggestion that the United States should have recourse to the rules and procedures of the DSU
without delay; and (iii) reverse the Panel's conc lusion that it was not empowered to make a direct
determination of the consistency of Directive 2003/74/EC with the SPS Agreement . The United
States nevertheless clarifies that the Appellate Body need not reach the last two issues if it reverses
the Panel's findings that the United States has acted inconsistently with Articles 23.1 and 23.2(a) of
the DSU.
E. Claims of Canada – Other Appellant
198. Canada requests the Appellate Body to revers e the Panel's finding that Canada has acted
inconsistently with Articles 23.1 and 23.2(a) of the DSU by maintaining the suspension of
concessions after the notification of Directive 2003 /74/EC by the European Communities. Canada

448United States' other appellant's submission, para. 113.
449Ibid., para. 117.
450Ibid.
451Ibid., para. 119.

submits that the Panel erred in addressing the Eu ropean Communities' claims of violation under
Articles 23.1 and 23.2(a) completely separately from the requirements of Article 22.8 of the DSU.
Even if the Panel did not err in examining Article 23 in isolation from Article 22.8, Canada argues
that the Panel erred in finding that Canada h as breached Articles 23.1 and 23.2(a) by seeking the
redress of a violation without recourse to the rules and procedures of the DSU.
1. The Panel's Examination of Articles 23 .1 and 23.2(a) "In Isolation" from
Article 22.8 of the DSU
199. Canada alleges that the "fundamental legal error" 452 of the Panel is its examination of the
European Communities' claim under Articles 23.1 a nd 23.2(a) in isolation from its analysis under
Article 22.8 of the DSU. According to Canada, th e "[k]ey to this case is Article 22.8 of the DSU" 453,
which, as lex specialis applicable to the post-retaliation phase of a dispute, sets out the three
conditions that must be met in order to have the suspension of concessions terminated, one of the
conditions being actual compliance with the DSB's recommendations and rulings. Canada maintains
that the "continuous involvement of the DSB", pursuant to the second sentence of Article 22.8,
"suggests that [the DSB] retains jurisdiction ove r the matter until its recommendations and rulings
have been fully implemented". 454 Canada explains that "[t]hi s is consistent with the ongoing
obligation on the Member being re taliated against to comply with its WTO obligations, including the
requirement to comply promptly with the recommendations and rulings of the DSB."455
200. As regards Article 23, Canada submits that this provision begins by setting out general
obligations that apply to what it refers to as the pre-dispute settlement stage of a dispute and then
proceeds by setting out specific obligations ( lex specialis ) applicable through the compliance and
retaliation stages of dispute settlement proceedings. Whereas the examples of prohibited unilateral
conduct contained in Article 23.2 are not exhaustive, the structure of the Article indicates that, when a
particular dispute has entered the compliance or retaliation stages, the relevant obligations are those in
subparagraphs (b) a nd (c) of Article 23.2, a nd the general obligations contained in Articles 23.1
and 23.2(a) are no longer pertinent. Indeed, Ca nada observes, the only way for a complaining
Member to have reached the compliance or retaliation stage is to have already satisfied those general
obligations by having engaged in the WTO disput e settlement process and obtained a DSB ruling that
the responding Member has violated its obliga tions. Canada additionally notes that the travaux
préparatoires provide a further indication that the DSU negotiators did not contemplate that
Article 23 would apply to a post-reta liation situation. Canada thus argues that, in this case, since it

452Canada's other appellant's submission, para. 6.
453Ibid., para. 35.
454Ibid., para. 36.
455Ibid. (footnote omitted)

has had recourse to the rules and procedures of the DSU in the EC – Hormones dispute and is
suspending concessions pursuant to a DSB authorizati on, Canada has already satisfied the obligations
contained in Articles 23.1 and 23.2(a). Therefore, as suggested by the text of Article 23.2(c), the
Panel should have turned first to the provisions of Article 22, including the specific requirements of
Article 22.8 that apply to the question of whether the suspension of concessions should be terminated.
By failing to do so, the Panel's approach resulted in "contradictory findings"
456 that, on the one hand,
Canada has breached Articles 23.1 and 23.2(a) of the DSU by continuing the suspension of
concessions and, on the other hand, that Canada has the right to continue the suspension of
concessions pursuant to Article 22.8 because the Eu ropean Communities' inconsistent measure has
not been removed.
201. Canada asserts, moreover, that the Panel failed to consider the object and purpose of the DSU.
By considering Article 23 in isolation from other pr ovisions of the DSU, the Panel arrived at findings
that ultimately lessen the effectiven ess of the WTO dispute settlement mechanism. The result is that
"a non-compliant WTO Member could avoid the duly authorized suspension of concessions by
another Member merely by adopting an alleged im plementing measure, notifying such measure to the
DSB and waiting to be challenged."
457 In Canada's view, such a re sult has the effect of undermining
DSB-authorized retaliation, thereby weakening an important incentive for Members to bring their
measures promptly into compliance. Canada conte nds that only a further multilateral determination
of compliance by the DSB can set aside the DSB's prior authorization to suspend concessions. In
Canada's view, the European Communities has the bur den of initiating a panel proceeding—either an
Article 21.5 proceeding or a de novo action against the suspension of concessions—to obtain such a
multilateral determination.
202. Canada further maintains that, in examini ng the European Communities' claims under
Articles 23.1 and 23.2(a) of the DSU in isolation from its examination of Article 22.8, the Panel
erroneously followed the order of analysis proposed by the European Communities, even though such
order of analysis is contrary to the principle of lex specialis, according to which the specific terms of
a treaty must prevail over the general provisions. 458 The application of the lex specialis principle
should have led the Panel to begin its analysis by determining whether the conditions for the

456Canada's other appellant's submission, para. 43.
457Ibid., para. 47.
458Ibid., paras. 52-57. Canada refers to the Appellate Body's statement in Canada – Wheat Exports and
Grain Imports that "panels are free to structure the order of thei r analysis as they see fit" but they "may find it
useful to take account of the manner in which a claim is presented to them" by the complaining party; however,
Canada contends that "panels must be careful not to simply follow the order of analysis as pleaded by a
complainant", which may itself contain errors of law, especially if th e relationship between two provisions
mandates a certain sequence of analysis. ( Ibid., paras. 54 and 55 (quoting Appellate Body Report, Canada –
Wheat Exports and Grain Imports, paras. 109 and 126))

termination of the suspension of concessions set out in Article 22.8 have been met. Canada
criticizes the Panel for using "two different and in consistent manners of identifying the [European
Communities'] implementing measure at issue". 459 Canada explains that, while examining the second
series of the European Communities' main claims, th e Panel gave a broad interpretation to the term
"measure" in Article 22.8 of the DSU and recognized that the phrase "until such time as the measure
found to be inconsistent with a covered agreement has been removed" means that the "illegality itself"
and not only the originally impugned measure had been removed. By contrast, in its approach to the
first series of the European Communities' main clai ms, the Panel based its finding of a violation of
Articles 23.1 and 23.2(a) of the DSU on the fact that the European Communities had notified a
measure that had not yet been subject to dispute settlement.
203. Canada also criticizes the Panel for ignoring the procedural history of the case. According to
Canada, Directive 2003/74/EC should be situated in the post-retaliation context and should not be
considered as "a new measure ab initio".
460 Given that Canada had obtained DSB authorization to
suspend concessions, the onus should be placed on the European Communiti es to demonstrate its
compliance to a WTO panel. The Panel's findings that Canada has breached Articles 23.1 and 23.2(a)
lead to a "manifestly absurd or unreasonable" interp retation that the mere adoption and notification of
an alleged implementing measure by a WTO Member , which failed to bring itself into compliance
within the reasonable period of time, could render the suspension of concessions authorized by the
DSB inconsistent with the DSU. Canada asser ts that the Panel's finding under Articles 23.1
and 23.2(a) renders ineffective the substantive re quirements set out in Article 22.8 regarding the
suspension of concessions, contrary to the prin ciple of effectiveness that should govern treaty
interpretation.
2. The Panel's Findings under Article 23.1 of the DSU
204. Canada contends that, even if the Panel was correct in considering Articles 23.1 and 23.2(a)
in isolation, the Panel erred in finding that Canada was "seeking the redress" of a WTO violation by
continuing the suspension of concessions in respect of a measure that had not yet been subject to
recourse to the DSU. According to Canada, the Panel's finding ignored the fact that Canada had
"sought and obtained"
461 DSB authorization to suspend concessi ons as a result of the inconsistencies
found in EC – Hormones , and that Canada has taken no action to "seek the redress" of any alleged
WTO-inconsistency of the European Communities' purported implementing measure. Canada further
asserts that simply because Directive 2003/74/EC is a new measure does not imply that the legal basis

459Canada's other appellant's submission, para. 63.
460Ibid., para. 64.
461Ibid., para. 80.

for Canada's continued suspension of concessions ha s changed and that the suspension is now aimed
at seeking the redress for any violations caused by Directive 2003/74/EC. Because Canada's
suspension of concessions was authorized by the DSB, it is "by definition"
462 WTO-consistent. In
Canada's view, "[t]he Panel e rred in imputing alleged WTO inconsistencies of the [European
Communities'] purported implementing measure as the reasons for Canada's continued suspension of
concessions in this case." 463 Such an outcome would, in Canada's view, severely hinder the security
and predictability of the WTO dispute settlement system, as Members would be unsure as to when, or
for how long, they could properly rely on a DSB authorization to suspend concessions.
3. The Panel's Findings under Article 23.2(a) of the DSU
205. Furthermore, Canada alleges that the Panel e rred in finding that Canada made a unilateral
determination that a violation occurred in relation to Directive 2003/74/EC, contrary to
Article 23.2(a), on the basis of Canada's statements at the DSB meetings and its continued application
of the suspension of concessions. According to Cana da, there is an insufficient amount of "firmness
or immutability" with respect to the statements made by Canada at the DSB meetings for the Panel to
conclude that Canada made "more or less a fina l decision" regarding the WTO-inconsistency of
Directive 2003/74/EC. 464 Canada also argues that, because it had obtained DSB authorization to
suspend concessions, it did not see the need to take a decision regarding the WTO-consistency of
Directive 2003/74/EC, and that it was up to the European Communities to establish that it had
implemented the DSB's recommendations and rulings in EC – Hormones . Therefore, the Panel
erroneously found that Canada's continuation of the suspension of concessions "corroborate[d]" 465 the
fact that Canada made a determination of viola tion in relation to Directive 2003/74/EC, because it is
the DSB's authorization, rather than Canada's expression of views on the WTO-consistency of this
Directive, that formed the basis of Canada's continued suspension of concessions.
4. The Scope of the Panel's Mandate and the Panel's Suggestion
206. Finally, should the Appellate Body uphold the Panel's finding that Canada has breached
Articles 23.1 and 23.2(a) of the DSU, Canada re quests the Appellate Body to reverse the Panel's
finding that it did not have jurisdiction to determ ine the compatibility of Directive 2003/74/EC with

462Canada's other appellant's submission, para. 84.
463Ibid., para. 80. Canada adds that the Panel's finding is flawed because it was not based on the notion
of malfeasance ( ibid., para. 81 (referring to Panel Report, EC – Commercial Vessels , para. 7.188)) but, rather,
was based on the notion of "non-feasance, whereby Canada's inaction, i.e., failure to terminate its suspension of
concessions following the notification of [Directive 2003/74/EC] would be construed as 'seeking redress' of a
violation pursuant to Article 23.1 of the DSU." (Ibid., para. 81)
464Ibid., paras. 87-89 (quoting Panel Report, US – Section 301 Trade Act , footnote 657 to para. 7.50;
and referring to statements made at the DSB meetings held on 7 November and 1 December 2003).

the SPS Agreement. Canada explains that the Panel speci fically acknowledged that Article 22.8 of
the DSU required it to consider, as a condition preced ent to finding a breach of this provision by
Canada, the consistency of Di rective 2003/74/EC with the SPS Agreement . In addition, Canada
considers that this finding contradicts the Pane l's finding that was made in the context of its
examination of the European Communities' second seri es of main claims. In that context, the Panel
found that Canada has not breached Article 22. 8, because the European Communities has not
removed the inconsistency found in EC – Hormones.
207. Canada further requests the Appellate Body to reverse the Panel's suggestion that Canada
should have recourse to the rules and procedures of the DSU without delay. Canada asserts that the
Panel's suggestion ignores the fact that, earlier in its report, the Panel conducted an extensive review
of the compatibility of the European Co mmunities' implementing measure with the SPS Agreement.
Nor does such recommendation contribute to a "pro mpt settlement" of the dispute as required by
Article 3.3 of the DSU, because it would require a new panel proceeding to look at an issue that is
already being dealt with in the c ontext of the current proceedings. Finally, in Canada's view, this
suggestion is contradictory to the Panel's findings under Article 22.8, and its statement that it was
performing a function similar to that of an Article 21.5 panel. The suggestion is also inconsistent with
Article 19.2 of the DSU, because it diminishes Canada 's right to suspend concessions pursuant to the
authorization given by the DSB.
5. Conclusion

208. In sum, Canada requests the Appellate Bo dy to reverse the Panel's findings under
Articles 23.1 and 23.2(a) of the DSU that Canada wa s "seeking the redress" of a violation and made a
"determination" of violation with respect to Di rective 2003/74/EC. Canada requests the Appellate
Body to find, instead, that: (i) Articles 23.1 and 23. 2(a) of the DSU do not apply to a situation where,
following the adoption of an alleged implementing measure after the reasonable period of time has
elapsed, a Member continues the suspension of concessi ons pursuant to the DSB's authorization; (ii)
Canada has not acted inconsistently with Ar ticles 23.1 and 23.2(a) because the European
Communities failed to demonstrate that it brough t itself into compliance, in accordance with
Article 22.8 of the DSU; and (iii) the Panel erre d in finding that it was bound by the manner in which
the European Communities presented its two main claims. Should the Appellate Body uphold the
Panel's findings under Articles 23.1 and 23.2(a) of th e DSU, Canada requests the Appellate Body to
reverse the Panel's finding that it did not have jurisdiction to determine the compatibility of

Directive 2003/74/EC with the covered agreements, a nd to remove the suggestion that Canada should
have recourse to the rules and procedures of the DSU without delay.
466
F. Arguments of the European Communities – Appellee
209. The European Communities submits that the Pane l correctly found that the United States and
Canada have breached Articles 23.1 and 23.2(a) of the DSU by maintaining the suspension of
concessions after the notification of Directive 2003/74/EC, and requests the Appellate Body to
dismiss Canada's and the United States' other appeals "in their entirety".467
210. The European Communities makes two preliminary arguments. First, the European
Communities observes that the United States a nd Canada do not appear to dispute that
Directive 2003/74/EC is a "measure taken to comp ly with the recommendations and rulings" of the
DSB in the EC – Hormones dispute. Secondly, the European Communities asserts that the United
States and Canada "entirely ignore" 468 the fact that the European Communities' first series of main
claims included Article 21.5, but did not incl ude Article 22.8 of the DSU. The European
Communities adds that the error in the Panel's r easoning was to ignore Article 21.5, rather than
Article 22.8, as the United States and Canada a llege, although this error does not undermine the
correctness of the Panel's conclusions of violation of Articles 23.2(a) and 23.1.
1. The "Harmonious" Interpretation of Articles 21, 22, and 23 of the DSU in the
Post-Suspension Stage of a Dispute
211. The European Communities maintains th at the "general and fundamental" 469 provisions of
Article 23 of the DSU apply throughout the implementation stage of a dispute. The European
Communities rejects the distinction made by Canada between "a new measure ab initio" and
"a measure taken" 470 to implement the DSB's recommendati ons and rulings, as well as Canada's
assertion that Articles 23.1 and 23.2(a) apply only to a new measure. The European Communities
submits that such a distinction lacks a textual basis in the covered agre ements. The European
Communities recalls that Article XVI:4 of the WTO Agreement requires Members to ensure the
conformity of their laws with their WTO obligations, and maintains that, in the light of this provision,
the multilateral dispute settlement system "relie s on good faith compliance and the presumption of
conformity of measures taken by WTO Members" 471, which does not change in the post-retaliation

466Canada's other appellant's submission, paras. 99-101.
468Ibid., para. 29.
469Ibid., para. 36.
471Ibid., para. 40.

stage of a dispute. Therefore, the European Communities argues, where a Member has taken a
measure to implement the DSB's recommendations and rulings, the Member suspending the
concessions bears the burden of proving the WTO- inconsistency of the implementing measure. 472
The general burden of proving that a measure is WTO-inconsistent cannot be reversed simply because
the original complainant has taken retaliatory measures. The European Communities additionally
contends that Canada, by stating th at "Article 23.1 is concerned with measures in respect of which no
WTO dispute settlement proceedings have taken place"473, effectively reduces the scope of application
of Article 23.1 and makes it "essentially meaningless in the implementation stage".474
212. The European Communities further submits that the interpretation of Articles 21 and 22,
referenced in Article 23.2(b) and (c), should no t change depending on the stage of the dispute
settlement process, including when the dispute reac hes the post-suspension stage. The European
Communities asserts that the lex specialis applicable to its first series of main claims is Article 21.5,
and not Article 22.8, as Canada argues. Article 22.8 "was part of and context for" 475 the European
Communities' second series of main claims. The European Communities emphasizes that
Directive 2003/74/EC, as a measure taken to comply, must be presumed to be compliant with the
covered agreements until shown ot herwise through an Article 21. 5 proceeding. The European
Communities maintains that a Member suspending concessions must ensure that the suspension
"complies at all times with the condi tions laid down in Article 22.8".
476 On this basis, the European
Communities argues that the adoption of a measure taken to comply triggers the following duties of
the original complaining party: (i) to cease the su spension of concessions; (ii) to form a view on
whether the measure found to be inconsistent has been removed; and (iii) to have recourse to
Article 21.5 proceedings if it considers that the meas ure taken to comply is not consistent with the
covered agreements. The European Communities considers that its understanding of Members'
obligations in the post-suspension stage results from a "harmonious" 477 interpretation of Articles 21,
22, and 23 of the DSU that gives effect to ea ch of these provisions. The European Communities
emphasizes that the WTO dispute settlement syst em is based on adversarial procedures where a
Member claims the inconsistency of a measure take n by another Member, and is not applicable to
requests for an abstract confirmation of the consistency of a measure.
213. The European Communities maintains that the object and purpose of the DSU, according to
Articles 3.7 and 3.3, is to secure a positive solution to, and prompt settlement of, a dispute. Thus, the

474Ibid., para. 43.
475Ibid., para. 51.
476Ibid., para. 62.
477Ibid., para. 36.

United States' and Canada's suggestion that they can simply wait until the European Communities
brings a dispute to prove the consistency of its implementing measure goes fundamentally against the
object and purpose of the DSU. The European Communities emphasizes that, upon the adoption of a
measure taken to comply, the Member suspending concessions is required to cease the application of
the suspension while it fulfils its obligation to ha ve recourse to dispute settlement procedures under
Article 21.5. Such an interpreta tion is consistent with the functio n of the dispute settlement system,
which is for adjudicating disputes and not for main taining retaliatory measures where a measure to
comply is taken in good faith. The European Communities disagrees with the United States' and
Canada's argument that the European Communities' interpretation would fail to give effect to
Article 22.8 of the DSU. It explains that, on th e contrary, where a good faith measure has been taken
to comply, as the European Communities did in this case by adopting Directive 2003/74/EC, there is
no legitimate interest in continuing the suspension of concessions, because the suspension would have
achieved its objective and the suspension "does nothing to induce compliance".
478 The European
Communities additionally submits that allowing a Me mber to continue the suspension of concessions
despite the adoption of a measure taken to comply effectively allows that Member to "extort" 479 more
than what it is entitled to under the covered ag reements. By maintaining the suspension of
concessions, the United States and Canada "in truth" 480 wish to see the European Communities
remove the import ban imposed on meat treated with hormones, even though removal of the ban is not
required under the covered agreements as long as the ban is based on a risk assessment consistent with
the SPS Agreement. Finally, the European Communities submit s that its position is consistent with
the approach taken in the Articles on Responsibility of States for Internationally Wrongful Acts481 (the
"Articles on State Responsibility"), which require that countermeasures be suspended if the
internationally wrongful act has ceased and the dis pute is pending before a tribunal that has the
authority to make decisions binding upon the parties.482
214. The European Communities sums up its position on the proper interpretation of
Articles 21, 22, and 23 as follows. The fact that the suspension of concessions was authorized, and
subsequently also applied, does not change the pr oper interpretation and application of Articles 21
and 23. The original complaining Member rema ins under an obligation to have recourse to a
compliance procedure under Article 21.5 if it disagrees with the existence or consistency of a measure

479Ibid., para. 83.
480Ibid., para. 84.
481Articles on Responsibility of States for Internationally Wrongful Acts, adopted by the International
Law Commission at its fifty-third session (2001) (Exhibit EC-136 submitted by the European Communities to
the Appellate Body), Article 52.3. The text of the Articles are annexed to United Nations General Assembly
Resolution, A/RES/56/83, 29 January 2002 (Exhibit EC-135 submitted by the European Communities to the
Appellate Body).
482See European Communities' appellee's submission, paras. 94-96.

taken to comply with a covered agreement. If it fails to do so, and simply waits and continues to
apply the suspension of concessions, it necessaril y is seeking redress and makes a unilateral
determination that a violation has occurred in respect of the implementing measure within the
meaning of Articles 23.2(a) and 23.1. In such a situ ation, the continued application of the suspension
of concessions is simultaneously, first, evidence that the original complaining Member disagrees with
the existence or consistency with a covered agreement of the measur e taken to comply while refusing
to have recourse to a compliance procedure under Article 21.5 (thus, making a "determination" that
the new measure is WTO-inconsistent); and, secondly, a breach of Article 23.1, read together with
Articles 22.8 and 3.7, because it seeks redress followi ng its unilateral determination that the measure
found to be inconsistent with the covered agreements has not been removed.
2. The Panel's Findings under Article 23.1 of the DSU
215. With respect to the Panel's finding that the Un ited States is seeking the redress of a violation
within the meaning of Article 23.1, the European Communities recalls the United States' contention
that the Panel erroneously re-characterized the suspension of concessions as now directed against
Directive 2003/74/EC. The European Communities asser ts that this contention is without merit,
because the United States could no longer maintain its suspension of concessions once the European
Communities had removed Directive 96/22/EC. The Panel confirmed the removal of
Directive 96/22/EC, and the United States has not app ealed this finding. Additionally, the European
Communities argues that "the United States ignores that there is a presumption of good faith
compliance by WTO Members", and that the adopti on of an implementing measure in good faith
"triggers" an obligation to remove the suspen sion of concessions and requires the complaining
Member to initiate Article 21.5 proceedings in case there is disagreement as to the WTO-consistency
of the new measure.
483 The European Communities observes, mo reover, that "even the United States
acknowledged that it was maintaining its suspension of concessions against the new measure".484 The
European Communities further submits that, contrary to the United States' assertion, the Panel's
finding does not lead to a paradoxical result that th e authorized suspension of concessions can be both
consistent and inconsistent with the covered agreements at the sa me time. Rather, the European
Communities argues, the suspension of concessions was initially WTO-consistent, and subsequently
became WTO-inconsistent in the light of the notif ication of Directive 2003/74/EC and the removal of
the measure found to be WTO-inconsistent in EC – Hormones , namely, Directive 96/22/EC.
Therefore, the continued application of sanctions in the presence of a compliance measure that the
DSB has not found to be WTO-inconsistent implies that a Member is seeking to redress a violation.

483European Communities' appellee's submission, para. 104. (emphasis omitted)
484Ibid., para. 106 (referring to Panel Report, US – Continued Suspension , paras. 7.219-7.221 and
footnote 438 thereto).

216. Turning to the Panel's finding that Canada is seeking the redress of a violation within the
meaning of Article 23.1, the European Communitie s disagrees with Canada's argument that the
notification of Directive 2003/74/EC does not change the legal basis of Canada's suspension of
concessions. The European Communities submits that, contrary to Canada's assertion, Article 22.8 of
the DSU does not specify that it is for the respon dent to show that it has removed the original
measure. According to the Eur opean Communities, "[i]f anything, Article 22.8 of the DSU seems to
indicate that such an assessment should be carried out by the complaining Member, since it is the one
suspending concessions".
485 The European Communities adds that the use of the passive tense in the
phrase "[t]he suspension of concessions ... shall only be applied" appears to indicate the obligation for
the Member suspending concessions to terminate tho se measures when the orig inal measure has been
removed. The European Communities contends that, in any event, it has effectively shown that the
inconsistent measure, namely, Directive 96/33/EC , was removed, and both the Panel and Canada
recognized that Directive 2003/74/EC was a different measure.
3. The Panel's Findings under Article 23.2(a) of the DSU
217. As regards the Panel's finding that the United States made a determination within the meaning
of Article 23.2(a), the European Communities consid ers that the United States' appeal is based on a
"wrong reading of the Panel's findings", because th e Panel did not make its finding based only on the
statements made by the United States at the DSB meetings.486 Instead, the Panel took into account the
statements made by the United States at the DSB mee tings and its decision to maintain its suspension
of concessions as evidence that the United States had made a "determination" prohibited by
Article 23.2(a) of the DSU. 487 The European Communities disagrees with the United States that the
statements made at the DSB meetings lacked de finitiveness. On the contrary, the United States
expressed a "definitive judgement"488 concerning the WTO-consistency of Directive 2003/74/EC. The
European Communities dismisses the United States ' argument that it could not have made a
determination within weeks of the notification of Directive 2003/74/EC, contending, instead, that the
term "determination" does not contain any tempor al connotation. The Eu ropean Communities also
disagrees with the United States' view that the Pane l inferred the existence of a "determination" from
inaction. According to the Eur opean Communities, the United Stat es "actively considered" that
Directive 2003/74/EC was WTO-inconsistent a nd "actively continued" the suspension of
concessions.489 The European Communities further submits that, even if the negotiators of the DSU
referred to Section 301 of the United States Trade Act of 1974, they did so as an example that was not

486Ibid., para. 119.
487Ibid., para. 122. (original emphasis)
488Ibid., para. 126. (original emphasis)
489Ibid., para. 133. (emphasis omitted)

intended to be an exhaustive illustration of the t ypes of unilateral conduct prohibited by Article 23.
The European Communities, moreover, rejects the Un ited States' contention that statements made at
DSB meetings are diplomatic in na ture and have no legal effects, referring to the Appellate Body's
observation in US – Upland Cotton (Article 21.5 – Brazil) that certain statements by the United States
Government indicated that it was taking a measure for the purpose of complying. 490 Additionally, the
European Communities notes that the United States' st atements at the DSB meetings occurred in the
particular context of seeking redress of a violation by continuing its application of sanctions against
the European Communities. The Eu ropean Communities also rejects the United States' argument that
the Panel failed to establish when the United St ates had made a determination in breach of
Article 23.2(a). In the European Communities' view, the Panel properly observed that the deadline by
which a Member shall have recourse to the DSU in accordance with Article 23 "was not an issue
before the Panel".491
218. The European Communities further argues that th e Panel correctly found that Canada made a
determination to the effect that a violation has o ccurred within the meaning of Article 23.2(a). The
European Communities maintains that Canada's statem ents at DSB meetings that it was not removing
the suspension of concessions, together with the fact that it has maintained the suspension of
concessions, provide a sufficient amount of firmness or immutability indicatin g that Canada made a
more or less final decision regarding the WTO-inconsistency of Directive 2003/74/EC. The European
Communities explains that, because it had notified a new measure, which was different both legally
and in substance, Canada needed to take a fina l decision regarding its conformity with the WTO
agreements, which it did (as confirmed by its stat ements and the continuation of its suspension of
concessions, as concluded by the Pa nel), and thus Canada made a "determination" in the sense of
Article 23.2(a) without having recourse to the DSU.
4. The Scope of the Panel's Mandate and the Panel's Suggestion
219. Finally, the European Communities reiterates that, by ignoring the sequence of the legal
claims made by the European Communities, the Pane l exceeded its terms of reference in examining
the consistency of Directive 2003/74/EC with the SPS Agreement, contrary to Articles 7 and 21.5 of
the DSU. 492 Moreover, the European Communities rep eats its request that the Appellate Body
improve the Panel's suggestion—that the United Stat es and Canada should have recourse to the rules
and procedures of the DSU—by making it explicit that they must resort to Article 21.5 proceedings
and cease the suspension of concessions without delay.

490European Communities' appellee's submission, para . 131 (referring to Appellate Body Report, US –
Upland Cotton (21.5 – Brazil), para. 204).
492See supra, paras. 55-58.

G. Arguments of the Third Participants
1. Australia

(a) Procedural Issue – Public Observation of the Oral Hearing
220. Australia supports the request of the particip ants to allow public observation of the oral
hearing in these proceedings. Australia considers that enhancing the transparency of WTO dispute
settlement proceedings can enhance the credibility of the dispute settlement system, and endorses the
participants' arguments as to the value of open h earings. Australia submits that, although the first
sentence of Article 17.10 "would seem to preclude a re quest that hearings of the Appellate Body be
held in public", this provision must be read togeth er with other provisions in the DSU, in particular,
Article 17.10, second sentence, Article 17.14, and Article 18.2. 493 According to Australia, "[i]n order
to allow meaning to be given to these other provisions, the apparent in junction in the first sentence of
Article 17.10 cannot be absolute." 494 Australia observes that Article 17.10, second sentence, foresees
that Appellate Body reports will contain sufficient information concerning the parties' statements and
arguments to provide a basis for the Appellate Body 's findings. It adds that the requirement in
Article 17.14 that Appellate Body reports be ci rculated to WTO Members prior to adoption "would
not be possible if the first sentence of Article 17.10 imposed an absolute requirement of
confidentiality".495 Australia also refers to Article 18.2 of the DSU and states that there is no
difference between parties disclosing statements c ontemporaneously by publishing them on a website
and disclosing them by making them in an open h earing. Finally, Australia observes that in the
absence of an express prohibition in the DSU precl uding an open hearing, the Appellate Body should
authorize the participants' request, which "would be fully consonant with the object and purpose of the
DSU".496
(b) Articles 21, 22, and 23 of the DSU
221. Australia submits that, although the DSU do es not expressly provide procedures to be
followed in the post-retaliation stage of a dispute, par ties' actions should continue to be guided by the
following two fundamental principles: (i) multilateral determination of non-compliance; and (ii) that
the party asserting non-compliance bears the burden of establishing a prima facie case.
222. Australia asserts that Article 23.1 of the DSU establishes an over arching obligation for
Members to have recourse to the rules and procedur es of the DSU, including Article 21.5 of the DSU.

493Australia's comments on participants' request for an open hearing, p. 1.
494Ibid., p. 2.
495Ibid.
496Ibid.

Australia emphasizes that Article 21.5 is the govern ing provision in cases of disagreement regarding
the WTO-consistency of a measure taken to comp ly with the DSB's recommendations and rulings,
and it also applies to disagreements as to whether an inconsistent measure has been removed within
the meaning of Article 22.8 of the DSU. Thus, Au stralia agrees with the European Communities that
the disagreement regarding whether Directiv e 2003/74/EC removed the measure found to be
inconsistent with the covered agreements in EC – Hormones should have been resolved through
recourse to Article 21.5 panel proceedings. On this basis, Australia submits that the Panel erred in
finding that the procedure under Article 21.5 of th e DSU could be merely one of the mechanisms
available.
223. Australia notes that the DSU is silent as to whether the suspension of concessions should
cease when disputes arise regarding the removal of an inconsistent measure within the meaning of
Article 22.8. According to Australia, it is ope n to a Member to continue the suspension of
concessions pending the outcome of the Article 21.5 panel proceedings. Despite recognizing that
Article 21.5 does not expressly address the issue of which party may initiate Article 21.5 proceedings,
Australia argues that the Panel erred in relying on the unadopted panel report in EC – Bananas III
(Article 21.5 – EC) for its finding that "proceedings under Article 21.5 are [not] open only to the
original complainant."497
224. Australia notes that panels cannot rule on cl aims that have not been brought by the
complaining party. Australia argues that none of the provisions of the SPS Agreement were within
the Panel's terms of reference, and the Panel had no jurisdiction to consider the consistency of
Directive 2003/74/EC with that Agreement. Au stralia contends that allowing claims under the
SPS Agreement in this dispute would effectively reverse the burden of proof between the parties and
"is inconsistent with the fundamental principl e ... that the party asserting non-compliance with a
covered agreement bears the burden of establishing a prima facie case".498
(c) The Panel's Selection of Experts
225. Australia agrees with the argument of the Eur opean Communities that panels must observe
due process in both selecting and consulting with e xperts. Australia contends that fundamental
fairness and due process "permeates all aspects of the WTO dispute settlement process, including a
panel's use of experts". 499 Australia then maintains that the principle of due process equally informs
Articles 11 and 13.2 of the DSU and Article 11.2 of the SPS Agreement and that, in selecting and

497Australia's third participant's submission, paras. 11-13 (quoting Panel Report, US – Continued
498Ibid., para. 25.
499Ibid., para. 48.

consulting experts under these provisions, a panel is "duty bound to ensure that due process is
respected".
500
226. Citing the Appellate Body's finding in US – 1916 Act that the discretionary authority to grant
enhanced participatory rights to third parties is "circumscribed, for example, by the requirements of
due process"501, Australia submits that a panel's discretion in the use of experts under Article 13.2 of
the DSU and Article 11.2 of the SPS Agreement must be similarly circumscribed by the requirements
of due process. Due process, Australia argu es, requires that panels "seek, and take full account of,
the views of the parties on the types of experts re quired and the suitability of individual experts". 502
They must also take full account of the views of the parties on the substance of the advice to be
sought from the experts and must not seek advice from any particular expert on matters outside their
field of expertise. WTO Members have recognized in the Rules of Conduct that experts must be
"independent and impartial" and "avoid direct and indirect conflicts of interest".503
(d) Articles 5.1 and 5.7 of the SPS Agreement
227. Australia asserts that the SPS Agreement balances the right to take measures to protect
human, animal, or plant life or health against the tr ade liberalization goals of the WTO. It adds that
"[t]his balance cannot be maintain ed if panels fail to apply ap propriate standards of review." 504
Australia therefore agrees with the European Co mmunities that the application of the appropriate
standard of review by panels is fundamental to their assessment of the consistency of a Member's
measure with its obligations under the SPS Agreement. The standard of review applicable in this case
refers to the nature and appropr iate intensity of scrutiny of a panel's evaluation of a Member's
regulatory judgement or an assessment made by a competent body relied upon by that Member. The
applicable standard of review addresses the thres hold circumstance in which a panel may legitimately
interfere in that judgement or factual assessment. As the Appellate Body has explained, the standard
of objective assessment of the facts provided in Article 11 of the DSU "precludes [either] a de novo
review or 'total deference' by a panel to the findings of a national authority". 505 Australia also agrees
with the European Communities that the appropriate standard of re view to be applied in a given
dispute shall be informed "by both Article 11 of th e DSU and the particular covered agreement(s) and
obligations at issue". 506 Australia argues that this is supported by the Appellate Body's finding in
US – Softwood Lumber VI (Article 21.5 – Canada) that the proper standard of review to be applied by

500Australia's third participant's submission, para. 49.
502Ibid., para. 51. (original emphasis)
503Ibid., para. 51.
504Ibid., para. 28.

a panel must "be understood in the light of the specifi c obligations of the relevant agreements that are
at issue".507
228. Australia maintains that the standard of review to be applied by panels "may vary between
different obligations under the SPS Agreement " and must reflect the "balance between regulatory
autonomy and international supervision" 508 that is reflected in that Ag reement. In Australia's view,
the most significant limitation imposed by the text of the SPS Agreement on a panel's fact-finding
jurisdiction is provided in Article 5.1. Artic le 5.1 imposes a "positive obligation on Members to
obtain and rely upon a risk assessment that is appropriate to the circumstances". 509 This obligation
requires that a "rigorous investigative and fact-finding process compulsorily precedes"510 any review
by a WTO panel of the relevant SPS measure. Theref ore, a panel may not "usurp the role of a risk
assessor"511 by conducting the risk assessment it self, because doing so would "nullif[y]" 512 the
competence retained by Members under Article 5.1 of the SPS Agreement and would amount to a
de novo review inconsistent with Article 11 of the DSU. According to Australia, panels must accord
"considerable deference (but not to tal deference)" to a Member's risk assessment where that Member
has performed a "comprehensive and transparent" risk assessment. 513 This is consistent with the
requirement in Article 5.1 that a risk assessment be "as appropriate to the circumstances". This
requirement suggests that risk assessors may tailor th eir risk assessment to the specific circumstances
of a case, and that a panel may not attempt to choose between such a ri sk assessment and an
alternative assessment that is not "similarly embedded"514 in the specific circumstances.
229. Australia submits that, where the available sci entific evidence may be susceptible to more
than one interpretation by a "qualified and respected source" 515, a panel must accord deference to a
Member's risk assessment, even where the panel's ow n preferred view appears to be supported by the
"'preponderant' weight of the evidence". 516 Accordingly, a panel must not interfere with a Member's
risk assessment solely because it might have drawn di fferent conclusions on the basis of the available
evidence, and must limit the scope of its review to determining whether "the risk assessor's decision
[is] objective and credible". 517 For these reasons, Australia agre es with the European Communities

507Australia's third participant's submission, para. 31 (quoting Appellate Body Report, US – Softwood
508Ibid., para. 34.
509Ibid., para. 35.
510Ibid., para. 36. (original emphasis)
511Ibid., para. 36.
512Ibid.
513Ibid.
514Ibid., para. 37.
516Ibid. (referring to Appellate Body Report, EC – Asbestos, para. 178).
517Ibid., para. 39.

that the Panel in this dispute misunderstood and mi sapplied the appropriate standard of review under
Article 5.1 of the SPS Agreement. Although the Panel may have be nefited from obtaining divergent
scientific views for purposes of its background understanding, it could not deliberately place itself in a
position whereby it could choose the scientific opini on it preferred. Yet, the Panel's various
statements suggest that the Panel erroneously cons idered that its role was "to choose a position from
among the different scientific views".
518 For example, the Panel stated that "its situation [was]
similar"519 to that of a risk assessor and that it "followe d the majority of experts expressing concurrent
views" or accepted the "most specific" or "best supported" 520 views among the experts. Australia
maintains that the Panel should have focused on "whether the European Communities' risk assessment
represented an objective and credible view"521 from a qualified and respected source.
230. In addition, Australia contends that a partic ular risk assessment may support a range of
possible measures, and that Members retain the discretion to select the most appropriate measure to
address a particular risk "taking into account the relevant circumstances and its appropriate level of
protection".522 Australia submits that the "fundamental importance of the non-trade objectives of SPS
measures" warrants "considerable deference" 523 by panels to the regulatory decision-making of
Members, in particular, where the scientific evidence supports more than one credible interpretation.
231. Furthermore, Australia shares the European Co mmunities' concerns regarding the relevance
attributed by the Panel to the existence of interna tional standards for four of the hormones subject to
the provisional ban. Although international standard s may be relevant in interpreting provisions of
the SPS Agreement, they are not "dispositive"524 of the meaning of these provisions and should not be
"elevated"525 to binding treaty obligations. For this r eason, Australia agrees with the European
Communities that the "existence of international sta ndards is not determinative of whether there is
sufficient evidence to conduct a risk assessment under the first requirement of Article 5.7." 526
Australia considers that the Panel's approach failed to adequately take into account Article 3.3 of the
SPS Agreement , which permits Members to take SPS measu res that result in a higher level of
protection than would be achieved by measures based on the relevant international standards.

518Australia's third participant's submission, para. 42.
519Ibid., para. 41 (quoting Panel Report, US – Continued Suspension , para. 7.418; and Panel Report,
Canada – Continued Suspension, para. 7.409).
520Ibid., para. 42 (quoting Panel Report, US – Continued Suspension , para. 7.420; and Panel Report,
Canada – Continued Suspension, para. 7.411).
521Ibid., para. 42.
522Ibid., para. 44 (referring to Panel Report, EC – Approval and Marketing of Biotech Products ,
para. 7.1525).
523Ibid., para. 45.
524Ibid., para. 54 (referring to Panel Report, EC – Approval and Marketing of Biotech Products ,
paras. 7.241, 7.300, and 7.314).
525Ibid., para. 54.
526Ibid., para. 55 (referring to European Communities' appellant's submission, paras. 392 and 393).

2. Brazil
(a) Procedural Issue – Public Observation of the Oral Hearing
232. Brazil "strongly disagrees" 527 with the participants' request that the Appellate Body allow
public observation of the oral hearing in these proceedings.
233. Brazil observes that the term "proceedings" is defined as "the business transacted by a
court"528, whereas "deliberations" is defined as "careful consideration, weighing up with a view to
decision; ... consideration and discussion of a qu estion by a legislative assembly, a committee, etc.;
debate".529 According to Brazil, the ordinary meaning leaves no doubt that the terms "proceedings"
and "deliberations" are "not inte rchangeable", and that "proceedings " is a far broader concept than
"deliberations" and encompasses the latter and a wide variety of steps taken by Members or conducted
by the Appellate Body, including hearings.530 Brazil further argues that the participants' interpretation
of the term "proceedings" "runs counter to case-law", and notes that, in Canada – Aircraft , the
Appellate Body interpreted the term "proceedings" as including "the conduct of the oral hearing". 531
Brazil observes, moreover, that Rule 28(1) of the Working Procedures "clearly sets out that the oral
hearing is part of the appellate proceedings".532
234. Brazil asserts that in the light of the ordinary meaning of Article 17.10, the case-law, and the
Working Procedures, there is no room for finding that "proceedings" are limited to "internal work"
and exclude oral hearings, as alleged by the participants. 533 Therefore, Brazil considers that the first
sentence of Article 17.10 "must be construed as requiring the confidentiality of any written
submissions, legal memoranda, written responses to questions, oral statements, oral hearings,
deliberations, exchange of views and all in ternal workings of the Appellate Body" 534 and,
consequently, opening the oral hearings to the public in the appellate review stage is inconsistent with
multilateral trading rules, despite the participants' efforts to prove the contrary.
235. Brazil does not see Article 18.2 as providing suppor t for the participants' request to open the
oral hearing to public observation. Brazil describ es Article 18.2 as granting a right to parties to
disclose their own statements to the public. Accordi ng to Brazil, the participants fail to show how a

527Brazil's comments on participants' request for an open hearing, para. 2.
528Ibid., para. 7 (referring to The New Shorter Oxford English Dictionary, 1990, p. 1204).
529Ibid., para. 8 (referring to The New Shorter Oxford English Dictionary , 4th edn, L. Brown (ed.)
(Clarendon Press, 1993), p. 624).
530Ibid., para. 9.
532Ibid., para. 11.
533Ibid., para. 12 (referring to European Communities' request for an open hearing, para. 15).
534Ibid., para. 12.

right granted by Article 18.2 to Members can modi fy the obligation established in Article 17.10, an
obligation that is applicable not only to WTO Memb ers, but also to the Appellate Body. Brazil
cautions that accepting the participants' request "would lead to the absurd conclusion that, by mutual
consent, the parties to a disput e can override multilateral rules".
535 Brazil adds that, by this logic,
"mutual consent" would be a "blanket authori zation" to some Members to achieve goals not
necessarily permitted by the multilaterally agreed rules; in fact, "mutual consent", when
contra legem, would undermine the whole purpose of a multilateral framework.
236. Lastly, Brazil notes that transparency is an issue being discussed in the negotiations on the
review of the DSU. Brazil submits that, in the light of the different positions of Members on this
issue and its impact on the functioning of the disput e settlement mechanism, "the authority to make a
decision on whether or not to open panels' and Appe llate Body's proceedings to the public should lie
with the WTO Membership as a whole, rather than being introduced through the 'back door', as the
result of a series of 'stand-alone requests'".536
(b) Articles 21, 22, and 23 of the DSU
237. Brazil asserts that the Panel erred in anal yzing the European Communities' claims under
Articles 21.5, 23.1, and 23.2(a) of the DSU in "c omplete isolation" from the post-suspension context
of this dispute and from the "systemic non-complian ce" by the European Communities. Brazil also
considers that the Panel erred in its acceptance, at least in part, of the European Communities'
argument that this dispute is about a procedural vi olation. According to Brazil, the focus of the
dispute should not be the retaliatory measures by the United States and Canada; rather, the focus
should remain on whether the European Communitie s has complied with the DSB's recommendations
and rulings in EC – Hormones . Brazil notes that Article 22.8 of the DSU sets out three conditions
that must be met before termination of the suspension of concessions is required, with the first
condition being the removal of the inconsistent measure. Brazil contends that, because none of the
conditions set out in Article 22.8 have been fulfille d, the DSB's authorization to suspend concessions
granted to the United States and Canada remain s in place. In Brazil's view, "the multilateral
authorization to suspend concessions can only be revoked by an equally multilateral ruling."
537
238. Brazil disagrees with the Panel's finding that the United States and Canada were seeking
redress of a violation within the meaning of Artic le 23.1 of the DSU by continuing the multilaterally
authorized suspension of concessions after the adoption of Directive 2003/74/EC. According to
Brazil, the European Communities' unilateral declaration that its implementing measure complies with

535Brazil's comments on participants' request for an open hearing, para. 17.
536Ibid., para. 18 (referring to Canada's request for an open hearing, para. 20).
537Brazil's third participant's submission, para. 12. (original emphasis)

the DSB's recommendations and rulings, or the al leged presumption of good faith compliance, cannot
turn the suspension of concessions authorized by th e DSB into an illegal measure. Brazil adds that
the authorization to suspend concessions was in ef fect at the time of the European Communities'
declaration, and that the United States and Ca nada "were simply exercising a right duly and
previously authorized". 538 Brazil also takes issue with the Panel's interpretation of the term
"determination" in Article 23.2(a) of the DSU. Noting that the "determinations" prohibited under
Article 23.2(a) are unilateral assessments of the kind examined in the US – Section 301 Trade Act
dispute539, Brazil states that this provision is not inte nded to capture "[s]imple interventions and
statements made at DSB or other WTO meetings". 540 Brazil adds that the suspension of concessions,
authorized by the DSB and obtained through recourse to dispute settlement, cannot be considered to
be a unilateral "determination".
239. Turning to the Panel's analysis under Article 22.8 of the DSU, Brazil agrees with the Panel
that the removal of the measure found to be incons istent must be understood as requiring substantive
compliance. Consequently, Brazil argues, the Panel' s analysis of Directive 2003/74/EC in the light of
the SPS Agreement is of "paramount importance for providing an effective solution to the
dispute".541 Brazil considers, in this regard, that pane ls have authority to examine issues or legal
provisions not included in the terms of reference to the extent necessary for providing a prompt
solution to the dispute.
240. Finally, Brazil asserts that, in the post-retaliati on stage of a dispute, the original respondent
bears the burden of proving that its implementing me asure is WTO-consistent. According to Brazil,
once an authorization is granted to a Member unde r Article 22.6 of the DSU to suspend concessions
or other obligations, a turning point has been reached in the procedures established in the DSU. Thus,
Brazil argues, where the original respondent has not complied with WTO rules for a long period of
time despite the DSB's recommendations and rulings, the burden of making a prima facie case of
compliance rests upon that party. Brazil submits th at this "would not be a disproportionate burden"
on the non-complying party because, in the "pos t-retaliation" stage, this Member "will have
maintained an inconsistent measure for many years and the dispute settlement system should take this
into consideration".542 Brazil is also of the view that the original respondent can initiate Article 21.5
proceedings to establish compliance. Brazil argues that such an interpretation is consistent with the
rationale that underpins Article 22.6 of the DSU, which places the burden on the original respondent

538Brazil's third participant's submission, para. 18.
539Ibid., para. 21 (referring to Panel Report, US – Section 301 Trade Act, footnote 657 to para. 7.50).
540Ibid., para. 21.
541Ibid., para. 29.
542Ibid., para. 34.

to demonstrate that the level of the suspension of concessions proposed by the complaining Member
is not justified under the DSU.
3. China

241. Pursuant to Rule 24(2) of the Working Procedures , China chose not to submit a third
participant's submission.
242. China submits that the request made by the par ticipants to open the oral hearing to public
observation should be rejected by the Appellate Body. China disagrees with the participants'
interpretation of the term "proceedings" in Article 17 .10. China states that the drafters of the DSU
intentionally used the different terms "delibera tions" and "proceedings" in Articles 14.1 and 17.10,
respectively. China does not understand the term "proceedings" in Article 17.10 as referring "only to
the internal work of the Appellate Body". 543 China observes that the term "proceedings" is also used
in Article 17.5 of the DSU, which provides that "t he proceedings shall not exceed 60 days from the
date a party to the dispute formally notifies its decision to appeal to the date the Appellate Body
circulates its report". Article 17.12 requires that the Appellate Body "address each of the issues raised
in accordance with paragraph 6 during the appellate proceeding". These provisions do not provide
contextual support for the interpretation of "proceedi ngs" put forward by the participants. In China's
view, the requirement in Article 17.10 that the pr oceedings of the Appellate Body be confidential
must be interpreted to mean that only the participan ts and third participants may be present at the oral
hearing, and all written submissions to the Appellate Body are treated as confidential.
243. China asserts, furthermore, that the purpose of th e oral hearing is to provide all participants
with adequate opportunity to present and argue their case before the Division with the aim of
clarifying the legal issues in the appeal. Accordingl y, China considers that the "main task [of] the
Division, when dealing with the oral hearing issues, is to provide such opportunity to all participants
and secure their right and obligation under the current DSU."
544 China emphasizes that any
determination by the Appellate Body in this app eal "shall not prejudice" the position of Members in
the ongoing negotiations on the review of the DSU.545
4. India
244. India stresses that the Appellate Body should re ject the participants' request to allow public
observation of the oral hearing in these proceedings . India submits that "the issue of external

543China's comments on participants' request for an open hearing, p. 1.
544Ibid., p. 2.
545Ibid.

transparency" is being discussed in the negotiati ons on the review of the DSU and that "[t]hese
negotiations have not yet been completed, and th ere is no consensus on whether and which form of
external transparency is accepta ble to the entire WTO Membership." 546 India argues that until such
consensus is achieved, panel and A ppellate Body proceedings have to be held in closed sessions.
India emphasizes that the confidentiality of the panel and Appellate Body proceedings provided under
the DSU is a "substantive" matter 547, and any decision by the Appellate Body to open its proceedings
to public observation necessarily involves consultati ons with, and decisions by, WTO Members, and
not just the participants and third participants.
5. Mexico
245. Pursuant to Rule 24(2) of the Working Procedures , Mexico chose not to submit a third
participant's submission.
246. Mexico disagrees with the request made by the participants to allow public observation of the
oral hearing in these proceedings. Mexico observes that its position is supported by Article 17.10 of
the DSU, which states that "[t]he proceedings of the Appellate Body shall be confidential."
6. New Zealand
(a) Procedural Issue – Public Observation of the Oral Hearing
247. New Zealand supports the request of the particip ants to allow public observation of the oral
hearing in these proceedings. New Zeal and observes that Rule 27 of the Working Procedures, which
regulates the oral hearing, "makes no mention of confidentiality". 548 New Zealand additionally notes
that the DSU does not mention hearings at the Appe llate Body stage and therefore does not explicitly
preclude opening such a hearing. New Zealand also agrees with the participants that Article 17.10,
"read in accordance with the rules of treaty interpretation and in the context of other provisions in the
DSU" does not preclude public observation of the or al hearing. Therefore, New Zealand considers
that the joint request of the participants to open the hearing of the Appellate Body in these
consolidated appeals is neither inconsistent w ith, nor precluded by, the DSU, the other covered
agreements, or the Working Procedures.

546India's comments on participants' request for an open hearing, p. 1.
547Ibid.
548New Zealand's comments on participants' request for an open hearing, p. 1.

(b) Articles 21, 22, and 23 of the DSU
248. New Zealand submits that the Panel erred in fi nding that the United States and Canada have
acted inconsistently with Articl es 23.1 and 23.2(a) of the DSU. In New Zealand's view, the Panel
should have interpreted Articles 23.1 and 23.2(a) in th e context of the other provisions of the DSU, in
particular Article 22.8, which sets out three condi tions that must be met in order to have the
suspension of concessions terminated. New Z ealand maintains that the first condition under
Article 22.8, which is the relevant one in this disp ute, refers to situations where the inconsistent
measure has actually been removed, and not where the measure is merely claimed to have been
removed. Thus, New Zealand submits, because th e Panel found that the European Communities has
not removed the inconsistent me asure within the meaning of Article22.8, the United States and
Canada have every right to continue the suspensi on of concessions. New Zealand contends that, by
comparison, Article 23 is the "framework provision setting up the requirement to have recourse to
dispute settlement"
549 and does not address the specific situati on in this case, where the United States
and Canada have already had recourse to dispute settlement. New Zealand adds that Article 23 does
not impose an obligation on the United States and Canada to cease the suspension of concessions or to
resort to Article 21.5 proceedings.
249. New Zealand maintains that, in reaching its finding of violation under Articles 23.1
and 23.2(a) of the DSU, the Panel failed to consider the object and purpose of the DSU, which is to
provide security and predictability to the multilatera l trading system. New Zealand observes that the
Panel's finding leads to the result that the Member authorized to suspend concessions must terminate
the suspension whenever the non-compliant Memb er notifies its adoption of an implementing
measure to the DSB and then waits to be challenge d. New Zealand adds that the Panel's approach
"would almost inevitably give rise to the situation where an implementing Member could continually
impose successive rounds of litigation at will, merely by asserting that it had complied"
550, thus
undermining the predictability of the suspension of concessions and its importance in inducing prompt
compliance. New Zealand also argues that the Panel's examination of Articles 23.1 and 23.2(a) in
isolation from Article 22.8 "reduce[s]" the latter provision "to redundancy or inutility".551
250. New Zealand submits that the Panel's sugges tion that the United States and Canada should
have recourse to the rules and procedures of the DSU without delay "is simply not tenable". 552 Such a
suggestion undermines the authorization to susp end concessions that the United States and Canada
have obtained from the DSB. This is incompatib le with the objective of "prompt settlement" of

549New Zealand's third participant's submission, para. 3.21.
550Ibid., para. 3.30.
551Ibid., para. 3.36.
552Ibid., para. 3.62.

disputes envisaged in Article 3.3 of the DSU, be cause it would result in a "redundant" proceeding in
which a new panel would look at "an issue that was already dealt with in the context of the current
proceedings".553
(c) Terms of Reference
251. New Zealand contends that the Panel erred in stating that it did not have jurisdiction to rule on
the compatibility of Directive 2003/74/EC with the covered agreements. New Zealand submits that
the Panel should have explicitly determined the compatibility of Directive 2003/74/EC with the
covered agreements because it had substantively revi ewed the Directive and had concluded that the
measure found to be inconsistent with the SPS Agreement in EC – Hormones had not been removed
by the European Communities. In New Zeal and's view, the Panel Report is sufficiently
comprehensive for the Appellate Body to determine explicitly the compatibility of
Directive 2003/74/EC with Articles 5.1 and 5.7 of the SPS Agreement.
(d) Articles 5.1 and 5.7 of the SPS Agreement
252. New Zealand "strongly" 554 disagrees with the European Co mmunities' arguments in relation
to Articles 5.1 and 5.7 of the SPS Agreement because they would "seriously undermine the principles
and obligations"555 of that Agreement. The SPS Agreement imposes a "very important" requirement
that SPS measures be developed and implemented in a manner that is "transparent, consistent,
scientifically-based, and the least trade-restrictive" 556, and this requirement is at the "forefront" 557 of
this dispute. New Zealand recalls that Article 2.2 of the SPS Agreement imposes a general
obligation that SPS measures be based on scientific principles and not maintained without sufficient
scientific evidence. This obligation is given specifi c application by Article 5.1, which requires that
SPS measures be "based on" a risk assessment, which, according to the Appellate Body's
interpretation, entails that there must be a "ra tional relationship between the measure and the risk
assessment" whereby the results of the risk assessment sufficiently warrant the SPS measures at
stake.558 In New Zealand's view, the Panel correctly concluded that Directive 2003/74/EC was not
based on a risk assessment within the meaning of Arti cle 5.1. The Panel's findings were supported by
an exhaustive overview of all rele vant scientific evidence, drawing upon the expertise and knowledge
of a group of eminent scientific and technical experts.

553New Zealand's third participant's submission, para. 3.62 (quoting Canada's other appellant's
submission, para. 96).
554Ibid., para. 3.42.
555Ibid., para. 3.43.
556Ibid., para. 3.44.
557Ibid., para. 3.45.

253. New Zealand states that the risk assessment at is sue in this dispute is the second type of risk
assessment provided for in paragraph 4 of Annex A to the SPS Agreement , which is "designed to
protect from risks arising from additives, contam inants, toxins or disease-causing organisms in
foodstuffs".
559 New Zealand recalls that, with regard to this type of risk assessment, the Appellate
Body indicated in EC – Hormones that a Member is required to "identify the adverse effects on
human or animal health (if any) arising from the pr esence of such additives, contaminants, toxins or
disease-causing organisms in foodstuffs", and, "if an y adverse effects exist, evaluate the potential
(or possibility) of the occu rrence of such effects." 560 The Appellate Body also found that "the 'risk'
evaluated in a risk assessment must be ascertainable —'theoretical uncertainty is not the kind of risk
which ... is to be assessed'." 561 New Zealand also refers to the panel's finding in Japan – Apples that
a panel's review of a measure under Article 5.1 woul d also involve an evaluation of whether the risk
assessment was "as appropriate to the circum stances", and whether it took into account "risk
assessment techniques developed by the relevant international organizations."562 New Zealand recalls
further the Appellate Body's finding in EC – Hormones that the European Communities "did not
actually proceed to an assessment, within the meaning of Articles 5.1 and 5.2, of the risks arising from
the failure of observance of good veterinary practice combined with problems of control of the use of
hormones for growth promotion purposes." 563 New Zealand concludes that, as in EC – Hormones ,
the European Communities "once again" 564 has failed to demonstrate that the risk assessment
underlying Directive 2003/74/EC satisfies the requirements of the SPS Agreement.
254. New Zealand argues that, as the Member invoki ng Article 5.7, the European Communities
bears the burden of demonstrating that the four requ irements of Article 5.7 have been met, including
the requirement that the measure be imposed in a situation where relevant scientific evidence is
"insufficient".565 New Zealand recalls the Appellate Body's finding that these four requirements are
"cumulative"566, and that, whenever one of them is not met, the measure at issue is inconsistent with
Article 5.7. New Zealand asserts that European Communities has failed to demonstrate that it has
satisfied any of the requirements under Article 5.7 with respect to Directive 2003/74/EC.

559New Zealand's third participant's submission, para. 3.52.
560Ibid. (referring to Appellate Body Report, EC – Hormones, para. 183). (emphasis omitted)
564Ibid., para. 3.56.
565Ibid., para. 3.58 (referring to Panel Report, Japan – Apples , para. 8.212). In addition, the other
requirements are: (i) the provisi onal SPS measure must be adopted on the "basis of available pertinent
information"; (ii) the Member seeks to "obtain the additional information necessary for a more objective risk
assessment"; and (iii) the Member reviews the measure "accordingly within a reasonable period of time".
566Ibid., para. 3.59 (referring to Appellate Body Report, Japan – Agricultural Products II, para. 89).

7. Norway
(a) Procedural Issue – Public Observation of the Oral Hearing
255. Norway supports the participants' request that the Appellate Body allow public observation of
the oral hearing in these proceedings. Norway asserts that the meaning of the term "proceedings" in
isolation is not unequivocal, and resort must be had to context and object and purpose as set out in
Article 31(1) of the Vienna Convention on the Law of Treaties567 (the "Vienna Convention"). Turning
to Articles 17.5 and 17.12 of the DSU as contex t, Norway recognizes that these provisions use the
term "proceedings" "as 'short-hand' for all stages in an appeal", but it considers that this is "not
dispositive in itself". 568 Norway also recognizes that Article 17.10 is drafted differently from
Article 14.1, which uses the term "deliberations", bu t it does not consider that this implies that the
term "proceedings" in the first sentence of Article 17. 10 must be read to require confidentiality of the
oral hearing before the Appellate Body. Norway asserts that it "cannot see that the object and purpose
of Article 17.10 is different from [that of] Article 14 .1 of the DSU, which is to protect the internal
work of panels" and argues that "[t]he object and purpose thus indicates that the term 'proceedings' in
Article 17.10 should be given a restrictive interp retation, focussing on the internal work of the
Appellate Body, and not encompass[ing] the oral hearing." 569 Norway submits that a restrictive
interpretation of "proceedings" is also supported by the Spanish and French versions of the DSU
referring to the term " actuaciones" in Spanish and the term " travaux" in French, in accordance with
Article 33 of the Vienna Convention. Norway finds further support for a restrictive interpretation of
the term "proceedings" in the fact that Article 18. 2 specifically authorizes parties to a dispute to
disclose their submissions and statements to the public. In Norway's view, Article 18.2 cannot be
interpreted to require "more confidentiality than the parties require".570
256. Norway thus considers that the DSU allows th e Appellate Body to open the oral hearing to
the public where all participants to the dispute so request and that the Appellate Body has discretion
under Rule 16(1) of the Working Procedures to respond favourably to the request. Norway states
that allowing public observation will bring the Appellate Body more into line with other international
tribunals where "open hearings is the norm". 571 Norway further considers that allowing public
observation "will be beneficial to the process and to the legitimacy of the Appellate Body's work".572

567Done at Vienna, 23 May 1969, 1155 UNTS 331; 8 International Legal Materials 679.
568Norway's comments on participants' request for an open hearing, para. 15.
569Ibid., para. 23.
570Ibid., para. 37.
571Ibid., para. 39.
572Ibid.

(b) Articles 21, 22, and 23 of the DSU
257. Norway maintains that Article 22.8 of the DSU requires that the suspension of concessions be
temporary and conditional. Norway emphasizes that once compliance is achieved, be it through a
simple revocation of the inconsiste nt measure or its replacement with another measure that ensures
compliance, the right to suspend concessions " automatically lapses"
573 without a need for formal
revocation of the authorization by the DSB. Norway submits that, where the parties disagree as to
whether the measure taken to comply actually achieves compliance, as is the case in this dispute, the
parties must resort to Article 21.5 panel proceedi ngs. Once a panel (and the Appellate Body, if the
panel report is appealed) determines that the im plementing measure brings the Member concerned
into compliance with the recommendations and rulings of the DSB, "the previous authorization [to
suspend concessions] lapses ipso facto once the report is adopted, without there being a need for the
DSB to revoke it formally as the temporal condition ... no longer exists".
574
258. Norway further submits that a presumption of good faith compliance is applicable under the
DSU, and the original complainant who considers th at the measure taken to comply fails to achieve
compliance has an obligation to initiate Article 21. 5 proceedings. Noting that Articles 22.8 and 21.5
do not set forth any time-limits for initiating Article 21.5 proceedings, Norway claims that this does
not mean that the original complainant may simply refuse to launch such proceedings. In Norway's
view, beyond a certain point in time, Article 23.2( a) may be breached. To avoid unreasonable delays,
Article 21.5 should be interpreted to allow both the original complainant and the original respondent
to initiate Article 21.5 proceedings. Norway contends that Article 21.5 is written in the passive form
without specifying which party may initiate the proc eedings and, consequently, this provision allows
both parties to launch Article 21.5 proceedings. The fact that the compliance panel report in EC –
Bananas III (Article 21.5 – EC) remained unadopted, and that the panel refused to make any
recommendations or rulings, does not in itself prove that an original respondent may not invoke
Article 21.5, because that case involved particular circumstances that explain the outcome.
259. Norway explains that, in Article 21.5 proceed ings launched by the original respondent, the
panel may not "make a declaratory judgment based on the presentation of the original respondent, but
must make an objective assessment of the matter before it."
575 However, where the original
complainant refuses to participate, any claim that the new measure is inconsistent with other
provisions of the covered agreements will not be heard. In such proceedings, the original respondent
may be considered as a "complainant" for purposes of Article 6.1 and an "applicant" for purposes of

573Norway's third participant's submission, para. 6. (original emphasis)
574Ibid., para. 7.
575Ibid., para. 15.

Article 6.2 of the DSU. The requirements of Article 6.2 can be fulfilled by referring to the original
panel and Appellate Body reports, together with the identification of the specific measure taken to
comply and a description of how it ensures complian ce. Norway adds that, in such proceedings,
"[o]nly the violations specifically addressed"576 in the panel and Appellate Body reports in the original
dispute will be within the Article 21.5 panel's term s of reference. This is because the original
respondent does not complain about specific violations by other Members, but asks for a "declaratory
finding"577 of compliance with the DSB's recommendations and rulings in the original dispute. By not
launching Article 21.5 panel proceedings first, the original complainant loses certain rights to present
new claims that it would have been able to include in the panel's terms of re ference if it had initiated
the Article 21.5 proceedings a nd submitted the request for the establishment of a panel.
Consequently, Norway submits that allowing th e original respondent to launch Article 21.5
proceedings would provide the original complainan ts with the incentive to launch Article 21.5 panel
proceedings first.
8. Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
260. Pursuant to Rule 24(2) of the Working Procedures , the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu chose not to submit a third participant's submission.
261. The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu supports the request
of the participants to allow public observation of the oral hearing in these proceedings "in the interests
of greater transparency".578
III. Issues Raised in This Appeal
262. The following issues are raised on appeal by the European Communities:
(a) Whether the Panel erred in failing to find that the United States and Canada had to
initiate proceedings pursuant to Article 21.5 of the DSU in order to comply with their
obligations, under Articles 23.1 and 23.2(a), to have recourse to the rules and
procedures of the DSU;
(b) Whether the Panel erred in finding that Ar ticle 22.8 of the DSU was not breached by
the United States and Canada because th e European Communities has failed to
comply with the recommendations and rulings of the DSB in EC – Hormones, which

576Norway's third participant's submission, para. 17.
577Ibid., para. 18.
578Comments of Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on participants'
request for an open hearing, p. 1.

underlie the authorization given to th e United States and Canada to suspend
concessions and other obligations;
(c) Whether the Panel exceeded its terms of reference by examining the compatibility of
Directive 2003/74/EC
579 with Articles 5.1 and 5.7 of the SPS Agreement;
(d) Whether the Panel erred by failing to make the suggestion, pursuant to its authority
under Article 19.1 of the DSU, that the United States and Canada cease the
suspension of concessions and resort to Article 21.5 proceedings, or any other
proceedings to which the parties may agree, to resolve any disagreements as to the
consistency of Directive 2003/74/EC with the SPS Agreement;
(e) Whether the Panel failed to respect the prin ciple of due process, and therefore failed
to comply with its duties under Article 11 of the DSU, in selecting, and relying upon
the advice of, two experts who were not "i ndependent and impartial" as required by
the Rules of Conduct;
(f) Whether the Panel erred in interpreti ng and applying Article 5.1 of the SPS
Agreement in assessing the consistency of the import ban on meat from cattle treated
with oestradiol-17 β for growth-promotion purposes, applied pursuant to
Directive 2003/74/EC, in particular by:
(i) adopting a narrow interpretation of "ris k assessment" and failing to take into
account evidence on misuse and abuse in the administration of hormones;
(ii) requiring the European Communities to eval uate specifically the risks arising
from the presence of residues of oestradiol-17 β in meat or meat products as a
result of the cattle being treated with this hormone for growth-promotion
purposes;
(iii) imposing a quantitative method of risk assessment on the European
Communities;
(iv) incorrectly allocating the burden of proof; and

579Directive 2003/74/EC of the European Parliament and of the Council of 22 September 2003
amending Council Directive 96/22/EC concerning the prohibition on the use in stockfarming of certain
substances having a hormonal or thyrostatic action and of beta-agonists, Official Journal of the European
Union, L Series, No. 262 (14 October 2003) 17 (Exhibits EC-1 and US-3 submitted by the European
Communities and the United States, respectively, to the Panel).

(v) failing to make an objective assessment of the matter before it, as required by
Article 11 of the DSU, by articulating and applying an incorrect standard of
review.
(g) Whether the Panel erred in interpreti ng and applying Article 5.7 of the SPS
Agreement when assessing the consistency of the provisional import ban on meat
from cattle treated with testosterone, progesterone, trenbolone acetate, zeranol, and
melengestrol acetate ("MGA") for growth-promotion purposes, applied under
Directive 2003/74/EC. More specifically, whet her the Panel erred in finding that the
relevant scientific evidence was insufficient because it:
(i) incorrectly found that the determinati on of whether the relevant scientific
evidence is insufficient "must be disc onnected" from the chosen level of
protection;
(ii) articulated and applied an incorrect legal test pursuant to which, where
international standards exist for a substance, a "critical mass of new scientific
evidence" is required to render the relevant scientific evidence "insufficient";
(iii) incorrectly allocated the burden of proof; and
(iv) failed to make an objective assessment of the matter before it, as required by
Article 11 of DSU.
263. The following issues are raised on appeal by the United States and Canada:
(a) Whether the Panel erred in finding that th e United States and Canada were seeking
the redress of a violation within the meaning of Article 23.1 of the DSU, by
maintaining the suspension of con cessions after the notification of
Directive 2003/74/EC by the European Communities;
(b) Whether the Panel erred in finding that the United States and Canada made a
unilateral determination that Directive 2003/ 74/EC is not consistent with the WTO
agreements without recourse to the rules and procedures of the DSU, in breach of
Article 23.2(a) of the DSU.
264. In the event that the Appellate Body were to uphold the Panel's finding that the United States
and Canada acted inconsistently with Articles 23.2(a) and 23.1 of the DSU, the United States and
Canada conditionally appeal the following issues:

(a) Whether the Panel erred in concluding that it was not called upon, and hence did not
have jurisdiction, to determine the co mpatibility of Directive 2003/74/EC with
Articles 5.1 and 5.7 of the SPS Agreement;
(b) Whether the Panel erred in suggesting, pursu ant to Article 19.1 of the DSU, that the
United States and Canada have recourse to the rules and procedures of the DSU
without delay.
IV. The Application of the DSU in the Post-Suspension Stage of a Dispute
A. Introduction
265. We begin with the issues raised on appeal by Canada, the European Communities, and the
United States relating to the interpretation and appl ication of several provisions of the DSU in the
post-suspension stage of a dispute. This stag e refers to the period after a WTO Member has
suspended concessions or other obligations to another Member
580, having received authorization to do
so from the DSB. The authorization to suspend co ncessions stems from the other Member's failure to
bring into compliance measures that have been found to be inconsistent with the covered agreements
by a panel or the Appellate Body.
266. This appeal relates to the EC – Hormones dispute in which, following a complaint by the
United States and Canada, the ban imposed by the European Communities on imports of meat from
cattle treated with growth-promoting hormones, pursuant to Directive 96/22/EC, was found to be
inconsistent with the SPS Agreement .581 Because the European Communities failed to bring itself
into compliance within the reasonable peri od of time, which expired on 13 May 1999 582, the United
States and Canada requested the DSB to authorize suspension of concessions pursuant to Article 22.2
of the DSU. 583 The United States and Canada obtained authorization from the DSB to suspend
concessions in relation to the European Communities on 26 July 1999, following an arbitration at the
European Communities' request. 584 On 29 July 1999, the United States applied 100 per cent import
duties on a range of imports from certain me mber States of the European Communities. 585

580We will use the term "suspension of concessions" as an abbreviated reference to "the suspension of
concessions or other obligations".
582Award of the Arbitrator, EC – Hormones, para. 48.
583WT/DS26/19; WT/DS48/17.
584Decision by the Arbitrators, EC – Hormones (Article 22.6 – United States) , para. 84; Decision by
the Arbitrators, EC – Hormones (Article 22.6 – Canada), para. 73. See also WT/DS26/20; WT/DS48/18.
585See supra, footnote 17.

On 1 August 1999, Canada applied 100 per cent ad valorem duties on a similar range of imports
from the European Communities.586
267. After the adoption of the panel and Appellate Body reports in the EC – Hormones dispute,
the European Commission commissioned 17 scientific studies to assess the risks to human health posed
by the six hormones at issue.587 On the basis of these studies and additional scientific information made
available to the European Commission, the Scientif ic Committee on Veterinary Measures relating to
Public Health (the "SCVPH") issued three Opinions in 1999, 2000, and 2002 concerning risks to human
health posed by the six hormones.588 In the light of these Opinions, the European Communities adopted
Directive 2003/74/EC on 22 September 2003 589, which amends Directive 96/22/EC.
Directive 2003/74/EC maintains the permanent pr ohibition on the importation of meat and meat
products from animals treated with oestradiol-17 β for growth-promotion purposes originally
contained in Directive 96/22/EC. 590 In relation to the five other hormones—testosterone,
progesterone, trenbolone acetate, zeranol, and MGA—Directive 2003/74/EC imposes the prohibition
on a provisional basis.
591 Directive 2003/74/EC specifies that, even though the scientific information
available showed the existence of risks associated with these substances, "the current state of
knowledge does not make it possible to give a qua ntitative estimate of the risk to consumers". 592 The
prohibition of these five hormones applies "while the Community seeks more complete scientific
information from any source, which could shed li ght and clarify the gaps in the present state of
knowledge of these substances".
593
268. On 27 October 2003, the European Communities notified the DSB of the adoption,
publication, and entry into force of Directive 2003/74/EC, as well as the 1999, 2000, and 2002
Opinions, which it considered provided a sufficien t justification for the permanent and provisional
prohibitions on the importation of meat from ca ttle treated with the six hormones under the SPS
Agreement.
594 The European Communities therefore claime d that it had fully implemented the DSB's
recommendations and rulings in the original EC – Hormones dispute, and consequently considered
that the suspension of concessions by the United St ates and Canada was no longer justified. The
United States and Canada refused to lift the su spension of concessions imposed pursuant to the
authorization obtained from the DSB, because they did not consider that Directive 2003/74/EC had

586See supra, footnote 18.
587See supra, footnote 19.
588See supra, footnotes 20, 21, and 22.
589See supra, footnote 5.
590Directive 2003/74/EC, supra, footnote 5, Recital 10 and Article 1 (amending Articles 2 and 3 of
Directive 96/22/EC).
591Ibid.
592Directive 2003/74/EC, supra, footnote 5, Recital 7.
593Ibid., Recital 10.
594WT/DS26/22; WT/DS48/20.

brought the European Communities into complianc e with the DSB's recommendations and rulings.
595
The European Communities initiated the present pr oceedings alleging that the United States and
Canada acted inconsistently with their obligatio ns under the DSU by continuing the suspension of
concessions.596
269. A summary of the findings of the Panel is provided in section B and the claims and arguments
raised on appeal are described in section C. In sect ions D and E we address the claims raised by the
European Communities, including whether Article 22.8 of the DSU required the United States and
Canada to cease the application of the suspensi on of concessions upon the European Communities'
notification of Directive 2003/74/EC, and whether the United States and Canada were required to
initiate Article 21.5 proceedings if they did not consider that Direc tive 2003/74/EC is consistent with
the covered agreements. Section F addresses the claims raised by the United States and Canada in
their other appeals concerning the Panel's findings th at they breached Articles 23.2(a) and 23.1 of the
DSU by seeking the redress of a violation without recourse to the rules and procedures of the DSU.
Section G addresses the conditional claims raised by the United States and Canada in relation to the
Panel's finding that it did not have jurisdiction to determine the compatibility of Directive 2003/74/EC
with the covered agreements. Finally, section H a ddresses the issues raised by all three participants
concerning the suggestion made by the Panel pursuant to Article 19.1 of the DSU.
B. The Panel's Findings
1. Scope of the European Communities' Claims

270. Before the Panel, the European Communities ra ised "two sets of main claims" against the
continued suspension of concessions by the United St ates and Canada. It asserted that the continued
suspension is inconsistent with: (i) Article 23.2(a) , read together with Articles 21.5 and 23.1 of the
DSU; and (ii) Article 23.1, read in conjunction w ith Articles 22.8 and 3.7 of the DSU. In addition,
the European Communities ra ised claims under Articles I and II of the GATT 1994. 597 In the event
that the Panel found no violation of Article 23 of the DSU, the European Communities claimed, in the

595WT/DSB/M/157; WT/DSB/M/159.
596In December 2004, the United St ates requested information fr om the European Communities
pursuant to Article 5.8 of the SPS Agreement concerning the justification underlying Directive 2003/74/EC.
(Panel Report, US – Continued Suspension , para. 7.227) The Panel was established on 14 January 2005 at the
European Communities' request. (Panel Report, US – Continued Suspension, para. 1.2; Panel Report, Canada –
Continued Suspension, para. 1.2)
597Panel Report, US – Continued Suspension , para. 3.1; Panel Report, Canada – Continued
Suspension, para. 3.2.

alternative, that the continued suspension by th e United States and Canada is inconsistent with
Article 22.8 of the DSU.598
271. At the outset of its analysis, the Panel made some preliminary remarks concerning the scope
of its mandate. The Panel recalled that the matter before it was the alleged failure of the United States
and Canada to comply with their obligations under the DSU by maintaining the suspension of
concessions authorized by the DSB in the EC – Hormones dispute, even though the European
Communities had adopted Directive 2003/74/EC and notified this Directive to the DSB as the
measure taken to comply.
599 The Panel noted that, in its first written submission, the European
Communities divided its claims into "two main sets of claims" and one conditional claim. Under the
first set of claims, the European Communities alleged that the United States and Canada, by
maintaining the suspension of concessions, were seeking redress of a perceived violation by the
European Communities of the covered agreements w ithout recourse to the rules and procedures of the
DSU, in breach of Article 23.2(a), read in c onjunction with Articles 21.5 and 23.1 of the DSU. 600
Under the second set of claims, the European Communities submitted that, because it should be
presumed to have complied in good faith with the DS B's recommendations and rulings by adopting
and notifying Directive 2003/74/EC, the continued a pplication of the suspension of concessions by
the United States and Canada is also inconsistent w ith Article 23.1, read together with Articles 22.8
and 3.7 of the DSU. 601 Finally, in the event that the Panel was not to find "any violation under
Articles 23.1, 23.2(a), 3.7, 22.8, and 21.5 of the DSU" 602, the European Communities raised a
conditional claim alleging that the United States a nd Canada violated Article 22.8 of the DSU per se
because, by adopting Directive 2003/74/EC, the European Communities had achieved actual (rather
than presumed) compliance requiring termination of the su spension of concession in accordance with
Article 22.8.603
272. The Panel considered that this approach, although not specified in the European Communities'
request for the establishment of a panel, "is actually a clarification of the claims listed in its request

598Panel Report, US – Continued Suspension , para. 3.2; Panel Report, Canada – Continued
Suspension, para. 3.2.
599Panel Report, US – Continued Suspension , paras. 7.150 and 7.151; Panel Report, Canada –
Continued Suspension, paras. 7.137 and 7.138.
600Panel Report, US – Continued Suspension , paras. 7.153 and 7.183; Panel Report, Canada –
Continued Suspension, paras. 7.140 and 7.165.
601Panel Report, US – Continued Suspension , paras. 7.153 and 7.252; Panel Report, Canada –
Continued Suspension, paras. 7.140 and 7.245.
602Panel Report, US – Continued Suspension , para. 7.155; Panel Report, Canada – Continued
Suspension, para. 7.142.
603Panel Report, US – Continued Suspension , para. 7.156; Panel Report, Canada – Continued
Suspension, para. 7.143.

for the establishment of a panel and not arguments".
604 Thus, the Panel considered that the approach
outlined in the European Communities' first written submission constituted part of the Panel's terms of
reference.605 The Panel therefore decided that it would address the two main claims as elaborated by
the European Communities in its first written su bmission, and would address the conditional claim
only if the European Communities failed to establish its two main claims.606
2. The European Communities' Claim th at the United States and Canada
Breached Article 23.2(a) of the DSU Read Together with Articles 23.1
and 21.5
273. The Panel first examined the European Co mmunities' claim under Article 23.2(a), read
together with Articles 23.1 and 21.5 of the DSU. The Panel referred to the phrase "[i]n such cases",
which connects paragraphs 1 and 2 of Article 23, a nd observed that this phrase indicated that it would
have to determine whether the conditions of Artic le 23.1 were met before it could assess whether the
United States and Canada breached Article 23.2(a) of the DSU. In the Panel's view, "Article 23.1
applies in this case only with respect to a determ ination against a measure which has not yet been
subject to a recourse to the rules and procedures of the DSU." 607 According to the Panel,
Directive 2003/74/EC is such a measure. 608 Noting that Directive 2003/74/EC, like the measure it
replaced, imposed an import ban, the Panel recalled that it is not the import ban on meat treated with
hormones, but rather the justification for this ba n, that was found to be inconsistent with the SPS
Agreement in EC – Hormones . Therefore, the Panel "d[id] not c onsider that the fact that the ban
remains in place means that no new measure has been adopted". 609 The Panel further found that,
although the United States and Canada were authori zed to suspend concessions, such "'authorization
by the DSB' does not mean [an] ' obligation to suspend concessions'." 610 Thus, in the Panel's view,
"the fact that, after the European Communities' notification of Directive 2003/74/EC", the United
States and Canada "continue[] to apply [their] su spension of concessions even though [they have] no

604Panel Report, US – Continued Suspension , para. 7.163; Panel Report, Canada – Continued
Suspension, para. 7.150.
605Panel Report, US – Continued Suspension , para. 7.164; Panel Report, Canada – Continued
Suspension, para. 7.151.
606Panel Report, US – Continued Suspension , para. 7.164; Panel Report, Canada – Continued
Suspension, para. 7.151.
607Panel Report, US – Continued Suspension , para. 7.205; Panel Report, Canada – Continued
Suspension, para. 7.197.
608Panel Report, US – Continued Suspension , para. 7.206; Panel Report, Canada – Continued
Suspension, para. 7.198.
609Panel Report, US – Continued Suspension , para. 7.207; Panel Report, Canada – Continued
Suspension, para. 7.199.
610Panel Report, US – Continued Suspension , para. 7.209; Panel Report, Canada – Continued
Suspension, para. 7.201.

obligation to do so is evidence" that the United States and Canada are "actively" seeking the redress of
a violation within the meaning of Article 23.1.611
274. Having found that the conditions for the appli cability of Article 23.1 were met, the Panel
proceeded to examine whether the United States and Canada had "ma[d]e a determination to the effect
that a violation has occurred" within the meaning of Article 23.2(a) in respect of
Directive 2003/74/EC. The Panel observed that statements made at two DSB meetings concerning the
notification of Directive 2003/74/EC indicated that the United States and Canada reached "a more or
less final decision" 612 that the new Directive fails to implement the DSB's recommendations and
rulings in EC – Hormones and is inconsistent with the SPS Agreement . Such statements, in the
Panel's view, constitute a "determinati on" under Article 23.2(a) of the DSU. 613 The Panel added that,
even if such statements were considered provision al, "the subsequent continuation of the suspension
of concessions by [the United States and Canada] w ithout alteration and without saying that [they
were] still studying [Directive 2003/74/EC]" confirms that they made such a "determination". 614 The
Panel further found that, because the DSB's author ization to suspend concessions does not apply to
Directive 2003/74/EC 615 and does not amount to "a multilatera l determination of inconsistency"
regarding that Directive 616, the United States and Canada failed to make a determination through
recourse to the rules and procedures of the DSU, in violation of Article 23.2(a) of the DSU. Because
the United States and Canada "ha[d] not made any determination through recourse to dispute
settlement in accordance with th e rules and procedures of the DSU," the Panel concluded a fortiori
that the United States and Canada "ha[d] failed to make any such determinat ion consistent with the
findings contained in the panel or Appellate Body re port adopted by the DSB or an arbitration award
rendered under the DSU." 617 Therefore, the Panel found that the United States and Canada had
breached Article 23.2(a) of the DSU.618

611Panel Report, US – Continued Suspension , para. 7.209; Panel Report, Canada – Continued
Suspension, para. 7.201.
612Panel Report, US – Continued Suspension , para. 7.222; Panel Report, Canada – Continued
Suspension, para. 7.215 (quoting Panel Report, US – Section 301 Trade Act, footnote 657 to para. 7.50).
613Panel Report, US – Continued Suspension , paras. 7.225 and 7.226; Panel Report, Canada –
Continued Suspension, paras. 7.219, 7.222, and 7.223.
614Panel Report, US – Continued Suspension , para. 7.230; Panel Report, Canada – Continued
Suspension, para. 7.224.
615Panel Report, US – Continued Suspension , para. 7.234; Panel Report, Canada – Continued
Suspension, para. 7.228.
616Panel Report, US – Continued Suspension , para. 7.242; Panel Report, Canada – Continued
Suspension, para. 7.235.
617Panel Report, US – Continued Suspension , para. 7.244; Panel Report, Canada – Continued
Suspension, para. 7.237. (emphasis omitted)
618Panel Report, US – Continued Suspension , para. 7.245; Panel Report, Canada – Continued
Suspension, para. 7.238.

275. Next, the Panel turned to the European Communities' claim that the United States and Canada
were required to initiate Article 21.5 proceedings if they considered that Directive 2003/74/EC was
not consistent with the covered agreements. The Panel stated that recourse to the rules and procedures
of the DSU, within the meaning of Article 23.2(a), "encompasses any of the means of dispute
settlement provided in the DSU, including cons ultation, conciliation, goo d offices and mediation"
619
and is not limited to panel proceedi ngs under Article 21.5 of the DSU. On this basis, the Panel "[did]
not find it necessary to make a finding on wh ether [the United States and Canada] breached
Article 21.5 by not having recourse to the procedure under that provision".620
276. On the basis of the above, the Panel concluded that the United States and Canada:
violated Article 23.1 and 23.2(a) of the DSU by seeking redress of a
violation of the WTO Agreement through a determination that the
[European Communities'] implementing measure did not comply
with the DSB recommendations and rulings in the EC – Hormones
case without having recourse to di spute settlement in accordance
with the rules and procedures of the DSU.
621
3. The European Communities' Claim th at the United States and Canada
Breached Article 23.1 of the DSU Read Together with Articles 22.8 and 3.7
277. The Panel then turned to the European Commun ities' claim that the United States and Canada
breached Article 23.1, read together with Artic les 22.8 and 3.7 of the DSU, by continuing the
suspension of concession even though the measure found to be inconsistent in EC – Hormones had
been removed. The Panel observed that its ear lier findings that the United States and Canada
committed a "procedural error under the DSU [and] breached Articles 23.1 and 23.2(a)" 622 were
"completely unrelated to whether the European Communities implemented the DSB recommendations
and rulings" 623 in EC – Hormones in substance. In contrast, the Panel found that the European
Communities' allegation of violati ons of Articles 22.8, 23.1, and 3. 7 of the DSU was premised on the
"conformity (presumed or actual) with the SPS Agreement "624 of Directive 2003/74/EC. This is
because, in the Panel's view, the phrase "until such time as the measure found to be inconsistent ... has

619Panel Report, US – Continued Suspension , para. 7.247; Panel Report, Canada – Continued
Suspension, para. 7.240.
620Panel Report, US – Continued Suspension , para. 7.249; Panel Report, Canada – Continued
Suspension, para. 7.242.
621Panel Report, US – Continued Suspension , para. 7.251; Panel Report, Canada – Continued
Suspension, para. 7.244.
622Panel Report, US – Continued Suspension , para. 7.270; Panel Report, Canada – Continued
Suspension, para. 7.286.
623Panel Report, US – Continued Suspension , para. 7.272; Panel Report, Canada – Continued
Suspension, para. 7.288.
624Panel Report, US – Continued Suspension , para. 7.272; Panel Report, Canada – Continued
Suspension, para. 7.288.

been removed" in Article 22.8 implies that what is to be achieved is not the removal of the measure,
but actual compliance with the DSB's recommendations and rulings. 625 Thus, Article 22.8 may be
breached "only if the European Communities has complied with the recommendations and rulings of
the DSB and [the United States and Canada] failed to immediately remove [their] suspension of
concessions or other obligations."626
278. With respect to the Europ ean Communities' argument that it should benefit from "a
presumption of good faith compliance" 627 regarding Directive 2003/74/EC, the Panel acknowledged
that, under general international law, States enjoy a presumption of good faith in the performance of
their treaty obligations.
628 Nevertheless, the Panel found that th is presumption does not mean that the
European Communities "actually complied with its treaty obligations" 629 and additionally observed
that the United States and Canada may also invoke the presumption of good faith with regard to their
respective measures. 630 Turning to the text of the DSU, the Panel found that "there is no express
exclusion of the application of the principle of good faith in the DSU". 631 The Panel then rejected the
United States' and Canada's argument that "the presumption of good faith compliance cannot
supersede the multilateral authorization of the DSB ... to suspend concessions." 632 According to the
Panel, "the removal of the measure found to be in consistent with a covered agreement supersedes the
DSB authorization to suspend concessions", because not hing in Article 22.8 of the DSU suggests that
a Member suspending concessions can continue to do so as long as the aut horization has not been
repealed by the DSB.633
279. Next, the Panel examined the European Comm unities' argument that the presumption of good
faith compliance is only rebuttable by recourse to Article 21.5 by the United States and Canada. In
examining this argument, the Panel considered it important "to determine the extent to which the

625Panel Report, US – Continued Suspension , para. 7.284; Panel Report, Canada – Continued
Suspension, para. 7.300.
626Panel Report, US – Continued Suspension , para. 7.285; Panel Report, Canada – Continued
Suspension, para. 7.301.
627Panel Report, US – Continued Suspension , para. 7.310; Panel Report, Canada – Continued
Suspension, para. 7.310.
628Panel Report, US – Continued Suspension , para. 7.318; Panel Report, Canada – Continued
Suspension, para. 7.318.
629Panel Report, US – Continued Suspension , para. 7.322; Panel Report, Canada – Continued
Suspension, para. 7.322.
630Panel Report, US – Continued Suspension , para. 7.323; Panel Report, Canada – Continued
Suspension, para. 7.323.
631Panel Report, US – Continued Suspension , para. 7.336; Panel Report, Canada – Continued
Suspension, para. 7.336.
632Panel Report, US – Continued Suspension , para. 7.342; Panel Report, Canada – Continued
Suspension, para. 7.342.
633Panel Report, US – Continued Suspension , para. 7.343; Panel Report, Canada – Continued
Suspension, para. 7.343.

unavailability of any legal recourse for the Europ ean Communities in a post retaliation situation may
justify that the presumption of good faith compliance be irrebuttable, except through recourse to the
procedure provided in Article 21.5 of the DSU."
634 The Panel noted, first, that "nowhere does the
DSU provide that a presumption of good faith comp liance should be rebuttable only through recourse
to Article 21.5 of the DSU." 635 Secondly, the Panel observed that "it appears that, even under the
current DSU, several means seem a priori to be available to the European Communities to obtain
termination of the suspension of concessions or other obligations", including good offices and
consultations, Article 21.5 proceedings, arbitrati on under Article 25 of the DSU, and recourse to
regular panel procedures (as the European Communities had done in the present case). 636 For these
reasons, the Panel rejected the European Commun ities' argument "that the presumption of good faith
compliance which the European Communities enjoys should be rebuttable only through a recourse by
the complainants in the original case to Article 21.5 of the DSU."637 The Panel was not persuaded that
Article 21.5 is the "only avenue" for addressing "a cl aim of compliance by a Member alleging to have
complied with DSB recommendations and rulings", nor that Article 21.5 proceedings are "open only
to the original complainant".638
280. The Panel concluded:
while we agree with the existence of a presumption of good faith
compliance, we do not agree with the European Communities that the
presumption of good faith that it enjoys may only be rebutted in an
Article 21.5 procedure. We find, on the contrary, that this
presumption, because it applies to measures taken by all parties, must
be rebuttable before this Panel. Just as the [European Communities']
allegations are intended to re but the presumption of good faith
conformity of the [United States and Canadian] retaliatory measures
with Article 22.8 of the DSU, [the United States and Canada] should

634Panel Report, US – Continued Suspension , para. 7.348; Panel Report, Canada – Continued
Suspension, para. 7.346.
635Panel Report, US – Continued Suspension , para. 7.349; Panel Report, Canada – Continued
Suspension, para. 7.347.
636Panel Report, US – Continued Suspension , para. 7.350; Panel Report, Canada – Continued
Suspension, para. 7.348. The Panel noted that the broad language ("such dispute shall be decided through
recourse to these dispute settlement procedures") used in Article 21.5 "could be deemed to encompass any
procedure available under the DSU for the resolution of disputes". The Panel, however, opined that "other
terms in Article 21.5 support the view that the Article 21.5 procedure is actually a panel procedure with a shorter
deadline" and read the phrase "including whenever possible resort to the original panel" not as meaning that
resort to a panel is generally preferred, but as requesting resort to the panelists that served on the original case,
rather than to other individuals. (Panel Report, US – Continued Suspension , para. 7.351; Panel Report,
Canada – Continued Suspension, para. 7.349)
637Panel Report, US – Continued Suspension , para. 7.356; Panel Report, Canada – Continued
Suspension, para. 7.354.
638Panel Report, US – Continued Suspension , para. 7.355; Panel Report, Canada – Continued
Suspension, para. 7.353.

be allowed to rebut the presumption of [European Communities']
compliance by proving actual non-compliance.
639
281. The Panel noted that, by invoking a presumption of good faith compliance, the European
Communities was supporting its claim th at the United States and Cana da acted inconsistently with
Article 23.1, read together with Articles 22.8 and 3. 7, because they failed to terminate the suspension
of concessions upon the removal of the measure found to be inconsistent w ith a covered agreement
within the meaning of Article 22.8. 640 Thus, having determined that the presumption of good faith
compliance is rebuttable in these proceedings, the Panel observed that, "for all practical purposes, this
amounts to addressing the [European Communities'] 'alternative' claim of violation of
Article 22.8 per se ."
641 The Panel, however, explained that "this is not the result of us merely
disregarding the order in which the European Communities wanted us to review this case". 642 Rather,
the Panel considered that it was "still reviewing th e [European Communities'] claim of violation of
Article 23.1, read together with Articles 22.8 and 3.7" and "not reviewing a claim of violation of
Article 22.8 in isolation."643
4. The Panel's Jurisdiction
282. The Panel recognized that its "terms of refe rence do not include any provision of the SPS
Agreement"644 and that, as a consequence, it was not within its mandate to review the alleged
violations of the SPS Agreement or to make findings under that Agreement. Nonetheless, the Panel
found that it "should address the compatibility of [Directive 2003/74/EC] with the provisions of the
SPS Agreement referred to by the parties to the extent necessary to determine, with respect to the

639Panel Report, US – Continued Suspension , para. 7.357(f); Panel Report, Canada – Continued
Suspension, para. 7.355(f). The Panel clarified:
In reaching these conclusions, we do not consider that we add to or diminish
the rights and obligations of WTO Members. We do not apply the
presumption of good faith compliance independently from the obligations of
the European Communities under th e WTO Agreement. The European
Communities has an obligation to comply with the WTO Agreement in
general and with the recommendations and rulings of the DSB and the general
principle of good faith implies that the European Communities do so in good
faith. In doing so we apply the principle of good faith consistently with WTO
law and general public international law.
(Panel Report, US – Continued Suspension , para. 7.358; Panel Report, Canada – Continued Suspension ,
para. 7.356) (footnotes omitted)
640Panel Report, US – Continued Suspension , para. 7.332; Panel Report, Canada – Continued
Suspension, para. 7.332.
641Panel Report, US – Continued Suspension , para. 7.359; Panel Report, Canada – Continued
Suspension, para. 7.357.
642Panel Report, US – Continued Suspension , para. 7.359; Panel Report, Canada – Continued
Suspension, para. 7.357.
643Panel Report, US – Continued Suspension , para. 7.359; Panel Report, Canada – Continued
Suspension, para. 7.357.
644Panel Report, US – Continued Suspension , para. 7.360; Panel Report, Canada – Continued
Suspension, para. 7.358.

[European Communities'] claim relating to Artic le 22.8, whether the [European Communities']
measure found to be inconsistent in the EC – Hormones case has been removed."
645 Therefore, the
Panel considered "that these are sufficient reasons for it to conclude that it has jurisdiction to consider
the compatibility of the [European Communities'] implementing measure with the SPS Agreement as
part of its review of the claim raised by the Eur opean Communities with respect to Article 22.8 of the
DSU."646 The Panel recognized that it was difficult fo r the European Communities to "identify all
potential problems of incompatibility". 647 Instead, the Panel considered it "preferable, both from a
legal and practical point of view, to consider all the allegations and arguments raised by each party,
as long as the other party had the opportunity to comment on those allegations and arguments". 648 On
this basis, the Panel found that it could review the compatibility of the Directive 2003/74/EC with
Articles 5.1, 5.2649, 5.7, and 3.3 of the SPS Agreement. 650
5. Burden of Proof
283. Regarding the allocation of burden of proof, th e Panel stated that it was for the European
Communities to prove its claim that the United St ates and Canada had breached Article 22.8 of the
DSU.651 This claim was premised on the removal by the European Communities of the measure that

645Panel Report, US – Continued Suspension , para. 7.375; Panel Report, Canada – Continued
Suspension, para. 7.372. The Panel was "mindful of the procedural problems raised by this approach", but did
not consider that, by proceeding in this manner, it was ex ceeding its jurisdiction to the extent that such a review
is necessary in order to address the European Communities' claims under Article 22.8. (Ibid.)
646Panel Report, US – Continued Suspension , para. 7.379; Panel Report, Canada – Continued
Suspension, para. 7.376.
647Panel Report, US – Continued Suspension , para. 7.403; Panel Report, Canada – Continued
Suspension, para. 7.400.
648Panel Report, US – Continued Suspension , para. 7.404; Panel Report, Canada – Continued
Suspension, para. 7.401. (original emphasis)
649The Panel reviewed Article 5.2 of the SPS Agreement in US – Continued Suspension only, because
Canada did not make a claim under this provision.
650Panel Report, US – Continued Suspension , para. 7.411; Panel Report, Canada – Continued
Suspension, para. 7.402.
651Panel Report, US – Continued Suspension , para. 7.383; Panel Report, Canada – Continued
With respect to the violation of Article 22.8 as such, the Panel considered that
it had, in principle, no reason to address burden of proof any differently than
any other panel established under Article 6 of the DSU. Indeed, as stated by
the [European Communities] itself, this case is about a measure taken by [the
United States and Canada, respectively]. The fact that this dispute takes place
in the context of the [European Comm unities'] alleged compliance with the
recommendations and rulings of the DSB in the EC – Hormones dispute
should have no impact on the question of the burden of proof regarding the
actual claim before us. This means th at the principles identified by the
Appellate Body above apply, and that the European Communities must prove
its claim that [the United States and Canada] breach[] Article 22.8 of the
DSU.
(Panel Report, US – Continued Suspension , para. 7.383; Panel Report, Canada – Continued Suspension ,
para. 7.380)

had been found to be inconsistent in EC – Hormones and on its allegation that Directive 2003/74/EC
was consistent with the SPS Agreement. The Panel shared the European Communities' concern that
this could generate for the original respondent at the beginning of the proceedings a situation
"equivalent to having to 'prove a negative', since the spectrum of provisions against which the legality
of the [European Communities'] measure may have to be reviewed remain[ed] very broad" as long as
the original complainants had not made their own allegations of inconsiste ncy of the implementing
measure.652 The Panel noted that the European Communities enjoyed a rebuttable presumption of
good faith compliance and thus, once it had established a prima facie case on the basis of that
presumption, the burden shifted to the United Stat es and Canada to rebut that presumption. The
Panel, however, considered that the United States and Canada "sufficiently refuted the [European
Communities'] allegation of compliance" 653 with the SPS Agreement and, subsequently, the
European Communities responded to the allegations of violation. Therefore, the Panel believed that
the European Communities "never actually ha d to 'prove a negative' in this case." 654 In the Panel's
view, the "presumptions based on good faith enjoye d by each party ... eventually 'neutralized' each
other" such that ultimately, each party had to prove its specific allegations in response to the evidence
submitted by the other party and the Panel followed the practice of other panels to weigh all the
evidence before it.655
284. On this basis, the Panel went on to examine the consistency of Directive 2003/74/EC with the
SPS Agreement , and found that "it has not been estab lished that the European Communities has
removed the measure found to be inc onsistent with a covered agreement."656 Consequently, the Panel
concluded that the European Communities failed to demonstrate a breach of Article 22.8 of the DSU
by the United States and Canada and thus there wa s no violation of Articles 23.1 and 3.7 of the DSU
as a result of a breach of Article 22.8.
657

652Panel Report, US – Continued Suspension , para. 7.385; Panel Report, Canada – Continued
Suspension, para. 7.382.
653Panel Report, US – Continued Suspension , para. 7.385; Panel Report, Canada – Continued
Suspension, para. 7.382.
654Panel Report, US – Continued Suspension , para. 7.385; Panel Report, Canada – Continued
Suspension, para. 7.382.
655Panel Report, US – Continued Suspension , para. 7.386; Panel Report, Canada – Continued
Suspension, para. 7.383.
656Panel Report, US – Continued Suspension , para. 7.847; Panel Report, Canada – Continued
Suspension, para. 7.832. The Panel's analysis is summarized infra, in sections VI and VII.
657Panel Report, US – Continued Suspension , paras. 7.850 and 7.851; Panel Report, Canada –
Continued Suspension, paras. 7.385 and 7.836. Having found a violation of Articles 23.2(a) and 23.1 of the
DSU and addressed the alleged violation of Article 22.8 as part of its review of the European Communities'
second main claim, the Panel considered it unnecessary to address the European Communities' conditional claim
of violation of Article 22.8 of the DSU per se in the alternative. (Panel Report, US – Continued Suspension ,
paras. 7.855; Panel Report, Canada – Continued Suspension, para. 7.840)

6. The Panel's Suggestion

285. After setting out its conclusions, the Panel observe d that the parties had "apparently diverging
opinions as to how this report should be implemented by the respondent". 658 The Panel then noted
that, although it had "performed functions similar to that of an Article 21.5 panel, this was done only
in order to determine whether Article 22.8 of th e DSU had been breached" and that it "was not called
upon, nor [did] it have jurisdiction, to determine the compatibility of Directive 2003/74/EC with the
covered agreements". 659 Thus, the Panel suggested that, "in order to implement its findings under
Article 23 and in order to ensure the prompt settlement of this dispute, [the United States and Canada]
should have recourse to the rules and procedures of the DSU without delay."660
C. Claims and Arguments on Appeal
1. Appeal by the European Communities
286. The European Communities raises three claims of error on appeal. First, the European
Communities submits that the Panel erred by failing to find that Article 23.2(a), read together with
Articles 21.5 and 23.1 of the DSU, required the United States and Canada to initiate Article 21.5
proceedings if they considered that Directiv e 2003/74/EC did not bring the European Communities
into compliance with the DSB's recommendations and rulings in EC – Hormones .661 The European
Communities maintains that recourse to procedures unde r Article 21.5 is required in order to examine
the consistency of Directive 2003/74/EC with the SPS Agreement, and Article 21.5 proceedings may
only be initiated by the original complainan ts, in this case, the United States and Canada. 662
Secondly, the European Communities asserts that Article 22.8 required the termination of the
suspension of concessions upon the adoption and the subsequent notification of Directive 2003/74/EC
to the DSB. 663 Thus, the European Communities considers that the Panel erred in finding that its
claim under Article 23.1, read together with Artic les 22.8 and 3.7 of the DSU, was premised on the
actual conformity of Directive 2003/74/EC with the SPS Agreement 664; as a result, the Panel also
erred in finding that the United States and Canada did not breach Article 22.8 of the DSU, even
though they continued to suspend concessions without having recourse to Article 21.5. Thirdly, the

658Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.
659Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.
660Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.
662Ibid., paras. 49 and 73.
663Ibid., para. 155.
664Ibid., paras. 99 and 100 (referring to Panel Report, US – Continued Suspension , para. 7.272; and
Panel Report, Canada – Continued Suspension, para. 7.288).

European Communities alleges that the Panel went beyond its terms of reference and erroneously
assumed the functions of an Article 21.5 panel by examining the compatibility of
Directive 2003/74/EC with the SPS Agreement .665 In addition to these three claims of error, the
European Communities requests the Appellate Body to "improve" 666 the Panel's suggestion that the
United States and Canada "should have recourse to the rules and procedures of the DSU without
delay"667, so as to make it clear that the United States and Canada must cease applying their
suspension of concessions and have recourse to Artic le 21.5 of the DSU, or other dispute settlement
proceedings to which the parties may agree, in or der to seek multilateral resolution of any remaining
disagreements over the European Communities' import ban.668
287. The United States maintains that the Panel correctly interpreted the phrase "recourse to
dispute settlement in accordance with the rules and procedures of this Understanding" in
Article 23.2(a) as encompassing all procedures under the DSU, rather than relating exclusively to
Article 21.5 panel proceedings. 669 The United States further submits that Article 21.5 refers to "these
dispute settlement procedures" without specifying any particular subset of the procedures provided in
the DSU.670 In addition, the United States argues that th e Panel correctly interpreted Article 22.8 of
the DSU when finding that the United States did not breach its obligation under that provision. The
United States asserts that the European Comm unities "simply switched" the legal instruments
underlying the import ban and, in so doing, failed to remove the ban, that is, the inconsistent measure
within the meaning of Article 22.8. 671 The United States further claims that the European
Communities specifically asked the Panel to review whether the United States acted inconsistently
with Article 22.8. Thus, in order to adjudicate that claim, the Panel correctly interpreted and applied
Article 22.8 by examining the consiste ncy of Directive 2003/74/EC with the SPS Agreement and did
not exceed its terms of reference. 672 Moreover, the United States ar gues that the Panel's suggestion
does not require it to terminate the suspension of concessions. Finally, the United States observes that
"improving" the suggestion, as requested by the Euro pean Communities, "is not within the purview of
what the Appellate Body is called upon to do with respect to panel reports".673

666Ibid., para. 479.
667Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.
670Ibid., para. 127.
671Ibid., para. 99.
672Ibid., paras. 120 and 121.
673Ibid., para. 140. The United States points out that "the Appellate Body, under Article 17.13, 'may
uphold, modify, or reverse the legal findings and conclusions of the panel', but not its suggestions, which are
made pursuant to Article 19.1 of the DSU."

288. Canada submits that, contrary to the European Communities' contentions, the Panel correctly
found that "recourse to dispute settlement" within th e meaning of Article 23.2(a) is not limited to
Article 21.5 panel proceedings. Canada mainta ins that the European Communities' unilateral
assertion of compliance regarding Directive 2003/ 74/EC does not compel Canada to initiate
Article 21.5 proceedings, and does not require Ca nada to lift the suspension of concessions.
674
Canada alleges that the European Communities, as the original respondent, is not legally precluded
from initiating Article 21.5 proceedings 675, and that other procedural avenues are also available to the
European Communities, including new panel proceedings. 676 Canada further claims that the Panel
correctly interpreted Article 22.8 by concluding th at the phrase "until such time as the measure found
to be inconsistent with a covered agreement has be en removed" means that the inconsistency itself,
and not only the originally impugned measure, has been removed. 677 Finally, Canada maintains that
the Panel did not exceed its terms of reference in examining the consistency of Directive 2003/74/EC
with the SPS Agreement. Rather, Canada asserts that, because the European Communities' claim that
Canada breached Article 22.8 is premised on act ual compliance by the European Communities, the
Panel was required to review the consis tency of Directive 2003/74/EC with the SPS Agreement to
resolve the dispute.678
2. Other Appeals by the United States and Canada
289. The United States claims that the Panel erre d in finding that the United States was "seeking
the redress of a violation" within the meaning of Article 23.1 of the DSU through the continued
suspension of concessions. The United States maintains that it "had extensive and lengthy recourse to
multiple procedures under the DSU" 679 before obtaining the authorization of the DSB to suspend
concessions on 26 July 1999, and this authorization to suspend concessions has never been revoked.680
By finding that the United States was seeking the redress of a violation, the Panel "re-
characteriz[ed]"
681, without any legal basis, the United Stat es' suspension of concessions as directed
against Directive 2003/74/EC. Furthermore, the United States takes issue with the Panel's finding that
the United States' statements regarding Dir ective 2003/74/EC at DSB meetings constituted a
"determination" within the meaning of Article 23.2( a) of the DSU. The United States maintains that
such a "determination" cannot be inferred or imp lied, and the Panel erred in drawing such an

675Ibid., para. 11.
676Ibid., paras. 14 and 15.
677Ibid., paras. 25 and 26.
678Ibid., para. 41.
679United States' other appellant's submission, para. 29.
680Ibid., para. 18.
681Ibid., para. 31.

inference from the United States' "inaction" 682 regarding the suspension of concessions. In the event
that the Appellate Body upholds the Panel's findi ngs under Articles 23.2(a) and 23.1, the United
States requests reversal of th e Panel's "erroneous suggestion" 683 that the United States "must have
recourse to the rules and procedures of the DSU w ithout delay". The United States contends that
"recourse to the rules and procedures" of the DSU has already been achieved by the United States'
participation in this dispute initiated by the European Communities. 684 The United States further
submits that the Panel erred in concluding that it had no jurisdiction to rule on the compatibility of
Directive 2003/74/EC with the SPS Agreement . Consequently, the Panel's findings regarding the
inconsistency of Directive 2003/74/EC with the SPS Agreement should be considered "direct"
findings and the conclusion that the United States ne eds to bring its measure into conformity with the
DSU should be reversed.685
290. Canada alleges that the Panel erred by exam ining the European Communities' claim under
Articles 23.2(a) and 23.1 in isolation from its anal ysis under Article 22.8 of the DSU. According to
Canada, the Panel should have firs t applied the requirements of Artic le 22.8 to determine whether the
suspension of concessions had to be terminated, and the Panel's failure to do so resulted in
"contradictory findings" 686 concerning the first and second set s of claims of the European
Communities. Canada conditionally appeals two other issues, in case the Appellate Body were to find
that the Panel was correct in making findings in respect of Articles 23.1 and 23.2(a) without taking
into account its finding in respect of Article 22.8. Fi rst, Canada contends that, even if the Panel were
correct to consider Article 23 in isolation, the Panel erred in finding that Canada was "seeking the
redress" of a WTO violation by continuing the susp ension of concessions. Canada maintains that it
has "sought and obtained" 687 the DSB's authorization to suspend concessions and that, contrary to the
Panel's finding, simply because Directive 2003/74/EC is a new measure does not imply that the legal
basis for Canada's suspension of concessions has changed. 688 Secondly, Canada alleges that the Panel
erred in finding that Canada made a unilate ral determination of non-compliance regarding
Directive 2003/74/EC, within the meaning of Article 23. 2(a), on the basis of Canada's statements at
the DSB meetings, as well as the fact that Canada continued to suspend concessions. 689 I n t h e
alternative, should the Appellate Body uphold the Panel's findings under Articles 23.2(a) and 23.1,

682United States' other appellant's submission, para. 98.
683Ibid., para. 108.
684Ibid., para. 112.
685Ibid., para. 119. The United States clarifies that th e Appellate Body need not address these last two
points should it reverse the Panel's findings and conclusions concerning Articles 23.1 and 23.2(a) of the DSU.
(Ibid., para. 9)
686Canada's other appellant's submission, para. 43.
687Ibid., para. 80.
688Ibid., para. 82.
689Ibid., para. 87.

Canada requests the Appellate Body to reverse the Panel's conclusion that it did not have jurisdiction
to determine the compatibility of Directive 2003/74/EC with the SPS Agreement.
690 Finally, Canada
claims that the Panel erred in making the suggesti on that "Canada should have recourse to the rules
and procedures of the DSU without delay" 691 because this conclusion, according to Canada,
contradicts the Panel's own finding that Canada had not breached Article 22.8.692
291. The European Communities responds that Article 23 of the DSU is fully applicable in the
implementation and post-suspension stage of a dispute 693, because the multilateral dispute settlement
system relies on good faith compliance and the pr esumption of conformity with the covered
agreements of measures taken by WTO Members. 694 The European Communities further contends
that the adoption of a measure taken to comply, wh ich must be presumed to be consistent with the
WTO agreements, triggers the following duties on the original complainant: (i) to form a view on
whether the measure that has been found to be inconsistent has been removed; (ii) to have recourse to
Article 21.5 proceedings if it considers that the meas ure taken to comply is not consistent with the
covered agreements; and (iii) to cease the suspension of concessions. 695 The European Communities
disagrees with the argument of the United States and Canada that they are not seeking the redress of a
violation within the meaning of Article 23.1 by maintaining the suspensi on of concessions, because
the notification of Directive 2003/74/EC does not change the legal basis for the suspension of
concessions.696 The European Communities submits that Article 22.8 of the DSU does not specify
that it is for the original respondent to s how that it has removed the original measure 697, and that, in
any event, the European Communitie s has effectively shown that the inconsistent measure, namely
Directive 96/22/EC, has been removed. 698 Thus, the United States and Canada could no longer
maintain their suspension of concessions once the European Co mmunities had adopted
Directive 2003/74/EC.699
292. The European Communities furt her argues that the Panel co rrectly found that the United
States and Canada made a determination to the effect that a violation has occurred within the meaning
of Article 23.2(a) of the DSU. The European Communities maintains that the statements by the
United States and Canada at the DSB meetings, t ogether with the fact that the United States and
Canada have maintained their suspension of c oncessions, indicate that they made a "definitive"

690Canada's other appellant's submission, para. 92.
691Ibid., para. 96.
692Ibid., para. 95.
694Ibid., para. 40.
695Ibid., para. 62.
696Ibid., paras. 103, 104, and 113.
697Ibid., para. 114.
698Ibid., para. 115.
699Ibid., paras. 105 and 115.

determination with sufficient "firmness or im mutability" regarding the inconsistency of
Directive 2003/74/EC with the covered agreements. 700 Furthermore, the European Communities
disagrees with the United States' view that the Pane l inferred the existence of a "determination" from
inaction. According to the Eur opean Communities, the United Stat es "actively considered" that
Directive 2003/74/EC is not consistent with the co vered agreements and "actively continued" the
suspension of concessions.701
3. Arguments of the Third Participants
293. Australia agrees with the European Commun ities that the disagreement as to whether
Directive 2003/74/EC has removed the measure found to be inconsistent with the WTO agreements
should have been resolved through recour se to panel proceedings under Article 21.5. 702 However,
Australia believes that it is open to a Member to continue the suspension of concessions pending the
outcome of the Article 21.5 panel proceedings.
703 Finally, Australia underscores that no provision of
the SPS Agreement is included in the Panel's terms of reference, and that to include claims under the
SPS Agreement within the scope of this dispute effectivel y reverses the burden of proof between the
parties. This "is inconsistent with a fundament al principle ... that the party asserting non-compliance
with a covered agreement bears the burden of establishing a prima facie case."704
294. Brazil contends that none of the three cond itions set out in Article 22.8 regarding the
termination of the suspension of concessions has be en fulfilled, and thus the DSB's authorization
granted to the United States and Canada to suspend concessions remains in place. 705 Brazil agrees
with the Panel that the removal of the measure found to be inconsistent, within the meaning of
Article 22.8, must be interpreted as requiring subs tantive compliance. Furthermore, Brazil asserts
that, in the post-suspension stage of a dispute, the original responding Member bears the burden of
proving that its implementing measure is WTO-consistent.706
295. New Zealand submits that the Panel failed to in terpret Articles 23.1 and 23.2(a) in the context
of Article 22.8 of the DSU. According to New Zeal and, Article 22.8 refers to situations where the
original inconsistent measure has actually been removed, and not where the measure is merely
claimed to have been removed. 707 Therefore, New Zealand considers that the Panel erred in finding

700European Communities' appellee's submission, paras. 126 and 136-138.
701Ibid., para. 133.
702Australia's third participant's submission, para. 15.
703Ibid., para. 21.
704Ibid., para. 25.
705Brazil's third participant's submission, para. 10.
706Ibid., para. 33.
707New Zealand's third participant's submission, para. 3.17.

that the European Communities' claims under Articl es 23.1 and 23.2(a) were completely unrelated to
whether the European Communities had implemented the DSB's recommendations and rulings in
EC – Hormones.
708
296. Norway maintains that Article 22.8 requires that the suspension of concessions be temporary
and conditional. Thus, once compliance is achieve d, be it through a simple revocation of the
inconsistent measure or its repla cement with another measure that ensures compliance, the right to
suspend concessions " automatically lapses" 709 without a need for formal revocation of the
authorization by the DSB. Where the parties disag ree as to whether the measure taken to comply
actually achieves compliance, as is the case in this dispute, both the original complainant and the
original respondent can resort to Article 21.5 panel proceedings.710
D. Cessation of the Suspension of Concessions – Article 22.8 of the DSU
1. Preliminary Comments
297. The European Communities alleges that the Panel erred by failing to find that Article 23.2(a),
read together with Articles 21.5 and 23.1 of th e DSU, required the United States and Canada to
initiate Article 21.5 proceedings if they consid ered that Directive 2003/74/EC did not bring the
European Communities into compliance with the DSB's recommendations and rulings in EC –
Hormones.711 The European Communities further asserts that the Panel erred in finding that
Article 22.8 of the DSU requires actual complianc e with the DSB's recommendations and rulings in
EC – Hormones before the suspension of c oncessions has to be terminated 712, and that the Panel
exceeded its terms of reference by examining such compliance when an alyzing the European
Communities' claims under Articles 23.1, 22.8, and 3.7 of the DSU.713
298. For the sake of simplicity, we refer to the Me mber applying the suspension of concessions
pursuant to the DSB's authorization as the "suspend ing Member". We refer to the Member against
whom the suspension of concessions is applied as the "implementing Member".
299. The European Communities' claims raise seve ral questions concerning the position of the
suspending Member in circumstances where a measure is taken by the implementing Member to
comply with the DSB's recommendations and ruli ngs. The first question concerns whether the

708New Zealand's third participant's submission, para. 3.18.
709Norway's third participant's submission, para. 6. (original emphasis)
710Ibid., para. 9.
712Ibid., para. 152.
713Ibid., para. 175.

suspending Member is required to initiate Artic le 21.5 proceedings, if it considers that the
implementing measure fails to bring about complianc e. The second question concerns the substantive
issue as to whether an obligation to lift the suspension of concessions, pursuant to Article 22.8, arises
when an implementing measure replaces the impugned measure. We recall that this dispute concerns
the legality of the suspension of concessions maintain ed by the United States and Canada subsequent
to the adoption and notification of the Eur opean Communities' implementing measure. The
suspension of concessions that is authorized by the DSB must be applied consistently with
Article 22.8 of the DSU. Therefore, we first examine whether the Panel erred in finding that
Article 22.8 requires actual compliance by the European Communities with the DSB's
recommendations and rulings before the suspension of concessions must be terminated by the United
States and Canada. We will then turn, in section E, to the issue of whether Article 21.5 proceedings
are the proper procedures to follow and which party must initiate such proceedings.
2. When Must a WTO Member Cease to Suspend Concessions Pursuant to
Article 22.8 of the DSU?
300. The European Communities submits that its clai ms under Article 23.1, read together with
Articles 22.8 and 3.7 of the DSU, are based on its " interpretation of Article 22.8, according to which
the words 'the measure found to be inconsistent with a covered agreement' refer to the measure
identified in the recommendations of the DSB". 714 The European Communities submits that the
"measure found to be inconsistent with a covered agreement" in EC – Hormones was
Directive 96/22/EC.715 The European Communities mainta ins that Directive 96/22/EC "was
removed"716, within the meaning of Article 22.8, after being replaced by Directive 2003/74/EC. Thus,
by continuing the suspension of concessions, th e United States and Canada made a unilateral
determination that Directive 2003/74/EC was not consistent with the SPS Agreement, in violation of
Article 23.1 "read in the light of Article 22.8". 717 Therefore, the Europ ean Communities asserts that,
contrary to the Panel's finding, it "never argued" th at the claim under Article 23.1, read together with
Articles 22.8 and 3.7 of the DSU, was premised on a violation of Article 22.8 by the United States and
Canada and "never argued" that this claim was premised on the conformity of the implementing
measure with the SPS Agreement.
718
301. The European Communities' arguments are premis ed on its interpretation of Article 22.8 as
requiring the termination of suspension of concessions whenever an implementing measure is adopted

714European Communities' appellant's submission, para. 102. (original emphasis)
715Ibid., para. 129.
716Ibid., para. 146.
717Ibid., para. 102.
718Ibid., paras. 99 and 100 (referring to Panel Report, US – Continued Suspension , para. 7.272; and
Panel Report, Canada – Continued Suspension, para. 7.288).

to replace the measure found to be inconsistent in proceedings that led to the DSB's recommendations
and rulings. According to this inte rpretation, termination is required irrespective of the content of the
implementing measure. Therefore, we proceed to examine the proper interpretation of Article 22.8
and, in particular, the phrase "the measure found to be inconsistent with a covered agreement has been
removed" in that provision.
302. Article 3.7 of the DSU states that "the first objective of the dispute settlement mechanism is
usually to secure the withdrawal of the measures con cerned if these are found to be inconsistent with
... the covered agreements." If this cannot be ach ieved, the "last resort" provided under the DSU "to
the Member invoking the dispute settlement pr ocedures is the possibility of suspending the
application of concessions ... on a discriminatory basis vis-à-vis the other Member, subject to
authorization by the DSB". Acco rdingly, in the event that the DSB's recommendations and rulings
are not implemented within a reasonable period of time, Article 22.1 provid es for the suspension of
concessions as a "temporary measure" available to th e Member that originally initiated the dispute
settlement procedures.
719
303. The suspension of concessions may not be mainta ined indefinitely. The authorization to
suspend concessions is contingent and limited in time. Article 22.8 of the DSU provides that the
suspension of concessions shall be "temporary" a nd shall only be applied until one of the three
resolutive conditions set out in that provision obtains, namely, when:
... the measure found to be inconsistent with a covered agreement has
been removed, or the Member that must implement recommendations
or rulings provides a solution to the nullification or impairment of
benefits, or a mutually satisfactory solution is reached.
304. The participants agree that this dispute concerns the first condition listed in Article 22.8, that
is, when "the measure found to be inconsistent with a covered agreement has been removed". In most
cases, the first condition in Article 22.8 will be met where the implementing Member repeals the
inconsistent measure without adopti ng any new measure in its place. The issue that arises in this
dispute, however, is whether an inconsistent m easure should be considered "removed" when it is
replaced by a new implementing measure. Taken liter ally, removal of the inconsistent measure could
mean that the implementing Member has adopted an act that formally repeals the inconsistent
measure and replaces it with another measure, regardl ess of the content of the new measure and, in

719Article 22.6 specifies that the DSB, upon a request made within 30 days of the expiry of the
reasonable period of time by the Member invoking the di spute settlement procedures, shall grant authorization
to suspend concessions, or decide by consensus to reject the request. In addition, an arbitration procedure is
envisaged under Article 22.6 in order to determine the proper level of the suspension of concessions and/or the
sectors with respect to which the suspension is author ized. As regards the level of the suspension of
concessions, Article 22.4 requires that it be "equivalent to the level of the nullification or impairment".

particular, of its compliance with the DSB's recommendations and rulings. Such a literal
interpretation of the first condition in Article 22. 8, however, does not comport with the other two
conditions provided in that provision. The second condition in Article 22.8 requires termination of
the suspension of concessions if "the Member th at must implement recommendations or rulings
provides a solution to the nullification or impairment of benefits", while the third condition refers to a
situation where "a mutually agreed solution is reached". The reference to "a solution to the
nullification or impairment of benefits" indicat es that it is the inconsistency resulting from the
measure, rather than the mere existence of the measure, that must be remedied before the obligation to
cease the suspension of concessions arises. More over, by predicating the termination of the
suspension of concessions on a "solution" either provided unilaterally (in the second condition) or
reached by agreement (in the third condition), the tw o conditions require substantive resolution of the
dispute. Under these two conditions , termination of the suspension of concessions is the final step in
a dispute to which there is substantive resolution of the inconsistency found by the DSB. To achieve
a similar result under the first condition, Ar ticle 22.8 cannot be understood as requiring the
termination of the suspension of concessions merely on the basis of a formal repeal of the measure
that has been found to be inconsistent by the DSB. All three conditions in Article 22.8 concern the
circumstances under which the suspension of concessi ons must be terminated because there has been
a final and substantive resolution to the dispute.
305. Reading the first sentence of Article 22.8 as a whole, the "removal" of "the measure found to
be inconsistent" should be properly understood to require nothing less than substantive removal of the
inconsistent measure. Substantiv e removal may be achieved by repea ling the inconsistent measure.
Where a WTO Member adopts an implementing measure that replaces the inconsistent measure, the
implementing measure must bring about substantive compliance, that is, compliance with the DSB's
recommendations and rulings and cons istency with the covered agreem ents. We recognize that the
first condition in Article 22.8 may be understood more narrowly as referring only to compliance with
the DSB's recommendations and rulings. However, a dispute could not be brought to its finality
unless the implementing measure rectifies the inco nsistencies found in the DSB's recommendations
and rulings and is not in other wa ys inconsistent with the covered agreements. Interpreting the first
condition as requiring substantive compliance, theref ore, will ensure that the first condition in
Article 22.8 achieves the result obtained under the othe r two conditions in the same provision, that is,
the final and substantive resolution of a dispute. Such an interpretation is also congruent with the
scope of compliance proceedings under Article 21.5 of th e DSU. Pursuant to the first sentence of that
provision, compliance proceedings cover the existen ce and consistency with the covered agreements
of a measure taken to comply with the DSB's reco mmendations and rulings. As further discussed in

section E, proceedings under Article 21.5 is the proper procedure to follow in determining whether the
inconsistent measure has been removed within the meaning of Article 22.8.
306. In terms of the first condition in Article 22.8, therefore, the application of the suspension of
concessions may continue until the removal of the measure found by the DSB to be inconsistent
results in substantive compliance. If a disagreemen t arises as to whether substantive compliance is
achieved, the fulfilment of the first conditio n in Article 22.8 cannot be confirmed unless the
disagreement is resolved through multilateral dispute settlement. Thus, the suspension of concessions
continues to apply pending the outcome of the di spute settlement proceedings concerning the first
resolutive condition in Article 22.8. If, by rec ourse to a multilateral dispute settlement process, the
implementing measure is found to bring about subs tantive compliance, the suspension of concessions
may no longer be applied pursuant to the firs t condition in Article 22.8 and cessation of the
suspension is required.
307. This interpretation is supported by the second sentence of Article 22.8, which provides:
In accordance with paragraph 6 of Ar ticle 21, the DSB shall continue
to keep under surveillance the implementation of adopted
recommendations or rulings, including those cases where ...
concessions or other obligations have been suspended but the
recommendations to bring a measur e into conformity with the
covered agreements have not been implemented.
The second sentence of Article 22.8 requires surv eillance by the DSB until its recommendations to
bring a measure into conformity with the covered agreements have been implemented. In other
words, DSB surveillance is required until substantive compliance is achieved.
308. Moreover, this interpretation of Article 22.8 is consistent with the broader context provided
by other provisions of the DSU relating to impl ementation of the DSB's recommendations and rulings
and with the object and purpose of the DSU. Article 22.1 of the DSU provides that the suspension of
concessions is not to be "preferred to full implementation of a recommendation to bring a measure
into conformity with the covered agreements".
720 The requirements in Article 21.5 to examine
whether compliance measures exist and whether the me asures taken to comply are consistent with the
covered agreements also suggest that substantive co mpliance is required, rather than formal removal
of the inconsistent measure. Furthermore, pursuant to Article 3.7, the suspension of concessions is the
"last resort" available to the Member invoking th e dispute settlement procedures when compliance
with the DSB's recommendations and rulings has not been achieved within a reasonable period of

720Moreover, pursuant to Article 3.3, the "prompt settlement" of disputes "is essential to the effective
functioning of the WTO and the maintenance of a proper balance between the rights and obligations of
Members".

time. To require the termination of suspension of concessions before substantive compliance is
achieved would significantly weaken the effectivenes s of the WTO dispute settlement mechanism. A
Member authorized by the DSB to suspend con cessions enjoys the assurance under Article 22.8 that,
until substantive compliance is achieved or, in case of disagreement, multilaterally-confirmed, the
suspension of concessions continues to be permitted under the DSU.
309. The European Communities contends that the th ree conditions in Article 22.8 concerning the
termination of the suspension of concessions are altern atives to each other and that it is sufficient to
only look at one condition without considering th e others when determining whether the suspension
of concessions must cease. 721 We agree that the three conditions in Article 22.8 are alternatives to
each other. However, they are alternatives leading to the same result, that is, the termination of the
suspension of concessions and final resolution of a di spute. It is difficult to envisage how a dispute
could be finally resolved merely because the inconsis tent measure is formally removed, regardless of
whether substantive compliance has been achieved. The European Communities further submits that
the second sentence of Article 22.8 contemplates that there may be situations in which "a measure has
been removed" but "the matter rema ins under surveillance of the DSB". 722 The second sentence of
Article 22.8 specifically requires surveillance by the DSB where "concessions ... have been suspended
but the recommendations to bring a measure into conformity with the covered agreement has not been
implemented". Thus, this provision clearly situates the ongoing surveillance within the context of the
continued suspension of concessions, indicating that the authorization to suspend concessions does
not lapse under Article 22.8 until substantive co mpliance is achieved. Moreover, the European
Communities' position, which requires the terminatio n of the suspension of concessions whenever an
implementing measure is notified, undermines the effectiveness of the suspension of concessions in
inducing full compliance. Such a position is di fficult to reconcile with the DSU's objective of
providing security and predictability to the multilateral trading system.
310. Although Article 22.8 sets forth the resolutive conditions under which the suspension of
concessions must cease to apply, it does not identify the procedures to be followed should a dispute
arise as to whether one of the conditions has been satisfied. This does not mean that Members can
remain passive once concessions have been suspe nded pursuant to the DSB's authorization. The
requirement that the suspension of concessions must be temporary indicates that the suspension of
concessions, as the last resort available under the DSU when compliance is not achieved, is an
abnormal state of affairs that is not meant to rema in indefinitely. Members must act in a cooperative
manner so that the normal state of affairs, that is, compliance with the covered agreements and

721European Communities' statement at the oral hearing.
722Ibid.

absence of the suspension of concessions, may be restored as quickly as possible. Thus, both the
suspending Member and the implementing Member share the responsibility to ensure that the
application of the suspension of concessions is "tem porary". Moreover, the fulfilment of the first
resolutive condition in Article 22.8 requires certain actions from both Members. The implementing
Member is required to remove the measure found to be inconsistent with a covered agreement. At the
same time, the suspending Member is required to ensure that the suspension of concessions is only
applied within the limits of Article 22.8. Where, as in this dispute, an implementing measure is taken
and Members disagree as to whether this measur e achieves substantive co mpliance, both Members
have a duty to engage in WTO dispute settlement in order to establish whether the conditions in
Article 22.8 have been met and whether, as a con sequence, the suspension of concessions must be
terminated. Once substantive compliance has be en confirmed through WTO dispute settlement
procedures, the authorization to suspend concessions lapses by operation of law ( ipso jure), because it
has been determined that one of the resolutive conditions pursuant to Article 22.8 is fulfilled.
723 We
examine in section E the procedural avenues that w ould be available should a disagreement arise as to
whether the conditions in Article 22.8 have been satisfied.
3. The Panel's Analysis Concerning Article 22.8 of the DSU
311. The Panel found that "the phrase 'until such time as the measure found to be inconsistent with
a covered agreement has been removed' [in Article 22.8] means the illegality itself, and not only the
measure, has been removed." 724 The Panel considered that this interpretation is confirmed by the
second sentence of Article 22.8, which refers to th e DSB keeping under surveillance the situations in
which concessions have been suspended but the recommendations and rulings of the DSB have not
been implemented. In the Panel's view, the second sentence implied that "wha t is to be achieved is
not the removal of the measure but the actual compliance with the recommendations and rulings of
the DSB."
725 Therefore, according to the Panel, "Artic le 22.8 may be breached only if the European
Communities has complied with the recommendations a nd rulings of the DSB and [the United States
and Canada have] failed to immediately remove its suspension of concessions or other obligations." 726
We consider that the Panel was correct in reaching this finding. In subsectio n 2, we found that the

723In contrast, where an inconsistent measure is removed without being replaced by a new measure, the
objective condition in Article 22.8 would, in most cases, be met and the authority to suspend concessions would
automatically lapse.
724Panel Report, US – Continued Suspension , para. 7.283; Panel Report, Canada – Continued
Suspension, para. 7.299.
725Panel Report, US – Continued Suspension , para. 7.284; Panel Report, Canada – Continued
Suspension, para. 7.300.
726Panel Report, US – Continued Suspension , para. 7.285; Panel Report, Canada – Continued
Suspension, para. 7.301.

terms "until such time as the inconsistent measu re has been removed" in Article 22.8 require
substantive compliance and that, until it is achieved, the suspension of concessions may continue.
312. The European Communities highlights the Panel' s statements, made in the context of its
findings of procedural violations under Articles 23.2(a) and 23.1, that Directive 2003/74/EC "shows
all the signs of an implementing measure ... adopted in good faith". 727 The European Communities
maintains that once a Member has adopted an impl ementing measure which it believes in good faith
to bring about compliance, the suspension of concessions can no longer be applied. 728 The question
raised by this claim, therefore, is whether the "removal" of an inconsistent measure within the
meaning of Article 22.8 may be established on the sole basis of a presumption of good faith
compliance by the European Communities.
313. The DSU makes reference to "good faith" in two provisions, namely, Article 4.3, which
relates to consultations, and Artic le 3.10, which provides that, "if a dispute arises, all Members will
engage in these procedures in good faith in an e ffort to resolve the dispute." These provisions require
Members to act in good faith with respect to the initiation of a dispute and in their conduct during a
dispute settlement proceedings. Neither provision specifically addresses the question of whether a
Member enjoys a presumption of good faith compliance in respect of measures taken to implement
the DSB's recommendations and rulings.
314. The Appellate Body has recognized that the principle of good faith, a principle well-
recognized in international law, applies in WTO di spute settlement. As the Appellate Body stated in
EC – Sardines:
We must assume that Members of the WTO will abide by their treaty
obligations in good faith, as required by the principle of pacta sunt
servanda articulated in Article 26 of the Vienna Convention. And,
always in dispute settlement, every Member of the WTO must assume
the good faith of every other Member.
729 (emphasis added)
315. The Member required to implement the DS B's recommendations and rulings may be
presumed to have acted in good faith when ad opting the implementing measure. However, the
presumption of good faith attaches to the actor, but not to the action itself. Thus, whilst the
presumption of good faith concerns the reasons for which a Member acts, such a presumption does
not answer the question whether the measure taken by the implementing Member has indeed brought
about substantive compliance. Similarly, the suspending Member can also be presumed to act in good

727Panel Report, US – Continued Suspension , para. 7.238; Panel Report, Canada – Continued
Suspension, para. 7.231.

faith in maintaining the suspension of concessions, but that does not entail that the suspension of
concessions is necessarily consistent with Article 22. 8. When a disagreement arises as to whether the
implementing measure achieves substantive complia nce and whether the suspension of concessions
may continue, it should be submitted for adjudication in dispute settlement proceedings. In sum, a
presumption of good faith, which can be claimed by bot h parties, does not offer a clear answer to the
question of when inconsistencies arising from the orig inal measure should be considered to have been
removed within the meaning of Article 22.8 of the DSU.
316. In the light of our understanding of the presumption of good faith, we do not agree with the
European Communities that there is a c ontradiction between the proposition that
Directive 2003/74/EC is a measure adopted in good fa ith and the interpretation of Article 22.8 that
substantive compliance is required fo r the first resolutive condition to be met. Even if the European
Communities should be presumed to have acted in good faith when adopting the implementing
measure, that does not mean that the measure has achieved substantive compliance.
317. If the removal of a measure found to be inconsiste nt were to be established on the sole basis
of a presumption of good faith compliance, the DSB's authorization to suspend concessions would
expire upon the adoption of an implementing meas ure and a mere unilateral declaration of the
implementing Member that it removed the inconsiste nt measure. As described above, the suspension
of concession is the last resort available to a Member who has successfully challenged the consistency
with the covered agreements of another Member's measure. The DSB's authorization to suspend
concessions is necessarily preceded by a multi-stag e dispute settlement process. This process may
encompass: (i) consultations, (ii) panel proceedings , (iii) appellate review, (iv) the adoption of the
panel and Appellate Body re ports, (v) an arbitration to determine the reasonable period of time for
implementation, (vi) compliance panel proceedings, (vii) compliance appellate review, and (viii) an
arbitration to determine the level of suspensi on of concessions. The authorization to suspend
concessions is thus granted following a long pr ocess of multilateral dispute settlement in which
relevant adjudicative bodies, as well as the DSB, render multilateral decisions at key stages of the
process. To allow the suspension of concessions to expire as a result of the application of a
presumption of good faith with respect to a unilateral declaration of compliance would create an
imbalance between the rights and obligations of the complainants and the respondents enshrined in
the DSU and would undermine the effectiveness of the dispute settlement mechanism in providing
security and predictability. Rather, if the origin al respondent considers that it has implemented the
DSB's recommendations and rulings such that it has achieved substantive compliance, and the
complainant who has been authorized to suspend concessions disagrees, that disagreement must be
resolved multilaterally through WTO dispute settleme nt. Thus, we share Canada's view that the

interpretation proposed by the European Communities is an "overly narrow and formalistic
interpretation that fails to situate Article 22.8 in its proper context within the terms of the DSU."730
318. Consequently, we disagree with the Europ ean Communities' assertion that "the mere
existence of an implementing measure adopted in good faith and its subsequent notification to the
DSB" requires the United States and Canada to cease the application of the suspension of concessions
authorized by the DSB.731
319. The European Communities additi onally alleges that the Panel "fundamentally erred" in the
manner in which it identified the "measure found to be inconsistent with a covered agreement" in
order to determine whether "it has been re moved" within the meaning of Article 22.8. 732 T h e
European Communities claims that the Panel found that Directive 96/22/EC, that is, the measure
found to be inconsistent with the SPS Agreement in EC – Hormones, "was removed". Nonetheless,
the Panel also held that considering Directive 96/22/EC as the measure found to be inconsistent with a
covered agreement within the meaning of Article 22.8 is "unsatisfactory, as Directive 96/22/EC was
replaced by Directive 2003/74/EC which also imposes an import ban".733
320. We recall that, in EC – Hormones , Directive 96/22/EC was found to be inconsistent with
Article 5.1 of the SPS Agreement because the import ban imposed by that Directive on meat from
cattle treated with the six hormones at issue was not based on a risk assessment that conformed to the
requirements of the SPS Agreement .734 In order to comply with the DSB's recommendations and
rulings, the European Communities had to remove th e import ban or ensure that the import ban had a
proper justification under the SPS Agreement by being based on a risk assessment under Article 5.1
or as a provisional measure under Article 5.7. T hus, the replacement of Directive 96/22/EC with
Directive 2003/74/EC is insufficient for the measure found to be inconsistent in EC – Hormones to
be considered removed for purposes of Article 22.8 of the DSU.
321. The European Communities also asserts that "i nterpreting Article 22.8 as referring to 'actual
compliance' allows the original complaining Memb er to make a unilateral determination of the
substantive merits of the 'measure taken to comply ', without recourse to the procedures of the DSU
and without respecting Article 23.1 of the DSU." 735 In our view, this argument conflates the proper
interpretation of Article 22.8 with the issue as to the proper procedure for resolving a dispute

731European Communities' appellant's submission, para. 101. (original emphasis)
732Ibid., para. 145.
733Panel Report, US – Continued Suspension , para. 7.283; Panel Report, Canada – Continued
Suspension, para. 7.299.
734Appellate Body Report, EC – Hormones, paras. 6 and 253.

involving Article 22.8. As discussed, Article 22.8 set s forth the resolutive conditions under which the
suspension of concessions must cease, including the condition that the suspension of concessions shall
only apply until the measure found to be inconsistent has been removed. The correct interpretation of
Article 22.8 is that once substantive compliance is achieved, the suspending Member is required to
cease the application of the suspension of concession s. This, however, does not answer the question
regarding the procedures to be followed in the even t a disagreement arises as to whether substantive
compliance has been achieved and th e resolutive condition in Article 22. 8 has been met. We address
the available procedural avenues in section E.
4. Did the Panel Exceed Its Mandate by Addressing the Conformity of
Directive 2003/74/EC with the SPS Agreement?
322. The European Communities claims that, in the context of reviewing the European
Communities' second set of main claims under Article 23.1, read together with Articles 22.8 and 3.7
of the DSU, the Panel exceeded the scope of its mandate by examining the conformity of
Directive 2003/74/EC with the SPS Agreement. The European Communities maintains that it made a
claim under Article 22.8 of the DSU in the alternative, that is, only in the event that the Panel did not
find any violation under Articles 23.1, 23.2(a), 3.7, 22.8, and 21.5 of the DSU. 736 In the alternative
claim, the European Communities alleges that the United States and Canada were required to
terminate the suspension of concessions pursuan t to Article 22.8 because Directive 2003/74/EC
achieved actual (rather than presumed) complian ce with the DSB's recommendations and rulings. 737
The European Communities explains that it made the alternative claim because "it was confident that,
in any event, ... Directive 2003/74/EC was fu lly consistent with its WTO obligations." 738 Therefore,
the European Communities asserts, the Panel exceeded its terms of reference by "ignoring the
sequencing order of the legal claims made by the European Communities" and by addressing the issue
of actual compliance in order to determine whether the United States and Canada breached
Article 22.8 of the DSU.739
323. We recall that, in support of its claim under Ar ticle 23.1, read together with Articles 22.8
and 3.7, the European Communities maintains that Directive 96/22/EC "was removed" 740 within the
meaning of Article 22.8 after being replaced by Directive 2003/74/EC and that "the mere existence
of an implementing measure adopted in good fait h and its subsequent notification to the DSB"

737Panel Report, US – Continued Suspension , para. 7.156; Panel Report, Canada – Continued
Suspension, para. 7.143.
739Ibid., para. 175.
740Ibid., para. 146.

required the United States and Canada to cease th e application of the suspension of concessions. 741
The European Communities adds that the continuation of the suspension of concessions by the United
States and Canada and their failure to initiate Artic le 21.5 proceedings necessarily implies that they
have made a unilateral determination on the inc onsistency of the implementing measure with the
DSB's recommendations and rulings, "in breach of Article 23.1 read together with Articles 22.8
and 3.7 of the DSU". 742 Therefore, the European Communitie s' assertion that the United States and
Canada breached Article 23.1 in making "a unilate ral determination" is premised on their alleged
failure to terminate the suspension of concessions pursuant to Article 22.8 after the removal of
Directive 96/22/EC, as well as their alleged failure to initiate Article 21.5 proceedings.
324. As we concluded in the previous sections, the inconsistent measure will not be considered
removed within the meaning of Article 22.8 unless substantive compliance is achieved. Therefore,
whether Directive 2003/74/EC brings the European Communities into compliance with the DSB's
recommendations and rulings in EC – Hormones was an issue the Panel had to resolve in order to
determine whether the United States and Canada were required to terminate the suspension of
concessions pursuant to Article 22.8 and whethe r failing to do so constituted a violation of
Article 23.1, read together with Articles 22.8, and 3.7 of the DSU. Before the Panel, the European
Communities maintained that it did not have to demonstrate actual compliance with the DSB's
recommendations and rulings because it should benef it from a presumption of good faith compliance
with respect to Directive 2003/74EC. 743 We concluded, however, that a presumption that the
European Communities acted in good faith when ad opting Directive 2003/74/EC is insufficient for
establishing removal, within the meaning of Article 22.8, of the measure found to be inconsistent in
EC – Hormones.
325. On appeal, the European Communities emphasizes that Directive 96/22/EC was replaced by
Directive 2003/74/EC and thus the in consistent measure has been rem oved. In the previous sections,
we rejected the European Communities' formalistic understanding of the phrase "the measure found to
be inconsistent has been removed" according to which the repeal of the original measure and its
replacement with a new measure would require cessati on of suspension, regardless of the content of
the new measure. Therefore, the distinction dr awn by the European Communities between its second
set of main claims and its alternative claim is, in our view, based on an incorrect interpretation of
Article 22.8. The fact that the European Commun ities described the question of actual compliance of
Directive 2003/74/EC as an alternative claim did not preclude the Panel from evaluating whether

741European Communities' appellant's submission, para. 101. (original emphasis)
742Ibid., para. 101.
743Panel Report, US – Continued Suspension , para. 7.286; Panel Report, Canada – Continued
Suspension, para. 7.302.

there is substantive compliance, if doing so was ne cessary to adjudicate the second main claim of the
European Communities under Articles 23.1, 22.8, and 3.7. On the contrary, the Panel would have
failed to correctly interpret and apply Article 22.8 if it had followed the approach of the European
Communities and had refrained from addressing the issue of whether the repeal of Directive 96/22/EC
and its replacement by Directive 2003/74/EC resulted in substantive compliance.
326. In EC – Hormones, the European Communities' import ban on meat from cattle treated with
oestradiol-17β, progesterone, testosterone, trenbolone acet ate, zeranol, or MGA was found to be
inconsistent with Article 5.1 of the SPS Agreement because it was not based on a proper risk
assessment.
744 To implement the DSB's recommendations and rulings, the European Communities
adopted Directive 2003/74/EC, which repealed Dire ctive 96/22/EC. Directive 2003/74/EC applies a
ban on the importation of meat from cattle treated with oestradiol-17 β for growth-promotion
purposes, while the importation of meat from cattle treated with the other five hormones is
provisionally forbidden. According to the Eur opean Communities, Directive 2003/74/EC is based on
a comprehensive risk assessment that "sufficiently warrants" 745 the permanent import prohibition
regarding oestradiol-17 β and is therefore consistent with Article 5.1 of the SPS Agreement . The
European Communities also contends that the risk assessment provides the "available pertinent
information" on the basis of which the provisional prohibition regarding the other five hormones has
been enacted. Thus, in the European Communities' view, the provisional import ban is consistent
with Article 5.7 of the SPS Agreement, which allows Members to adopt provisional SPS measures on
the basis of available pertinent information in cases where "relevant scientific evidence is
insufficient". On this basis, the European Communities argues th at it has implemented the DSB's
recommendations and rulings in EC – Hormones.746
327. The Panel addressed the consistency w ith Articles 5.1 and 5.7 of the SPS Agreement of the
import ban imposed by Directive 2003/74/EC.747 We have found that the European Communities was
required to bring about substantive compliance fo r the United States and Canada to be under an
obligation to terminate the suspension of concessions pursuant to Article 22.8 of the DSU. The DSB's

745European Communities' first written submission to the Panel, para. 17 (quoting Appellate Body
746Ibid., para. 17.
747We note that the Panel reviewed, and rejected, th e United States' claim that Directive 2003/74/EC
was inconsistent with Article 5.2 of the SPS Agreement . (Panel Report, US – Continued Suspension ,
para. 7.573) Moreover, both the United States and Canada claimed before the Panel that Directive 2003/74/EC
was inconsistent with Article 3.3 of the SPS Agreement. The Panel found it unnecessary to examine the claims
under Article 3.3, having already concluded that Directive 2003/74/EC was not consistent with Articles 5.1
and 5.7 of the SPS Agreement. (Ibid., para. 7.846; Panel Report, Canada – Continued Suspension, para. 7.831)
The Panel's findings with respect to Articles 5.2 and 3.3 of the SPS Agreement were not appealed. We therefore
find it unnecessary to examine whether these two provisions were properly before the Panel.

recommendations and rulings from EC – Hormones included a finding that the import ban on meat
from cattle treated with oestradiol-17 β was inconsistent with Article 5.1 of the SPS Agreement
because it was not based on a proper risk assessment . Thus, in order to determine whether the
European Communities had complied with the DSB' s recommendations and rulings, the Panel had to
examine whether the European Communities had brought its import ban relating to oestradiol-17 β
into conformity with Article 5.1 of the SPS Agreement by basing the import ban in
Directive 2003/74/EC relating to the same substance on a proper risk assessment.
328. We face a somewhat different situati on in relation to Article 5.7 of the SPS Agreement. The
European Communities did not invoke that provision in EC – Hormones to justify its import ban on
meat from cattle treated with the other five hormon es. Thus, the DSB's recommendations and rulings
in EC – Hormones did not include findings under Article 5.7 of the SPS Agreement. Instead, the
import ban relating to the other five hormones was found to be inconsistent with Article 5.1 because it
was not based on a proper risk assessment. This raises the question as to whether the European
Communities' changed justification precluded the Pa nel from examining its consistency with the SPS
Agreement, and particularly with Article 5.7, a pr ovision that was not part of the DSB's
recommendations and rulings in EC – Hormones . In our view, the Panel was not precluded from
assessing the consistency of Directive 2003/74/EC w ith Article 5.7 for the following reasons. The
definitive import ban that was the subject of EC – Hormones and found to be inconsistent with
Article 5.1 has been replaced, under Directive 2003/ 74/EC, by a provisional ban relating to the five
other hormones. The import ban applies to the same products: meat from cattle treated with
progesterone, testosterone, trenbolone acetate, zeranol, and MGA. The European Communities
replaced the original definitive ban with a provisi onal ban and invoked Article 5.7 as an alternative
justification to Article 5.1. The European Communities has characterized the import ban as a
provisional one and has sought to justify it under Article 5.7 of the SPS Agreement:
The new Directive provides that the use for animal growth promotion
of one of the six hormones in dispute is permanently prohibited while
the use of the other five is provisiona lly forbidden. It is based on a
comprehensive risk assessment and, th us, is fully compliant with the
DSB recommendations and rulings. In particular, as stipulated by the
Appellate Body, the results of the risk assessment "sufficiently
warrant" the definite import proh ibition regarding one of the
hormones (Article 5.1 of the SPS Agreement ), and provide the
"available pertinent information" on the basis of which the
provisional prohibition regarding the other five hormones has been
enacted (Article 5.7 of the SPS Agreement). Consequently, through
Directive 2003/74/EC the European Communities has implemented

the rulings and recommendations in the Hormones case.
748 (footnote
omitted)
Article 22.8 demands substantive compliance w ith the DSB's recommendations and rulings. A
change in justification, by itself, cannot be said to achieve substantive comp liance. Compliance with
the DSB's recommendations and rulings concerning Article 5.1 and the definitive ban on the five
hormones cannot be established without reviewing the alternative justification for the provisional ban
under Article 5.7. If the new justification for the ban is not consistent with the SPS Agreement ,
substantive compliance has not been achieved.
329. We recall that the Appellate Body has stated th at, "pursuant to Article 7 of the DSU, the
panel's terms of reference are governed by th e request for the establishment of a panel." 749 W e
recognize that the European Communities' requests for the establishment of a panel do not list
Articles 5.1 and 5.7.750 Also, we are mindful that a panel requ est submitted by an original respondent
in the post-suspension stage is different from a pa nel request in original and compliance proceedings
in the pre-suspension stage. In the requests for establishment of a panel, the European Communities
asserts that it has brought itself into compliance with the DSB's recommendations and rulings which
included a violation of Article 5.1. It gives th e following reason why the suspensions of concessions
could no longer be justified:
In the same communication [in which Directive 2003/74/EC was
notified to the DSB], the European Communities explained that it
considers itself to have fully im plemented the recommendations and
rulings of the DSB in the EC – Hormones dispute and that, as a
consequence, it considers [the United States' and Canada's]
suspension of concessions vis-à-vi s the European Communities to be
no longer justified.
751 (footnote omitted)
330. Directive 2003/74/EC specifies that the original definitive import ban that had been found to
be inconsistent with the covered agreements was replaced by a permanent ban in respect of
oestradiol-17β and a provisional ban in relation to the ot her five hormones. Such a provisional ban
implicates Article 5.7 as explained above. More over, the requests for establishment of a panel
acknowledge that the United States and Canada did not consider that Directive 2003/74/EC complied
with the SPS Agreement:
The [United States and Canada] disagreed and denied that the new
Directive was based on science and that it implemented the DSB's
recommendations and rulings. Th e [United States and Canada]
formally stated in the DSB that [t hey] considered the new Directive

748European Communities' first written submission to the Panel, para. 17.
749Appellate Body Report, US – Carbon Steel, para. 124.
750WT/DS320/6; WT/DS321/6.
751Ibid.

to be inconsistent with the Eur opean Communities obligations under
the SPS Agreement and that [they] would continue to impose
retaliatory duties on certain products from the European
Communities.
752 (footnotes omitted)
331. Finally, the European Communities claims in its request that the United States' and Canada's
conduct is inconsistent with Article 22.8 of the DSU. It is evident from the panel requests that the
consistency of the United States' and Canada's continued suspension with Article 22.8 was linked to
the European Communities' implementation of the DSB's recommendations and rulings in EC –
Hormones. We fail to see how the claims explicitly lis ted in the panel requests by the European
Communities could be resolved in isolation from the question of whether Directive 2003/74/EC has
brought the European Communities into compliance with these DSB's recommendations and rulings.
332. Taken together, these elements support th e conclusion that the consistency of
Directive 2003/74/EC with Articles 5.1 and 5.7 of the SPS Agreement was part of the matter to be
examined by the Panel. In these circumstances, we reject the European Communities' claim that the
Panel exceeded its terms of reference by addr essing the consistency of Directive 2003/74/EC with
Articles 5.1 and 5.7 of the SPS Agreement. We uphold the Panel's finding that "it has jurisdiction to
consider the compatibility of the [European Communities'] implementing measure with the SPS
Agreement as part of its review of the claim raised by the European Comm unities with respect to
Article 22.8 of the DSU."753
E. Procedural Avenues for Resolving Disagreem ents as to Whether the Inconsistent
Measure Has Been Removed under Article 22.8 of the DSU
1. What Is the Appropriate Procedural Av enue to Resolve a Disagreement as to
Whether the Inconsistent Measure Has Been Removed?
333. The European Communities argues that, wher e a WTO Member continues to suspend
concessions because it considers that the implementing measure does not achieve compliance with the
DSB's recommendations and rulings or is otherwise inconsistent w ith the covered agreements, the
Member has an obligation to initiate Article 21.5 proceedings.
334. Article 21.5 provides that:
Where there is disagreement as to th e existence or consistency with a
covered agreement of measures taken to comply with the
recommendations and rulings such dispute shall be decided through
recourse to these dispute settlement procedures, including wherever

752WT/DS320/6; WT/DS321/6.
753Panel Report, US – Continued Suspension , para. 7.379; Panel Report, Canada – Continued
Suspension, para. 7.376.

possible resort to the original panel. The panel shall circulate its
report within 90 days after the date of referral of the matter to it.
When the panel considers that it ca nnot provide its report within the
time frame, it shall inform the DSB in writing of the reasons for the
delay together with an estimate of the period within which it will
submit its report.
335. The European Communities reads the words "sha ll be decided" and "including" as indicating
an obligation to have recourse to an Article 21.5 pa nel in the sense that it constitutes a mandatory step
in the process of adjudicating disagreements over th e existence or consistency of measures taken to
comply, even though additional procedural steps may also be available under the DSU. However, the
United States and Canada read the phrase "shall be decided through recourse to these dispute
settlement procedures" to mean that recourse coul d encompass any of the procedures available under
the DSU, and not just an Article 21.5 panel procedure. The phrase "including wherever possible ...
the original panel" would then be read as one of several options. This seems to be the view taken by
the Panel when it read the phrase to mean resort "t o the panelists that reviewed the original case,
rather than to other individuals."
754 The Panel further found that several procedural means are
available to the European Communities for obtaining the termination of the suspension of
concessions, including good offices and consultations, arbitration under Article 25 of the DSU, panel
proceedings under Article 21.5 of the DSU, and ne w panel proceedings involving a challenge against
the continued suspension of concessions.755
336. The opening clause of Article 21.5 specifies the typ es of disputes that fall within the scope of
this provision, that is, those involving a disagreem ent as to the existence or consistency with a
covered agreement of measures taken to comply wi th the recommendations and rulings of the DSB.
The word "shall" in Article 21.5 indicates that such disagreements must be resolved through recourse
to "these dispute settlement procedures". Read t ogether with the second sentence of Article 21.5,
"these dispute settlement procedures" do not refer generally to all proceedings under the DSU, but
specifically to the panel proceedings envisaged in Article 21.5, in which the original panelists are
preferred for the composition of the panel and in which the time frame of the proceedings is
shortened. In other words, Article 21.5 dictates that panel proceedings pursuant to this provision are
the procedures that must be followed for adjudica ting the cause of action as framed in its opening
clause.
337. As we see it, at the core of this dispute is a disagreement as to whether Directive 2003/74/EC,
the measure taken by the European Communities to comply with the DSB's recommendations and

754Panel Report, US – Continued Suspension , para. 7.351; Panel Report, Canada – Continued
Suspension, para. 7.349.
755Panel Report, US – Continued Suspension , para. 7.350; Panel Report, Canada – Continued
Suspension, para. 7.348.

rulings in EC – Hormones , achieves substantive compliance. Before the Panel, the European
Communities claimed that it had removed Direc tive 96/22/EC, which had been found to be
inconsistent in EC – Hormones , and that the United States and Canada breached Article 23.1, read
together with Articles 22.8 and 3.7, by failin g to terminate the suspension of concessions. 756 T h e
United States and Canada disagreed that they were in breach of Article 22.8 and argued that it has not
been demonstrated that the Eu ropean Communities has in fact removed its WTO-inconsistent
measure.757 Because the phrase "until such time as the m easure found to be inconsistent with a
covered agreement has been removed" in Article 22.8 must be properly interpreted as referring to
substantive compliance, the disagreement as to wh ether such compliance has been achieved is the
central issue that must be resolved in order to assess the legality of the continued suspension.
338. Article 21.5 provides for specific procedures for adjudicating a disagreement as to the
consistency with the covered agr eements of measures taken by a Member to implement the DSB's
recommendations and rulings. Thus, panel proceedi ngs under Article 21.5 is the proper procedure for
resolving the disagreement as to whether Directiv e 2003/74/EC has achieved substantive compliance
and whether, consequently, the resolutive condition in Article 22.8 that requires the termination of the
suspension of concessions has been met. Indeed, as the Panel pointed out, "the option naturally
coming to mind when it comes to reviewing complia nce is the procedure provided under Article 21.5
of the DSU." 758 The Panel also recognized that it "perfo rmed functions similar to that of an
Article 21.5 panel" by addressing the consis tency with the covered agreements of
Directive 2003/74/EC.759
339. The Panel nonetheless found that Article 21.5 pa nel proceedings were not "the only avenue
available to address a claim of compliance by a Member alleging to have complied with
recommendations and rulings of the DSB".
760 Rather, as described above, the Panel found that good
offices, consultations, and arbitration under Article 25 of the DSU were other procedures available to
the European Communities for obtaining the termination of the suspension of concessions.
340. Certainly, parties to a dispute are not precluded from pursuing consensual or alternative
means of dispute settlement foreseen in the DSU. Article 3.7 of the DSU provides that "[a] solution

756Panel Report, US – Continued Suspension , para. 7.252; Panel Report, Canada – Continued
Suspension, para. 7.245.
757Panel Report, US – Continued Suspension , para. 7.264; Panel Report, Canada – Continued
Suspension, para. 7.261.
758Panel Report, US – Continued Suspension , para. 7.351; Panel Report, Canada – Continued
Suspension, para. 7.349.
759Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.
760Panel Report, US – Continued Suspension , para. 7.355; Panel Report, Canada – Continued
Suspension, para. 7.353.

mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to
be preferred." To reach a mutually acceptable solu tion, Members can engage in consultations or
resort to mediation and good offices. Moreover, Article 25 provides for arbitration as an alternative to
panel proceedings for dispute resolution. Consulta tions, mediation, good offices, and arbitration are,
however, alternatives to compulsory adjudication a nd require the consent of the parties. In the
absence of such consent, they cannot lead to a binding decision. Thus, it is important to distinguish
between these consensual means of dispute resolution, which are al ways at the Members' disposal,
and adjudication through panel pr oceedings, which are compulsory. It is in this sense that
Article 21.5 is cast in obligatory language. In th is dispute, it is clear that a mutually acceptable
solution was not reached and the European Commun ities decided to resort to adjudication. In
addition, the parties to this dispute were unable to agree on an arbitration procedure pursuant to
Article 25 of the DSU.
761 The issue before us, therefore, is which procedure must be followed when
parties do not avail themselves of the consensual a nd alternative means of dispute resolution provided
in the DSU, and the dispute must proceed to the adjudication phase.
341. Another possibility the Panel identified are ne w panel proceedings involving a challenge
against the legality of the con tinued suspension of concessions, su ch as the European Communities'
initiation of the current proceedings. 762 As discussed, the legality of the continued suspension of
concessions in this dispute hinges on whether Dir ective 2003/74/EC achieves substantive compliance,
an issue that should be properly adjudicated in Article 21.5 proceedings. The Panel itself recognized
that it had to "perform functions simila r to that of an Article 21.5 panel". 763 By contrast, the cause of
action in new panel proceedings normally does not i nvolve the issue of whether a measure taken to
comply with the DSB's recommendations and rulings is consistent with the c overed agreements. The
European Communities initiated the current proceedi ngs, in part, on account of its belief that an
original respondent is precluded from initiating Article 21.5 panel proceedings. We address this issue
in subsection 2 below.
342. Furthermore, a disagreement under Article 22.8 concerning the removal of "a measure found
to be inconsistent" in an original proceeding does no t exist in the abstract but, rather, occurs in the
context of a pre-existing dispute that gave rise to the DSB's recommendations and rulings. Recourse

761The European Communities alleges that it proposed to the United States to submit the dispute to
arbitration under Article 25 of the DSU, but the Unite d States refused. (European Communities' appellant's
submission, para. 62)
762Panel Report, US – Continued Suspension , para. 7.350; Panel Report, Canada – Continued
Suspension, para. 7.348.
763Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.

to Article 21.5 proceedings keeps the successive pro ceedings relating to the same dispute within "a
continuum of events"764, and is conducive to reaching a final resolution of the dispute.
343. Finally, in contrast to new panel proceedings, recourse to Article 21.5 is a more efficient use
of the dispute settlement system. As the Appellate Body observed:
First, the composition of an Article 21.5 panel is, in principle, already
determined—wherever possible, it is the original panel. These
individuals will be familiar with th e contours of the dispute, and the
experience gained from the original proceedings should enable them
to deal more efficiently with matters arising in an Article 21.5
proceeding "against the background of the original proceedings".
Secondly, the time-frames are shorte r—an Article 21.5 panel has, in
principle, 90 days in which to issue its report, as compared to the six
to nine months afforded original panels.
765
344. As discussed, underlying this dispute concerning the continued suspension of concessions lies
a disagreement over the consistency with the cove red agreements of Directive 2003/74/EC, a measure
taken by the European Communities to comply with the DSB's recommendations and rulings in EC –
Hormones. The individuals who served in the panel in EC – Hormones were familiar with the
background of the dispute and the inconsistencies wi th the covered agreements they had found with
respect to Directive 96/22/EC. Recourse to Article 21.5 panel proceedings would allow these
individuals to examine whether the inconsistencies found in EC – Hormones have been rectified by
Directive 2003/74/EC. Such proceedings would be nefit from their knowledge and expertise gained
from serving as panelists in EC – Hormones, and would be adjudicated within a shorter time frame
than regular panel proceedings. Recourse to Artic le 21.5 proceedings under such circumstances is
therefore also consistent with the objective of the dispute settlement system of achieving prompt
settlement of disputes.
345. In sum, we consider that recourse to Ar ticle 21.5 panel proceedings is the proper course of
action within the procedural structure of the DSU in cases where, as in this dispute, a Member subject
to the suspension of concessions has taken an im plementing measure and a disagreement arises as to
whether "the measure found to be inconsistent w ith a covered agreement has been removed" within
the meaning of Article 22.8. Therefore, we share the European Communities' view that Article 21.5
panel proceedings are the procedures to be follo wed where there is disagreement as to whether
Directive 2003/74/EC has achieved substantive comp liance. We turn now to examine which party
may initiate the Article 21.5 panel proceedings.

764Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US), para. 121.
765Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada), para. 71.

2. Is the European Communities Precluded from Initiating Article 21.5 Panel
Proceedings Regarding Whether Directive 2003/74/EC Has Brought It into
Compliance?
346. The European Communities argues that the Pa nel erred in finding that proceedings under
Article 21.5 could have been initiated by the Eur opean Communities as the original responding party
in EC – Hormones .766 According to the European Communiti es, "it is inherent in the wording,
context and object and purpose of the provision that it is the obligation of the complaining party to
have recourse to Article 21.5."767
347. A "disagreement" as to the consistency with the WTO agreements of a measure taken to
comply arises from the existence of conflicting views: the original complainant's view that such a
measure is inconsistent with the WTO agreements or brings about only partial compliance, and the
original respondent's view that a measure is cons istent with the WTO agreements and brings about
full compliance with the DSB's recommendations a nd rulings. Article 21.5 does not indicate which
party may initiate proceedings under this provision. Rather, the language of the provision is neutral
on this matter, and it is open to eith er party to refer the matter to an Article 21.5 panel to resolve this
disagreement. The text of Article 21.5, therefore, leaves open the possibility that either party to the
original dispute may initiate the proceedings. Thus, contrary to th e European Communities'
argument, the text of Article 21.5 does not preclude an original respondent from initiating proceedings
under that provision to obtain confirmation of th e consistency with the WTO agreements of its
implementing measure.
348. Moreover, we recall that the suspension of concessions is an abnormal state of affairs because
it is the last resort available under the DSU wh en compliance is not achieved. Pursuant to
Article 22.8, this abnormal state of affairs must be "temporary" and must be brought back to
normality as soon as possible. Consequently, both the suspending Member and the implementing
Member share the responsibility to ensure that the suspension of concessions is not applied
indefinitely. Thus, initiation of Article 21.5 proceed ings by either Member, as soon as possible, to
examine the consistency with the covered agreemen ts of Directive 2003/74/EC would contribute to a
prompt resolution of the disagreement as to whethe r the inconsistent measure has been removed and
whether the suspension of concessions must be terminated pursuant to Article 22.8.
349. The European Communities advances several reasons why initiation of Article 21.5 panel
proceedings by the original respondent is not permissi ble, including: (i) the adversarial nature of the

766Panel Report, US – Continued Suspension , para. 7.355; Panel Report, Canada – Continued
Suspension, para. 7.353.

WTO dispute settlement system and its inapplicab ility to a Member's request for an "abstract
confirmation" of the consistency of a measure; (ii) the difficulty in defining the Article 21.5 panel's
terms of reference; (iii) the possibility that the orig inal complainants would refuse to participate; and
(iv) the lack of recommendations and rulings di rectly addressing the illegality of the continued
suspension of concessions should the measure taken to comply be found to be consistent with the
WTO agreements. We address below each of the objections raised by the European Communities.
(a) The "Adversarial" Nature of the WTO Dispute Settlement System
350. According to the European Co mmunities, an implementing Member cannot have recourse to
Article 21.5 of the DSU to confirm the consistenc y with the WTO agreements of its own measures,
because the dispute settlement system is based on a dversarial proceedings and is not applicable to
"requests for an abstract confirmation of the consistency of a measure". 768 The European
Communities adds that its understanding of Article 21 .5 is confirmed by the concept of a "dispute" as
reflected in Article 3.3 of the DSU, which, according the European Communities, "assumes a
situation where one Member challenges the measure of another Member" because the former
considers that its rights are being affected.
769 The European Communities al so refers to the text of
Article XXIII:1 of the GATT 1994 which contains language similar to that in Article 3.3 of the DSU.
351. Article 3.3 provides that:
The prompt settlement of situati ons in which a Member considers
that any benefits accruing to it directly or indirectly under the
covered agreements are being impaired by measures taken by another
Member is essential to the effective functioning of the WTO and the
maintenance of a proper balance between the rights and obligations
of Members.
352. It is evident that the implementing Member woul d not normally consider its benefits to have
been impaired by the measure it has itself take n to comply with the DSB's recommendations and
rulings. In the post-suspension stage of a disput e, however, an original respondent would initiate
Article 21.5 panel proceedings for a specific reason: to obtain a multilateral confirmation that its
implementing measure has achieved substantive complia nce, so as to render the continued application
of the suspension of concessions unlawful pursuant to Ar ticle 22.8. The situation is thus one of those
envisaged under Article 3.3, in that the original respondent considers that its benefits under the
covered agreement are being impaired by the susp ension of concessions maintained by the original
complainant, which is denied by the suspending Member. The task of an Article 21.5 panel,

768European Communities' appellant's submission, para. 78. (emphasis omitted)
769Ibid., para. 85.

established at the request of the original res pondent, is to determine whether the implementing
measure brings about substantive compliance. There is nothing "abstract" about such a determination;
it results in an adjudication with real consequences, including, in particular, whether the application of
the suspension of concessions may continue.
(b) The Terms of Reference of an Ar ticle 21.5 Panel Requested by the
Original Respondent
353. The European Communities submits that "[i] t would be manifestly impossible for the
European Communities to fulfil th e very basic requirements of Article 6 for the purposes of seeking
confirmation of the consistency with the WTO agreements of its implementing measure since it would
not be in a position to identify the provisions of the SPS Agreement that are violated."
770 We agree
that the original respondent that has taken a measure to comply cannot be expected to speculate as to
the violations that could possibly be raised against its measure by other Members, and this is not what
the original respondent is expected to do if it in itiates Article 21.5 panel proceedings. Rather, the
original respondent will be able to identify in its panel request the measure it has taken to comply and
the specific inconsistencies found in the DSB's recommendations and rulings in the original
proceedings, and claim before the Article 21.5 panel that it has complied with the DSB's
recommendations and rulings by rectifying those in consistencies. It would then be for the
Article 21.5 panel to determine if the measure taken to comply does, in fact, rectify the
inconsistencies identified in the DSB's recommendations and rulings.
354. The original complainant may respond to the a llegations of compliance made by the original
respondent. If, however, the original complain ant considers that the implementing measure is
inconsistent with provisions of the WTO agreements not covered in the request for the establishment
of a panel by the implementing Member, it may file its own request for the establishment of a panel
under Article 21.5 identifying those provisions that it considers should be examined by the
Article 21.5 panel. It would be for the Article 21.5 panel to determine if the implementing measure
violates the WTO agreements in ways different from the original measure or whether certain claims
fall outside the scope of Article 21.5 proceedings.
771 The original complainant would be expected to

771As the Appellate Body has explained, a complainant who had failed to make out a prima facie case
in the original proceedings regarding an element of the measure that remains unchanged since the original
proceedings may not re-litigate the same claim with respect to the unchanged element of the measure in the
Article 21.5 proceedings. (Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , paras. 87 and 96)
Similarly, a complainant may not reasse rt the same claim against an uncha nged aspect of the measure that was
found to be WTO-consistent in the original proceedings. (Appellate Body Report, US – Shrimp (Article 21.5 –
Malaysia), para. 96) Moreover, a complaining Member ordinarily would not be allowed to raise claims in the
Article 21.5 proceedings that it coul d have pursued in the original proc eedings, but did not. (Appellate Body
Report, US – Upland Cotton (Article 21.5 – Brazil), para. 211)

do so as soon as possible after adoption of an implementation measure or after the filing of the
original respondent's panel request, so that both Article 21.5 panel requests may be referred to the
original panel wherever possible, allowing review of all the issues relating to substantive compliance
in the same Article 21.5 proceedings.772
355. Such an approach is consistent with the requirements of Article 22.8 of the DSU. As noted
above, Article 22.8 provides certain resolutive cond itions which, if met, render the suspension of
concessions without legal basis. The suspending Member and the implementing Member share the
responsibility to ensure that the suspension of c oncessions is applied only insofar as none of the
conditions laid down in Article 22.8 are met. Thus , both Members have an obligation to engage in a
cooperative manner in WTO dispute settlement to establish whether the suspension of concessions
can continue or must be discontinued pursuant to Article 22.8. Irrespective of who initiates the
Article 21.5 panel proceedings, a finding of an Arti cle 21.5 panel that the implementing Member has
removed the inconsistent measure means that one of the resolutive conditions in Article 22.8 is met.
This finding, once adopted by the DSB–the same body that authorized the suspension of concessions–
signifies that the inconsistency against which the suspension of concessions was authorized has now
been remedied. Thus, by operation of law ( ipso jure), the suspension of concessions may no longer
be applied.
(c) The Original Complainants' Incentive to Participate in Article 21.5
Panel Proceedings Initiated by the Original Respondent
356. The European Communities further submits that it "appears that the United States and Canada
as 'defending parties' would not be obliged to participate"773 in Article 21.5 panel proceedings initiated
by the European Communities. In support of this argument, the European Communities referred to
the fact that in EC – Bananas III (Article 21.5 – EC) , one of the original complainants (the United
States) refused to participate in the Article 21.5 pa nel proceedings that the original respondent (the
European Communities) had initiated. The Europ ean Communities therefore takes issue with the
Panel's reference to that dispute in finding that Article 21.5 panel pr oceedings may be initiated by the
original respondent.
357. We note that the panel in EC – Bananas III (Article 21.5 – EC) did not find that it was
precluded from examining the European Communiti es' claims because the European Communities

772Even if delays between the original respondent's and original complainant's panel requests do not
allow for harmonization pursuant to Article 9 of the accelerated working schedules under Article 21.5, the
matter raised by the original respondent and the original complainant would nevertheless, wherever possible, be
referred to the same individuals that served on the original panel.

had been the respondent in the original proceedings.
774 Moreover, the exceptional circumstances in
EC – Bananas III (Article 21.5 – EC) , including the particular request made by the European
Communities in those proceedings, could explain th e lack of participation of certain original
complainants and that panel's decision not to ma ke a ruling on the consistency of the European
Communities' first implementing measure. In EC – Bananas III (Article 21.5 – EC) , an Article 21.5
panel was established at the requ est of one of the original complainants, Ecuador, in which the
European Communities' first implementing measure was found to be inconsistent with the WTO
agreements. There was also an ongoing arbitrati on pursuant to Article 22.6 of the DSU between the
European Communities and the United States. 775 That dispute, on its unusual facts, does not lead to
the conclusion that an Article 21.5 panel would be precluded from making an objective assessment of
the matter referred to it by the original respondent.
358. We recognize that it is theoretically possible for the original complainant to refuse to
participate in Article 21.5 proceedings initiated by the original respondent.776 Yet, this is not a feature
that may only occur in Article 21.5 proceedings initia ted by the original respondent, because the DSU
does not provide the means to compel any party to participate in any dispute settlement proceedings.
A defending party who refuses to participate in dispute settlement proceedings will lose the
opportunity to defend its position and will risk a findi ng in favour of the complaining party that has
established a prima facie case. 777 Similarly, in Article 21.5 panel proceedings initiated by the
original respondent, the original complainant who refuses to participate forgoes the opportunity to
explain to the Article 21.5 panel why the measure take n to comply fails to rectify the inconsistencies
found in the original proceeding and, conseque ntly, why the suspension of concessions remains
justified under Article 22.8 despite the measure taken to comply. Absent any rebuttal by the original
complainant, the Article 21.5 panel will ma ke its determination on the basis of a prima facie case
presented by the original respondent that its im plementing measure has brought it into compliance
with the DSB's recommendations and rulings. Th erefore, where the original complainant has
suspended concessions according to the DSB's author ization, the original complainant would have a
strong incentive to participate lest the authoriza tion to suspend concessions lapses as a result of the
adoption by the DSB of the Article 21.5 panel's fi nding that the original respondent has brought itself
into compliance.
359. Like any other panel, an Article 21.5 panel est ablished in the post-suspension stage, at the
request of the original respondent, would be bound to make an objective assessment of the matter.

774Panel Report, EC – Bananas III (Article 21.5 – EC), para. 4.18.
775We do not need to express a view here on whether the consistency of the implementation measure
could or should have been addressed by the arbitrators acting pursuant to Article 22.6 of the DSU.
777For the appellate stage, see Rule 29 of the Working Procedures.

The ultimate issue before such a pa nel is whether the measure found to be inconsistent with a covered
agreement has been removed. We have interprete d "removed" to mean substantive compliance. The
question is which party bears the burden of proof in respect of the issues of substantive compliance.
Is the burden to be allocated according to a mechan istic rule that it is for the party initiating the
proceedings to prove substantive compliance or is it the case that the burden of proof is allocated
according to different principles? Much of the reluctance of the parties to secure a definitive
determination in respect of Article 22.8 is the a pprehension that, upon initiation, a party will attract
the full burden of proof.
360. In our view, the allocation of the burden of proof , in the context of Article 22.8, should not be
determined simply on the basis of a mechanistic rule that the party who initiates the proceedings bears
the burden of proof. As we have indicated, in case of a disagreement, both parties are under an
obligation to secure a definitive multilateral dete rmination as to whether the suspension of
concessions must be terminated. The burden of proo f does not attach to a party simply because such
party discharges this obligation. To hold otherw ise would create a disincentive to act in a manner
which we consider to be obligatory and desirable.
361. The allocation of the burden of proof in the c ontext of claims arising under Article 22.8 is a
function of the following considerations. First, what is the nature of the cause of action that is framed
under Article 22.8. Second, the practical question as to which party may be expected to be in a
position to prove a particular issue. Third, cons ideration must be given to the requirements of
procedural fairness.
362. Since the suspension of concessions is a remedy of last resort imposed after an elaborate
multilateral dispute settlement process, in our view, it is appropriate that the Member whose measure
has brought about the suspension of concessions shoul d make some showing that it has removed the
measure found to be inconsistent by the DSB in the original proceedings, so that normality can be
lawfully restored. This requires that the original respondent will have an onus to show that its
implementing measure has cured the defects identif ied in the DSB's recommendations and rulings.
The quantum of proof entailed by this is a clear description of its implementing measure, and an
adequate explanation regarding how this measure rectifies the inc onsistencies found in the original
proceedings, so as to place the Article 21.5 panel in a position to make an objective assessment of the
matter and, in the absence of rebuttal, to rule in favour of the original respondent.
363. If the original respondent initiates Article 21. 5 proceedings to determine that the first
resolutive condition in Article 22.8 has been fulfille d, and, consequently, that the suspension of
concessions must end, and the original complainant fails to appear and answer the case, what would

the original respondent need to establish to satisfy a panel that the resolutive condition has been
fulfilled? The original respondent, in this situati on, would be required to place evidence before the
Article 21.5 panel sufficient to permit the panel, in carrying out its duty, to make an objective
assessment of the matter. The quantum of evidence necessary for this purpose is the burden of proof,
described above, that attaches to the original respondent.
364. In respect of all other issues, the burden of pr oof rests upon the original complainant. Such
issues may include a claim that the implementing measu re is otherwise inconsis tent with the covered
agreements or that the implementing measure re mains wanting for reasons not traversed by the
original respondent in discharging its burden of proof.
365. This allocation of the burden of proof is also c onsistent with the parties' shared responsibility
to ensure that the suspension of c oncessions is "temporary", and that th e normal state of affairs, that
is, conformity with the covered agreements and ab sence of the suspension of concessions, is restored
as quickly as possible.
(d) The Lack of Recommendations and Rulings Regarding the Legality
of the Continued Suspension of Concessions
366. The European Communities further states that , if it had initiated Article 21.5 panel
proceedings in this case, the Article 21.5 panel could not have made r ecommendations addressed to
the United States and Canada to cease the suspensi on of concessions, because an Article 21.5 panel
would only have had jurisdiction to rule on the compliance of the implementing measure.
778
367. A finding that the implementing Member has achieved substantive compliance means that the
first resolutive condition in Article 22.8 has been met. Such a finding, adopted by the DSB as part of
the Article 21.5 panel (and Appellate Body) report(s), would, by operation of law (ipso jure), result in
the termination of the DSB's authorization to susp end concessions. This result obtains irrespective of
whether the Article 21.5 panel was initiated by the origin al respondent or by the original complainant.
It does not depend on which party initiates the Arti cle 21.5 panel proceedings. Rather, the result
depends on whether the Article 21.5 panel confirms that the implementing Member has brought itself
into substantive compliance, thereby triggering the obligation to cease applying the suspension of
concessions, as required by Article 22.8 of the DSU.
368. In sum, we are not persuaded by the Europ ean Communities' argument that an original
respondent in the post-suspension stage of a dis pute would be precluded from initiating Article 21.5
proceedings. Therefore, we find that the Panel did not err in stating that proceedings under

Article 21.5 of the DSU may be initiated not only by the complainant, but also by the respondent in
the original proceedings.
F. Analysis of the Panel's Findings of "Procedural Violations"
369. The United States and Canada allege that the Panel erred in finding that they breached
Articles 23.2(a) and 23.1 of the DSU by continuing the suspension of concessions after the
notification of Directive 2003/74/EC 779, and request the Appellate Body to reverse these findings. In
particular, the United States and Canada assert that th e Panel erred in finding that: (i) through the
maintenance of the suspension of concessions agai nst the European Commun ities, they are seeking
the redress of a violation with respect to Direc tive 2003/74/74/EC; and (ii) they made a unilateral
determination to the effect that a violation has occurred without recourse to dispute settlement under
the DSU, in contravention of Article 23.2(a).
1. The Prohibition on Certain Unilateral Actions – Article 23 of the DSU
370. We begin our analysis with the interpretation of the terms of Article 23 that are relevant to
this dispute. Entitled "Strengthening of the Multilateral System", Article 23 provides that:
1. When Members seek the redress of a violation of obligations or
other nullification or impairment of benefits under the covered
agreements or an impediment to the attainment of any objective of
the covered agreements, they shall have recourse to, and abide by, the
rules and procedures of this Understanding.
2. In such cases, Members shall:
(a) not make a determination to the effect that a violation has
occurred, that benefits have been nullified or impaired or that the
attainment of any objective of the covered agreements has been
impeded, except through recourse to dispute settlement in accordance
with the rules and procedures of this Understanding, and shall make
any such determination consistent with the findings contained in the
panel or Appellate Body report adopted by the DSB or an arbitration
award rendered under this Understanding;
(b) follow the procedures set forth in Article 21 to determine the
reasonable period of time for the Member concerned to implement
the recommendations and rulings; and
(c) follow the procedures set forth in Article 22 to determine the
level of suspension of concessions or other obligations and obtain
DSB authorization in accordance with those procedures before
suspending concessions or other obligations under the covered

779Panel Report, US – Continued Suspension , paras. 7.251 and 7.856; Panel Report, Canada –
Continued Suspension, paras. 7.244 and 7.841.

agreements in response to the failure of the Member concerned to
implement the recommendations and rulings within that reasonable
period of time.
371. As the Appellate Body has explained, Article 23.1 lays down the fundamental obligation of
WTO Members to have recourse to the rules and procedures of the DSU when seeking redress of a
violation of the covered agreements.
780 Article 23 restricts WTO Members' conduct in two respects.
First, Article 23.1 establishes the WTO dispute se ttlement system as the exclusive forum for the
resolution of such disputes and re quires adherence to the rules of the DSU. Secondly, Article 23.2
prohibits certain unilateral action by a WTO Memb er. Thus, a Member cannot unilaterally: (i)
determine that a violation has occurred, benefits have been nullified or impaired, or that the
attainment of any objective of the covered agreements has been impeded; ( ii) determine the duration
of the reasonable period of time for implementation; or (iii) decide to suspend concessions and
determine the level thereof.
372. The phrase "[i]n such cases, Members shall" with which Article 23.2 begins refers back to the
situation described in Article 23.1, namely, when a Member is seeking the redress of, inter alia , a
violation of obligations under th e covered agreements. We shar e the view of the panel in US –
Section 301 Trade Act that the terms "[i]n such cases, Memb ers shall" used in the chapeau of
Article 23.2 make clear that Article 23.2 is "explicitly linked to, and has to be read together with and
subject to, Article 23.1". 781 Therefore, the specific prohibitions of unilateral actions in Article 23.2
must be understood in the context of the overarching provision of Article 23.1. In other words, the
unilateral actions prohibited by Article 23.2 are those taken by a Member with a view to seeking
redress of a violation. Moreover, the phrase "[i]n such cases, Members shall" at the beginning of
Article 23.2 indicates that the specific obligations set forth in its subparagraphs clarify and illustrate
the scope of the general and ongoing obligation in Article 23.1. This does not mean, however, that
the scope of Article 23.1 is exhausted by the situations described in Article 23.2.782
373. Seeking the redress of a violation is of course not by itself prohibited by Article 23.1 of the
DSU. Rather, to be in breach of Article 23.1, a Member must be seeking redress without having
recourse to, or abiding by, the rules of the DSU.

780Appellate Body Report, US – Certain EC Products, para. 111.
781Panel Report, US – Section 301 Trade Act, para. 7.44.
782As the panel in US – Section 301 Trade Act pointed out, the prohibitions mentioned in Article 23.2
are examples of conduct that contradicts the rules and procedures of the DSU which, under the obligation in
Article 23.1 to "abide by the rules and procedures" of the DSU, Members are obligated to follow. These rules
and procedures cover more than those specifically mentioned in Article 23.2 and "[t]here is a great deal more
State conduct which can violate the general obligation in Article 23.1 to have recourse to, and abide by, the rules
and procedures of the DSU than the instances especially singled out in Article 23.2." (Panel Report, US –
Section 301 Trade Act, para. 7.45) (footnote omitted)

374. An initial question that arises in this case is wh ether the continued application of a previously
authorized suspension of concessions can be said to constitute the seeking of redress. On the one
hand, the authorization to suspend concessions can be said to be the result of a previous act of seeking
redress that involved initiating a dispute. On the other hand, the continued application of the
suspension of concessions can be said to reflect a continuous act of seeking redress for a violation
found by the DSB that has not yet been rectified. In any event, the suspension of concessions that has
been duly authorized by the DSB will not constitute a violation of Article 23.1, as long as it is
consistent with other rules of the DSU, including paragraphs 2 through 8 of Article 22, even if the
continued application of the suspension of concessions is regarded as an action or part of a process of
"seeking the redress". This is because, before obtaining the DSB's authorization to suspend
concessions, a Member must initiate a dispute settlement process in which it challenges the
consistency with the covered ag reements of a measure taken by another Member. The Member
initiating the process will only be authorized to su spend concessions when the measure is found by
the panel (and the Appellate Body, if appealed) to be inconsistent with the covered agreements and
the Member taking the measure fails to implement th e panel's (or Appellate Body's) findings within a
reasonable period of time or, if it takes a measure to comply, that measure is found by the panel (and
the Appellate Body) in compliance proceedings not to have brought the Member concerned into
compliance. In other words, the Member will only be able to suspend conc essions pursuant to the
DSB's authorization after having had extensive recourse to, and abided by, the rules and procedures of
the DSU, consistent with the requirements of Article 23.1.
375. This does not mean that Article 23.1 ceases to apply once the suspension of concessions has
been authorized by the DSB. Article 23.2(c) specifically refers to Article 22 of the DSU. Paragraph 8
of this provision states that the suspension of con cessions shall only be app lied until the inconsistent
measure has been removed or one of the other two conditions in Article 22.8 is met. Thus, if the
Member subject to the suspension of concessions ta kes an implementing measure and that measure is
found in WTO dispute settlement proceedings to bri ng this Member into subs tantive compliance, the
suspension of concessions would no longer be consis tent with Article 22.8 of the DSU, and, as a
result, would become a unilateral action prohibited by Articles 23.1 and 23.2. In other words, the
requirements in Article 22.8 and Article 23 apply a nd must be read together in the post-suspension
stage of a dispute. Therefore, Article 23 must be seen as containing an ongoing obligation and
continues to apply even after the suspension of concessions has been duly authorized by the DSB.
376. With this in mind, we turn to examine the i ssues raised by the United States and Canada on
appeal.

2. The Panel's Alleged Examination of Ar ticles 23.2(a) and 23.1 in Isolation
from the Requirements in Article 22.8 of the DSU
377. The United States and Canada submit that th e Panel erred by examining the European
Communities' claims under Articles 23.2(a), 23.1, and 21.5 independently from the question of
whether Article 22.8 required the termination of th e suspension of concessions. The United States
argues that the Panel ignored the fact that none of the conditions requiring the cessation of the
suspension of concessions under Article 22.8 of th e DSU had occurred. Thus, the United States
maintains, the Panel's findings that the suspen sion of concessions by the United States is "without
recourse to the procedures under the DSU" 783 would effectively undermine the DSB's authorization to
suspend concessions, rendering it "meaningless". 784 Canada claims that the "[k]ey to this case is
Article 22.8 of the DSU" 785 which, as lex specialis in the post-suspension phase of a dispute, sets out
the three conditions that must be met in order to have the suspension of concessions terminated, one
of the conditions being actual compliance with the DSB's recommendations and rulings. Canada adds
that "the continuous involvement of the DSB", pursuant to the second sentence of Article 22.8,
"suggests that [the DSB] retains jurisdiction ove r the matter until its recommendations and rulings
have been fully implemented." 786 Thus, in Canada's view, the Pa nel should have first considered
whether Canada was required to discontinue the suspension of concessions pursuant to Article 22.8.787
378. We note that the suspension of concessions mainta ined by the United States and Canada were
duly authorized by the DSB subsequent to its adoption of the recommendations and rulings in EC –
Hormones and an arbitration award resulting from pro ceedings under Article 22.6 regarding the level
of the suspension of concessions. 788 As discussed above, where th e suspension of concessions has
been duly authorized by the DSB and is applied consistently with the rules of the DSU, including
Article 22.8, it does not constitute a violation of Article 23.1, because it is not imposed without
recourse to or without abiding by the DSU. The requirements in Article 22 and those in Article 23
must be read together, in the post-suspension stage of the dispute, to determine the legality of the
continued suspension when an implementing measure h as been taken. Thus, we share the view of the
United States and Canada that, in order to determine whether they acted inconsistently with Article 23
by continuing the suspension of concessions subsequent to the notification of Directive 2003/74/EC,
the Panel had to first determine whether the suspen sion of concessions was being applied consistently
with Article 22.8 of the DSU.

783United States' other appellant's submission, para. 29.
784Ibid., para. 30.
785Canada's other appellant's submission, para. 35.
786Ibid., para. 36.
787Ibid., paras. 60 and 61.
 788Article 22.4 provides that "[t]he level of the suspension of concessions or other obligations
authorized by the DSB shall be equivalent to the level of the nullification or impairment."

379. The European Communities asserts that the United States and Canada "entirely ignore" 789 the
fact that the European Communities' first ser ies of main claims, alleging violations of
Articles 23.1, 23.2(a), and 21.5, did not include Ar ticle 22.8 of the DSU. The European Communities
further contends that the Panel's approach in examining the claims under Articles 23.1 and 23.2(a)
was correct, because Directive 2003/74/ EC, as a measure taken to comply, must be presumed to be
compliant with the covered agreements until shown otherwise in Article 21.5 proceedings.
380. In section D above, we found that the presumption that an implementing Member acts in good
faith is insufficient to establish substantive co mpliance. The European Communities should be
presumed to have acted in good faith when adopting the implementing measure; however, this did not
mean that the taking of such measure in itself establishes that the measu re achieves substantive
compliance. We also rejected the formalistic inte rpretation of Article 22.8 advanced by the European
Communities that the adoption, and notification to th e DSB, of a measure taken to comply replacing
the original measure is sufficient to establish the removal of the measure found to be inconsistent with
a covered agreement within the meaning of Arti cle 22.8. Rather, a proper interpretation of
Article 22.8, in its context and in the light of the object and purpose of the DSU, indicates that
substantive compliance is required before the susp ension of concessions must be terminated. Where
parties disagree as to whether there is substan tive compliance, the duty to cease the suspension of
concessions is not triggered until substantive comp liance is determined through multilateral dispute
settlement proceedings. A unilateral declaration of compliance cannot have the same effect. We note
that, as the original respondent, the European Co mmunities has the option to initiate Article 21.5
panel proceedings for purposes of determining whet her the DSB's recommendations and rulings have
been implemented through the adoption of Directive 2003/74/EC.
381. The European Communities further submits th at, upon the adoption of Directive 2003/74/EC
in good faith, the suspension of concessions would have achieved its objectiv e and would do nothing
to induce compliance. Article 22.1 of the DSU prov ides that the suspension of concessions is not to
be "preferred to full implementation of a recommendation to br ing a measure into conformity with
the covered agreements".
790 Requiring termination of the suspension of concessions simply because a
Member declares that it has rem oved the inconsistent measure, w ithout a multilateral determination
that substantive compliance has indeed been achieved, would undermine the important function of the
suspension of concessions in inducing compliance. This would significantly weaken the effectiveness

790Moreover, pursuant to Article 3.3, the "prompt settlement" of disputes "is essential to the effective
functioning of the WTO and the maintenance of a proper balance between the rights and obligations of
Members".

of the WTO dispute settlement system and its abili ty to provide security and predictability to the
multilateral trading system.
382. The European Communities additionally submits that its position is consistent with the
approach taken in the Articles on Responsibility of States for Internationally Wrongful Acts
791 (the
"Articles on State Responsibility"), which require that countermeasures be suspended if the
internationally wrongful act has ceased and the dis pute is pending before a tribunal that has the
authority to make decisions binding upon the parties. 792 Yet, the Articles on State Responsibility do
not lend support to the European Communities' po sition. For example, Article 53 provides that
countermeasures must be terminated as soon as the State "has complied with its obligations" in
relation to the internationally wrongful act. Thus , relevant principles under international law, as
reflected in the Articles on State Responsibility, support the proposition that countermeasures may
continue until such time as the responsible State h as ceased the wrongful act by fully complying with
its obligations.
383. In sum, the suspension of concessions maintain ed by the United States and Canada has been
duly authorized by the DSB and was obtained through recourse to the relevant rules and procedures of
the DSU, consistently with Article 23.1 of the DSU. Pursuant to Article 22.8, the legality of the
continued suspension of concessions depends on whet her the measure found to be inconsistent in
EC – Hormones has been removed, and this requires subs tantive compliance. We therefore find
 that
the Panel erred in considering that the European Communities' claims under Articles 23.2(a), 23.1,
and 21.5 may be examined "completely separat ely" from whether the European Communities
implemented the DSB's recommendations and rulings in EC – Hormones.793
384. The DSB's authorization does not mean that Article 23 becomes irrelevant. Rather, as
Article 23.2(c) specifies, the suspension of concessions is subject to Article 22, including the
requirement in Article 22.8 that it shall only be applied until such time as the measure found to be
inconsistent with the covered agreements has been removed. Therefore, the suspension of
concessions by the United States and Canada would be in breach of Article 23.2(c), and consequently
Article 23.1, if it were established in WTO dispute settlement that the inconsistent measure has indeed
been removed within the meaning of Article 22.8 a nd the suspension is not immediately terminated.
Article 22.8 thus provides relevant context for the analysis of the issues appealed under Article 23.
Moreover, the application of DSB-authorized susp ension of concessions is temporary and subject to
the objective conditions laid down in Article 22. 8. The United States, Canada, as well as the

791See supra, footnote 481.
792See European Communities' appellee's submission, paras. 94-96.
793Panel Report, US – Continued Suspension , para. 7.182; Panel Report, Canada – Continued
Suspension, para. 7.164.

European Communities, have the shared responsibility to ensure that the suspension of concessions is
not applied beyond the time foreseen in Article 22. 8. Consequently, the United States and Canada
have a duty to engage actively in dispute settleme nt proceedings concerning whether the suspension
of concessions is applied consistently with such c onditions. Failing to do so co uld be contrary to the
overarching principle in Article 23.1 prohibiti ng Members from seeking redress without having
recourse to, or abiding by the rul es of, the DSU. Nonetheless, this is not currently the case, because
both the United States and Canada are actively engaged in these proceedings initiated by the European
Communities to determine whether the measure found to be inconsistent with a covered agreement in
EC – Hormones has been removed within the meaning of Article 22.8.
3. Whether the Panel Erred in Finding th at the United States and Canada Are
"Seeking the Redress of a Violation" with Respect to Directive 2003/74/EC
385. We turn to examine the claim by the United Stat es and Canada that the Panel erred in finding
that, by continuing the susp ension of concessions subseque nt to the notification of
Directive 2003/74/EC, they were seeking the redres s of a violation without having recourse to, or
abiding by, the rules and procedures of the DSU within the meaning of Article 23.1 of the DSU.
386. The Panel found that Directive 2003/74/EC, wh ich the European Communities adopted to
implement the DSB's recommendations and rulings in EC – Hormones , is a new measure that "has
never been as such subject to recourse to the rules and procedures of the DSU". 794 The Panel stated
that, although Directive 2003/74/EC, like Directive 96/22/EC (which was found to be WTO-
inconsistent in EC – Hormones), also imposed an import ban, "it is not the ban ... but the justification
for this ban which was found insufficient" in EC – Hormones .795 According to the Panel, therefore,
the fact that the ban remains in place does not me an that no new measure has been adopted. The
Panel thus found that, through the continued suspen sion of concessions, the United States and Canada
are seeking redress of a violation caused by Dir ective 2003/74/EC, a measure they had not challenged
by having recourse to the DSU.796
387. We recall that the suspension of concessions maintained by the United States and Canada was
authorized by the DSB as a result of the finding in EC – Hormones that Directive 96/22/EC was
inconsistent with the SPS Agreement. The Panel correctly noted that the existence of an import ban
in Directive 2003/74/EC (which replaced Directive 96/22/EC) does not mean that no implementing

794Panel Report, US – Continued Suspension , para. 7.206; Panel Report, Canada – Continued
Suspension, para. 7.198.
795Panel Report, US – Continued Suspension , para. 7.207; Panel Report, Canada – Continued
Suspension, para. 7.199.
796Panel Report, US – Continued Suspension , para. 7.215; Panel Report, Canada – Continued
Suspension, para. 7.207.

measure has been adopted. Yet, the Panel's anal ysis under Article 23 stopped short of considering
whether the European Communities' implementing m easure resulted in substantive compliance. As
we explained earlier, such analysis is necessary to determine whether the suspension of concessions
was required to be terminated pursuant to Article 22.8 of the DSU. Even if the United States and
Canada could be said to continue to seek redress of the violation resulting from Directive 96/22/EC by
maintaining the suspension of concessions, they are not prevented from doing so as long as the
removal of the inconsistent measure has not b een established in WTO dispute settlement. In
obtaining DSB authorization for that suspension, th e United States and Canada abided by the DSU as
required by Article 23.1. The Pa nel's finding that, by maintaini ng the suspension of concessions, the
United States and Canada are seeking the redress of a violation without abiding by the rules of the
DSU thus appears to presuppose what is yet to be es tablished, that is, that the inconsistent measure
against which the suspension of concessions was authorized (Directive 96/22/EC) has actually been
"removed" within the meaning of Article 22.8 by Directive 2003/74/EC.
797 This finding of the Panel
flows from its erroneous approach of consideri ng Articles 23.1 and 23.2(a) completely separately
from the requirements of Article 22.8, which we discussed and rejected earlier.
388. The Panel rejected the arguments by the United States and Canada that they were authorized
to suspend concessions and that this authorization has not been revoked. 798 The Panel stated that the
DSB's authorization to suspend concessions is "only an authorization , not an obligation".799
According to the Panel, this meant that the Un ited States and Canada were "free to apply" the
suspension of concessions or not, and the fact that they did not lift the suspension after the notification
of Directive 2003/74/EC indicated their inten tion to seek redress of a violation arising from
Directive 2003/74/EC.800 We fail to see the relevance of the distinction between an authorization and
an obligation to suspend concessions for purposes of analyzing whether the United States and Canada
are seeking the redress of a violation concerning Di rective 2003/74/EC. The relevant question before
the Panel was whether the authorization to susp end concessions had lapsed because one of three
conditions in Article 22.8 has been met. In the ab sence of a finding in WTO dispute settlement that

797In the context of addressing the European Communities' claim that the United States and Canada
also breached Article 22.8, the Panel found that "it has not been established that the European Communities has
removed the measure found to be inconsistent with a covered agreement." (Panel Report, US – Continued
Suspension, para. 7.847; and Panel Report, Canada – Continued Suspension , para. 7.832) For this reason, the
Panel concluded that the European Co mmunities "did not demonstrate a breach of Article 22.8 of the DSU" by
the United States and Canada. (Panel Report, US – Continued Suspension, para. 7.850; Panel Report, Canada –
Continued Suspension, para. 7.835)
798Panel Report, US – Continued Suspension , para. 7.208; Panel Report, Canada – Continued
Suspension, para. 7.200.
799Panel Report, US – Continued Suspension , para. 7.209; Panel Report, Canada – Continued
Suspension, para. 7.201. (original emphasis)
800Panel Report, US – Continued Suspension , paras. 7.209 and 7.210; Panel Report, Canada –
Continued Suspension, paras. 7.201 and 7.202.

the first condition in Article 22.8 had been met, the authorization to suspend concessions did not cease
to be legally valid.
389. In addition, the Panel observed that "[i]n none of the circumstances foreseen by [the first
sentence of] Article 22.8 does this provi sion require a decision of the DSB". 801 We agree that, under
the first sentence of Article 22.8, a decision of the DSB is not required if Members reach a mutually
agreed solution. Similarly, a DSB decision is not required if the suspending Member does not dispute
that the measure found to be inconsistent with a covered agreement has b een removed. However,
where a disagreement arises as to whether the measure found to be inconsistent has indeed been
removed, this disagreement must be resolved thro ugh Article 21.5 proceedings to determine whether
the suspension of concessions is still applied consistently with the objective conditions under
Article 22.8 or must be terminated. Under such circumstances, DSB decisions are required for the
dispute to proceed pursuant to the rules of the DSU, including the decision to establish a panel and the
adoption of the panel or Appellate Body reports examining the implementing measure. Moreover, the
second sentence of Article 22.8 requires the DSB to keep under surveillance the implementation of
adopted recommendations and rulings in cases where c oncessions have been suspended. Article 22.8
therefore clearly contemplates an ongoing role of the DSB in reviewing the implementation of
recommendation and rulings, thus confirming that a dispute concerning implementation should be
subject to multilateral resolution and not be deci ded on the basis of a unilateral declaration of
compliance or non-compliance.
390. We also note the Panel's statement that , "pursuant to Article XVI:4 of the [ WTO Agreement],
Members must ensure the conformity of their laws, regulations and administrative procedures with
their obligations as provided" in the covered agreements, "including the DSU".
802 According to the
Panel, this obligation also applies to the suspensi on of concessions. Article XVI:4 applies equally to
all WTO Members. The European Communities w as required to ensure the conformity of its
implementing measure, just as it is the obligation of the United States and Canada to ensure the
conformity of their continued app lication of suspension of concessions. 803 We do not see the
relevance of this provision in the Panel's anal ysis under Article 23.1 of the DSU, as long as the
conditions for the cessation of suspension under Article 22.8 have not been established.

801Panel Report, US – Continued Suspension , para. 7.211; Panel Report, Canada – Continued
Suspension, para. 7.203.
802Panel Report, US – Continued Suspension , para. 7.212; Panel Report, Canada – Continued
Suspension, para. 7.204.
803As the United States argues, this provision "militates equally in favor of a finding that the continued
suspension of concessions by the United States" after the European Communities' notification of
Directive 2003/74/EC "did not demonstrate that the United States was 'seeking redress of a violation' within
the meaning of Article 23.1 with respect to" this Directive. (United States other appellant's submission,
para. 58) (original emphasis)

391. On appeal, the European Co mmunities submits that "the adoption of a measure taken to
comply" that is " different from the original [measure] triggers the presumption of good faith
compliance" and, consequently, the "obligati on to remove the suspension of concessions".
804 T h e
European Communities' argument is again prem ised on the proposition that the implementing
measure should be presumed to bring about full co mpliance as a result of the application of the
presumption of good faith, as well as its understanding of the phrase "the measure found to be
inconsistent with a covered agreement has been re moved" in Article 22.8 as requiring merely the
formal removal of the original measure, both of which we rejected in section D.
392. The European Communities further asserts that "even the United States acknowledged that it
was maintaining its suspension of concessions agai nst the new measure", as demonstrated by the
United States' statements at the DSB meetings sub sequent to the notification of Directive 2003/74/EC
and in its Trade Policy Agenda in 2005. 805 As will be discussed in subsection 4 below, the DSB
statements referred to by the European Communities do not, in themselves, have the legal effects that
the Panel attributed to them. Moreover, the Trade Policy Agenda document referred to by the
European Communities states that the United Stat es "maintains its WTO-authorized sanctions on
[European Communities'] products because the United States fails to see how the revised [European
Communities'] measure could be considered to im plement the recommendations and rulings of the
DSB in this matter".806 Thus, contrary to the European Communities' arguments, the statements make
clear that the legal basis for maintaining the su spension of concessions was not the new measure.
Rather, the basis for maintaining the suspension of concessions was that the United States considered
that the European Communities had failed to impl ement the DSB's recommendations and rulings in
EC – Hormones flowing from the inconsistency of Directive 96/22/EC.
393. Accordingly, we find that the Panel erred in concluding that, "by maintaining the suspension
of concessions even after the notification of [D irective 2003/74/EC]", the United States and Canada
are "seeking redress of a violation with respect to [t his Directive], within the meaning of Article 23.1
of the DSU".807

804European Communities' appellee's submission, para. 104. (original emphasis)
805Ibid., para. 106 (referring to Panel Report, US – Continued Suspension, paras. 7.219-7.221).
806Ibid.
807Panel Report, US – Continued Suspension , para. 7.215; Panel Report, Canada – Continued
Suspension, para. 7.207.

4. Whether the Panel Erred in Finding that the United States and Canada Made
a Determination of Violation Without Recourse to the DSU, Within the
Meaning of Article 23.2(a)
394. We turn now to review the claims by the United States and Canada that the Panel erred in
finding that they made a determination of viol ation regarding Directive 2003/74/EC without having
recourse to dispute settlement in accordance with th e rules and procedures of the DSU, contrary to
Article 23.2(a) of the DSU.
395. We recall that, on the basis of the statements made by Canadian and United States delegates
at two DSB meetings808 concerning Directive 2003/74/EC, the Panel concluded that the United States
and Canada had reached "a more or less final decision" 809 that this Directive is inconsistent with the
SPS Agreement and fails to implement the DSB's recommendations and rulings in EC – Hormones .
Such statements, in the Panel's view, constitute a "determination" under Article 23.2(a) of the DSU
and, because the determination was made unilatera lly without recourse to the DSU, it breached
Article 23.2(a).810
396. We share the view of the panel in US – Section 301 Trade Act that a "determination" within
the meaning of Article 23.2(a) "implies a high degree of firmness or immutability, i.e. a more or less
final decision by a Member in respect of the WTO consistency of a measure taken by another
Member".811 Moreover, preliminary opinions or views expressed without a clear intention to seek
redress are not covered by Article 23.2(a). 812 The statements made by delegates of the United States
and Canada, on which the Panel fo cused its attention, were made shortly after the European
Communities notified Directive 2003/74/EC to the DSB. The statements were made at the two DSB
meetings held, respectively, two weeks and five weeks from the DSB meeting at which
Directive 2003/74/EC was notified by the European Communities. 813 These statements, therefore,
seem no more than initial reactions to the Europ ean Communities' self-proclaimed compliance with
the DSB's recommendations and rulings in EC – Hormones. Considering the complexity of the issues

808See Panel Report, US – Continued Suspension, paras. 7.219 and 7.220 (quoting Minutes of the DSB
Meetings held on 7 November and 1 December 2003, WT/DSB/M/157, paras. 29 and 30, and WT/DSB/M/159,
para. 25, respectively); and Panel Report, Canada – Continued Suspension , paras. 7.211-7.213 (quoting
Minutes of the DSB Meetings held on 7 November and 1 December 2003, WT/DSB/M/157, para. 31, and
809Panel Report, US – Continued Suspension , para. 7.222; Panel Report, Canada – Continued
Suspension , para. 7.215 (quoting Panel Report, US – Section 301 Trade Act, footnote 657 to para. 750).
810Panel Report, US – Continued Suspension , paras. 7.225 and 7.226; Panel Report, Canada –
Continued Suspension, paras. 7.219, 7.222, and 7.223.
811Panel Report, US – Section 301 Trade Act, footnote 657 to para. 7.50.
812See ibid.. See also Panel Report, US – Certain EC Products, para. 6.18.
813The European Communities notified the DSB of the adoption of Directive 2003/74/EC on 27
October 2003. See Panel Report, US – Continued Suspension , para. 7.219; and Panel Report, Canada –
Continued Suspension, para. 7.211.

that arise with respect to the consistency of Di rective 2003/74/EC (as demonstrated in sections VI
and VII of the Report), it is reasonable to assume that the United States and Canada needed some time
before forming a definitive view regarding whether the European Communities had brought itself into
compliance. We thus share the United States' and Canada's view that the statements at the DSB
meetings lack sufficient amount of "firmness or im mutability" for them to constitute a determination
within the meaning of Article 23.2(a).
814
397. In their statements, the United States and Cana da indicated that they would be willing to
engage in further bilateral discussions rega rding the alleged scientific justification for
Directive 2003/74/EC.815 This readiness to discuss Directive 2003/74/EC is difficult to reconcile with
a finding that the DSB statements constituted a "d etermination" with the type of firmness and
immutability required by its ordinary meaning and the relevant context of Article 23, as interpreted by
the panel in US – Section 301 Trade Act . The Panel recognized this inte ntion to engage in bilateral
discussions evidenced in the DSB statements, but f ound that the consultations that took place after the
notification of Directive 2003/74/EC "lar gely related to procedural issues". 816 Simply because
subsequent consultations re lated largely to procedural issues does not mean that, at the time the DSB
statements were made , the United States and Canada had made a unilateral determination without
recourse to the DSU within the meaning of Article 23.2(a).
398. Moreover, DSB statements are not intended to have legal effects and do not have the legal
status of a definitive determination in themselves. Rather, they are views expressed by Members and
should not be considered to prejudice Members' positi on in the context of a dispute. As the United
States rightly points out, "[s]tatements made by Members at DSB meetings, especially those

814United States' other appellant's submission, paras. 79-81; Canada's other appellant's submission,
para. 89. Canada adds that the statements made at the two DSB meetings were "the equivalent of Canada
reserving its rights while not acquiescing to the [European Communities'] assertions of compliance". ( Ibid.)
We consider this a proper characterization of these statements.
815Panel Report, US – Continued Suspension , para. 7.220; Panel Report, Canada – Continued
Suspension, para. 7.212. The United States indicated at th e meeting of 1 December 2003 that "[t]he United
States would be pleased to discuss with [European Co mmunities'] officials any outstanding issues regarding the
[European Communities'] ban on certain beef produced in the United Stat es, including their reactions to the
detailed points that the United States had raised in its statement at the 7 November DSB meeting. With regard
to the suggestion made by the [European Communities] at the present meeting that multilateral proceedings be
initiated, the United States would be happy to discu ss this suggestion with the [European Communities] along
with other procedural options." (Panel Report, US – Continued Suspension, para. 7.220) Canada indicated at the
meeting of 7 November 2003 that "Canada did not see any reason for WTO procedures at this time, but would
welcome the opportunity for further discussion with the [European Communities] concerning the justification
for its measures." (Panel Report, Canada – Continued Suspension, para. 7.211)
816Panel Report, US – Continued Suspension , para. 7.224; Panel Report, Canada – Continued
Suspension, para. 7.222.

expressing a view as to the WTO consistency of anot her Member's measures or actions, are generally
diplomatic or political in nature" and "generally have no legal effect or status in and of themselves".817
399. The Panel's finding that DSB statements could constitute a definitive determination
concerning the WTO-inconsistency of a Member's measure could adversely affect WTO Members'
ability to freely express their views on the potential compatibility with the covered agreements of
measures adopted by other Members. 818 This would result in a "chilling" effect on those
statements819, because Members would refrain from expressing their views at DSB meetings regarding
the WTO-inconsistency of other Members' measures lest such statements be found to constitute a
violation of Article 23. If this were the case, the DSB would be inhibite d from properly carrying out
its function, pursuant to Article 21.6 of the DSU, to keep under surveillance the implementation of its
recommendations and rulings.
400. The European Communities disagre es with the United States' argument that statements made
at DSB meetings have no legal effect in themselv es, arguing, instead, that "those statements can be
used as evidence of a particular position, view or determination taken by a Member." 820 T h e
European Communities refers to th e Appellate Body's observation in US – Upland Cotton
(Article 21.5 – Brazil) that certain statements in a United States Government press release indicated
that it was taking a measure to comply with the DSB's recommendations and rulings. 821 T h e
European Communities' reliance on th e Appellate Body's findings in US – Upland Cotton
(Article 21.5 – Brazil) is misplaced. In that dispute, the Appellate Body did not rely on the press
release of the United States Government in making a finding on the scope of the "measure taken to
comply", but only referred to the statements of th e United States' officials as providing confirmation
of its earlier conclusion, reached on the basis of an examination of the measure itself and the DSB's
recommendations and rulings in the or iginal dispute. In contrast, the Panel in this dispute based its
finding that the United States and Canada made a determination of violation directly on the statements
they made at the DSB.

817United States' other appellant's submission, para. 93.
818We note the United States' concern that "[t]he Panel has thereby made the bold and novel move of
transforming the minutes of DSB, other WTO committee meetings, and even Trade Policy Review meetings
into a fertile source of comments that ... could constitu te 'determinations' actionable under Article 23.2(a)."
(Ibid., para. 94)
819Ibid., para. 95.
820European Communities' appellee's submission, para. 131. (original emphasis)
821Ibid. (referring to Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), para. 204).

401. We agree therefore with the United States and Canada that their statements at the DSB
meetings did not involve the degree of firmness or immutability necessary in order to constitute a
"determination" within the meaning of Article 23 of the DSU.
822
402. The Panel went on to find that, even if the DSB statements were considered to be provisional,
"the subsequent continuation of the suspension of concessions by [the United States and Canada]
without alteration and without saying that [t hey were] still studying [Directive 2003/74/EC]"
confirmed that they made such a "determination". 823 The United States and Canada submit that the
Panel "inferred" 824, or "construed" 825 the existence of a determination on the basis of the mere
continuation of the suspension of concessions. Th ey argue that the Panel's reasoning is flawed
because it draws an inference from the "inaction" 826, or "non-feasance" 827, of the United States and
Canada in failing to terminate the suspension of concessions.
403. As we stated earlier, the DSB authorization of the suspension of concessions by the United
States and Canada flowed from the inconsistency of Directive 96/22/EC and continued to be legally
valid until the measure found to be incons istent with a covered agreement in EC – Hormones was
removed within the meaning of Article 22.8. A lthough the European Communities may have claimed
to have removed the inconsistent measure and declared compliance, the United States and Canada
disagreed that this was in fact the case. T hus, until the removal of the European Communities'
inconsistent measure was determined through WTO dispute settlement, the United States' and
Canada's authorization to suspend concessions di d not lapse. Under these circumstances, the
suspension of concessions applied pursuant to the DSB's authorization in respect of
Directive 96/22/EC was maintained through recourse to, and abiding by, the rules and procedures of
the DSU. Its continuation thus did not "confirm" that the United States and Canada made a unilateral
determination regarding Directive 2003/74/EC, as the Pa nel found, in violation of Article 23.2(a) of
the DSU.828

822United States' other appellant's submission, para . 96; Canada's other appellant's submission,
para. 89.
823Panel Report, US – Continued Suspension , para. 7.230; Panel Report, Canada – Continued
Suspension, para. 7.224.
824United States' other appellant's submission, para. 98.
825Canada's other appellant's submission, para. 81.
826United States' other appellant's submission, para. 98.
827Canada's other appellant's submission, para. 81.
828Nonetheless, we do not share the view of the United States and Canada that the continued suspension
of concessions should be properly characterized as inaction. Upon the authorization to suspend concessions
in 1999, the United States and Canada respectively took th e measures to impose tariffs on all imports of certain
European Communities products at rates substantially exceeding the bound tariff rates and have continuously
collected the additional tariffs since then. Thus, the continued suspension of concessions by the United States
and Canada is more properly characterized as an ongoing action.

404. The United States further asserts that, by inferring the existence of a "determination" within
the meaning of Article 23.2(a) on the basis of the continued suspension of concessions, the Panel
effectively read into Article 23 a deadline by wh ich a unilateral determinat ion inconsistent with
Article 23.2(a) will be imputed to a Member, ev en though Article 23 contains no such deadline. 829
The European Communities contends that the Pane l correctly observed that the deadline by which a
Member shall have recourse to the DSU pursuant to Articles 23.1 and 23.2(a) "was not an issue before
the Panel".830 However, without a proper identification of the time at which the continued suspension
of concessions would be found to constitute a unilate ral determination inconsistent with the DSU,
WTO Members would be unsure as to when or for how long they could properly rely on a DSB
authorization to suspend concessions. Such an outcome is contrary to the DSU's objective of
providing security and predictability.
831 In any event, given that we have found above that an original
respondent may initiate Article 21.5 proceedings, and that the authority to suspend concessions lapses
once one of the three conditions in Article 22.8 is met, we feel no need to further explore this
question.
405. Thus, we conclude that the Panel erred in finding that the United States and Canada "made a
'determination' within the meaning of Article 23.2(a) in relation to Directive 2003/74/EC" on the basis
of statements made at DSB meetings and the fact that the suspension of concessions continued
subsequent to the notification of Directive 2003/74/EC.
832
406. Having found that the United States and Canada ma de a determination of violation in relation
to Directive 2003/74/EC, the Panel went on to find that, because "the authorization to suspend
concessions" does not amount to "a multilate ral determination of inconsistency" 833 of
Directive 2003/74/EC, the United States and Canada had not made the determination through recourse
to dispute settlement in accordance with the rules and procedures of the DSU. 834 However, whether
Directive 2003/74/EC "removed" the inconsistencies w ithin the meaning of Article 22.8 was disputed
and had not yet been determined through WT O dispute settlement. Therefore, the DSB's
authorization remained valid. The Panel's finding al so contradicts its own approach, correctly taken
in the context of its examination of Article 22.8, th at the suspension of concessions is not required to

829United States' other appellant's submission, para. 105.
830European Communities' appellee's submission, para. 134 (referring to Panel Report, US – Continued
Suspension, para. 7.232).
831See Canada's other appellant's submission, para. 81.
832Panel Report, US – Continued Suspension , para. 7.239; Panel Report, Canada – Continued
Suspension, para. 7.232.
833Panel Report, US – Continued Suspension , para. 7.242; Panel Report, Canada – Continued
Suspension, para. 7.235.
834Panel Report, US – Continued Suspension , para. 7.243; Panel Report, Canada – Continued
Suspension, para. 7.236.

be terminated merely on the basis of a formal re moval of the inconsistent measure but, rather, is
required once there is substantive compliance.
407. Because we have found that the Panel erred in concluding that the United States and Canada
made a determination that a violation has occurred within the meaning of Article 23.2(a), the Panel's
finding that the United States and Canada had "failed to make any such determ ination consistent with
the findings contained in the panel or Appellate Bo dy report adopted by the DSB or an arbitration
award rendered under the DSU", in breach of Article 23.2(a)
835, also fails.
5. Conclusion
408. We concluded in the preceding sections that the Panel erred in finding that the United States
and Canada were seeking the redress of a violation with respect to Directive 2003/74/EC, within the
meaning of Article 23.1 of the DSU, and made a de termination in relation to that Directive to the
effect that a violation has occurred, within the mean ing of Article 23.2(a) of the DSU. Therefore, we
reverse the Panel's finding that the United States and Canada have "vio lated Article[s] 23.1
and 23.2(a) of the DSU by seeking redress of violation of the WTO Agreement through a
determination that the [European Communities'] im plementing measure did not comply with the DSB
recommendations and rulings in the EC – Hormones case without having recourse to dispute
settlement in accordance with the rules and procedures of the DSU."836
409. The European Communities claims that, in order to fulfil their obligations under Articles 23.1
and 23.2(a) of the DSU to have recourse to dispute settlement in accordance with the DSU, the United
States and Canada were required to initiate Article 21.5 panel proceedings if they considered that
Directive 2003/74/EC fails to bring the European Communities into compliance. The European
Communities submits that, upon finding that the Unite d States and Canada breached Articles 23.2(a)
and 23.1 by seeking the redress of a violation without recourse to the DSU, the Panel should have also
found that the United States and Canada breached Ar ticle 21.5 by failing to initiate panel proceedings
under that provision. We have reversed the Pa nel's finding that the United States and Canada
breached Articles 23.2(a) and 23.1 by seeking the redress of a violation without recourse to the DSU.
We also recall our earlier finding that the origin al respondent is not precluded under Article 21.5 from
initiating Article 21.5 compliance proceed ings. Consequently, we dismiss the European
Communities' claim. This does not mean that the Un ited States and Canada do not have an obligation
to engage in the dispute settlement procedures in an cooperative manner. Rather, the United States,

835Panel Report, US – Continued Suspension , para. 7.244; Panel Report, Canada – Continued
Suspension, para. 7.237.
836Panel Report, US – Continued Suspension , para. 7.251; Panel Report, Canada – Continued
Suspension, para. 7.244.

Canada, and the European Communitie s have an obligation to engage in Article 21.5 proceedings in
order to obtain objective ascertainment of whether s ubstantive compliance has been achieved in this
case and whether the resolutive condition in Article 22.8 has been met.
G. The Panel's Finding that It Had No Jurisdiction to Make Findings under the SPS
Agreement
410. The United States and Canada request that, s hould the Appellate Body uphold the Panel's
findings that they breached Articles 23.2(a) and 23.1 of the DSU, it reverse the Panel's statement, in
the last paragraph of its Report, that it had no jurisdiction to determine the compatibility of
Directive 2003/74/EC with the SPS Agreement.837 Because we have reversed the Panel's finding that
the United States and Canada breached Articles 23. 2(a) and 23.1 of the DSU, the condition upon
which the United States' and Canada's requests rest is not met. We note, however, that in section D.4
above we upheld the Panel's finding that "it has ju risdiction to consider the compatibility of the
[European Communities'] implementing measure with the SPS Agreement as part of its review of the
claim raised by the European Communities w ith respect to Article 22.8 of the DSU." 838 In any event,
in sections VI and VII below, we reverse the Pa nel's findings under Articles 5.1 and 5.7 of the SPS
Agreement.
H. The Panel's Suggestion
411. In addition to finding that the United States and Canada committed procedural violations
under Article 23 of the DSU, the Panel suggested, pursuant to Article 19.1 of the DSU, that the United
States and Canada "should have recourse to the ru les and procedures of the DSU without delay". 839
The European Communities, the United States, and Canada all take issue with this suggestion.
412. The United States and Canada request that, in th e event that the Appellate Body upholds the
Panel's finding that the United States and Ca nada committed procedural violations under
Articles 23.2(a) and 23.1 of the DSU, the Appellate Body reverse the Panel's suggestion that they
should have recourse to the DSU without delay.840
413. The European Communities contends that the Pa nel's suggestion, that the United States and
Canada should have recourse to dispute settlement without delay, is "too vague to be of much

837United States' other appellant's submission, paras. 108 and 120; Canada's other appellant's
submission, para. 92.
838Panel Report, US – Continued Suspension , para. 7.379; Panel Report, Canada – Continued
Suspension, para. 7.376.
839Panel Report, US – Continued Suspension , para. 8.3; Panel Report, Canada – Continued
Suspension, para. 8.3.
840United States' other appellant's submission, paras. 108 and 116; Canada's other appellant's
submission, paras. 92 and 98.

assistance", because it is unclear to "which rules and procedures of the DSU" the United States and
Canada should have recourse.
841 Therefore, the European Communities requests the Appellate Body
to "improve the Panel's suggestion in order to bring it into a clear form that is also more in line with
the Panel's own findings". 842 More specifically, the European Communities requests the Appellate
Body to "modify" the suggestion so as to make clear that the United States and Canada should:
(i) cease applying the suspension of concessions; and (ii) seek resolution of any disagreement
regarding the consistency of Di rective 2003/74/EC through rec ourse to panel proceedings under
Article 21.5 of the DSU, or any other dispute settlement proceedings that the parties may agree.
843
414. The Panel's suggestion that the United States a nd Canada "should have recourse to the rules
and procedures of the DSU without delay" rests on its findings that the United States and Canada
breached Articles 23.2(a) and 23.1 of the DSU by seeking redress of a viol ation of the covered
agreement without having recourse to dispute settle ment under the DSU. We have reversed these
findings of the Panel. Thus, the Panel's suggestion cannot stand.
V. Due Process in the Panel's Consultations with the Scientific Experts
415. We now turn to the European Communities' cl aims that the Panel failed to respect the
principle of due process and, consequently, also fa iled to make an objective assessment of the matter
under Article 11 of the DSU, in selecting and relyin g upon two of the scientific experts consulted by
the Panel.
A. The Panel's Findings
416. On 25 November 2005, following consultation with the parties, the Panel adopted Working
Procedures for Consultations with Scientific a nd/or Technical Experts (the "Experts Working
Procedures").
844 The Panel decided not to establish an expe rt review group as had been suggested by
the European Communities, but to co nsult experts on an individual basis. 845 Moreover, the Panel
"sought information not only from selected experts but also from three relevant international entities,

842Ibid.
843Ibid., para. 480.
844Panel Report, US – Continued Suspension , para. 7.71; Panel Report, Canada – Continued
Suspension, para. 7.69. The Experts Working Procedures are reproduced in Annex A-5 of the Panel Reports. A
single expert selection process was carried out for both disputes. (Panel Report, US – Continued Suspension ,
845Panel Report, US – Continued Suspension , para. 7.71; Panel Report, Canada – Continued
Suspension, para. 7.69. The European Communities initially indicated that the Panel did not have to consult
experts. (Panel Report, US – Continued Suspension, para. 7.56; Panel Report, Canada – Continued Suspension,
para. 7.54)

the Codex Alimentarius Commission (Codex), the Joint FAO/WHO Expert Committee on Food
Additives (JECFA), and the International Agency for Research on Cancer (IARC)."846
417. In accordance with paragraph 3 of the Expe rts Working Procedures, the Panel solicited
suggestions for experts from the Secretariats of Codex, JECFA, and the IARC. 847 From these
suggestions, the Panel provided to the parties all the information received from the 11 experts that
were interested and available, and asked them to indicate any "compelling reasons" why particular
experts should not be chosen. 848 The European Communities objected to the inclusion of experts that
had participated in JECFA's risk assessment work, e xplaining that "the scientific controversy over the
JECFA reports is at the heart of this case and is the reason why the Panel is now seeking advice from
outside experts."849 The European Communities added that such experts "cannot be considered to be
objective and impartial in these circumstances, becau se this would amount to asking them to review
and criticise their proper work".850
418. Because the parties' positions with respect to the experts "differed significantly", the Panel
sought additional names of experts from the parties pursuant to paragraph 6 of the Experts Working
Procedures.851 Of the 71 experts suggested by th e international organizations and the
parties, 40 experts indicated that they were av ailable, and 35 responded to the request for their
curriculum vitae and information regarding pot ential conflicts of interest. 852 This information was
provided to the parties for comments and objections.853 As the Panel explained:
One party or another submitted objecti ons with regard to all but one
of the experts by arguing either that an expert lacked sufficient
expertise in the areas of the dispute identified as needing scientific or
technical expertise, or was affiliate d with the government of a party
to this dispute; or was affiliated with JECFA; or had received

846Panel Report, US – Continued Suspension , para. 7.78; Panel Report, Canada – Continued
Suspension, para. 7.76. (footnotes omitted)
847Panel Report, US – Continued Suspension , para. 7.79; Panel Report, Canada – Continued
Suspension, para. 7.77.
848Panel Report, US – Continued Suspension , para. 7.79; Panel Report, Canada – Continued
Suspension, para. 7.77.
849Letter from the European Communities to the Panel dated 16 January 2006 (quoted in European
850Ibid.
851Panel Report, US – Continued Suspension , para. 7.80; Panel Report, Canada – Continued
Suspension, para. 7.78.
852Panel Report, US – Continued Suspension , para. 7.82; Panel Report, Canada – Continued
Suspension, para. 7.80.
853Panel Report, US – Continued Suspension , para. 7.83; Panel Report, Canada – Continued
Suspension, para. 7.81.

funding from the pharmaceutical industry; or had been involved in
the regulatory approval of any of the six hormones.
854
419. On 24 March 2006, the Panel informed the pa rties of the six experts it had selected. The
Panel explained its considerations in the selection process as follows:
The Panel excluded experts with close links with governmental
authorities directly involved in policy-making regarding the six
hormones and experts with close links to pharmaceutical companies
or involved in public advocacy activities. The Panel chose not to
exclude a priori experts who had participated in the preparation and
drafting of JECFA's risk assessments because this would deprive the
Panel and the parties of the benefit of the contribution of
internationally recognized specialis ts and because the Panel was of
the opinion that experts familiar with the JECFA reports would be
well-placed to assist the Panel in understanding the work of JECFA
extensively referred to by the parties in their submissions, in
particular by the European Communities. Moreover, the Panel, who
was fully aware of the fields of competence of these experts,
considered that they would be competent to answer questions with
respect to risk assessment regarding the hormones at issue. The
Panel also decided not to exclude a priori all experts who were
current or past governmental employees unless a potential conflict of
interests could reasonably be assumed from their official functions.
In selecting the experts, the Panel also had in mind the need to
choose experts with expertise to cover all the fields identified as at
issue in the dispute.
855
420. The European Communities asked the Panel to r econsider its decision with respect to two
experts, Dr. Jacques Boisseau 856 and Dr. Alan Boobis 857, arguing that "these experts had real or
perceived conflicts of interests that should disqualify them from assisting the Panel." 858 In addition to
reiterating concerns about the involvement of the two selected experts "in the drafting and adoption of
the JECFA reports concerning the subject matter of this dispute" 859, the European Communities
advanced other reasons to exclude Drs. Boisseau and Boobis. The European Communities argued
that Dr. Boisseau should be dismissed because he had not "submitted a statement of conflict of
interest to the Panel", had "already taken a position on the issue at stake in this dispute" in a public

854Panel Report, US – Continued Suspension , para. 7.84; Panel Report, Canada – Continued
Suspension, para. 7.82.
855Panel Report, US – Continued Suspension , para. 7.85; Panel Report, Canada – Continued
Suspension, para. 7.83. (footnote omitted)
856Former Director, French Agency for Veteri nary Medical Products. (See Panel Report, US –
857Director, Experimental Medicine and Toxicology Division of Medicine, Faculty of Medicine,
Imperial College, London; Professor of Biochemical Pharmacology at Imperial College, London. (See Panel
Report, US – Continued Suspension, para. 7.86; and Panel Report, Canada – Continued Suspension, para. 7.84)
858Panel Report, US – Continued Suspension , para. 7.87; Panel Report, Canada – Continued
Suspension, para. 7.85.
859Letter from the European Communities to the Panel dated 28 March 2006 (quoted in European

hearing before the French Senate, had taken a positi on in a public debate "that only 'major' risks are
relevant in precautionary decision making", and had neither "carried out any real scientific research"
nor "written anything on the substances under consideration". 860 With regard to Dr. Boobis, the
European Communities alleged that he had receive d funding from, and provided consultancy to,
several pharmaceutical companies, some of which had not been disclosed in his statement on conflicts
of interest. 861 The Panel did not consider that th e European Communities' objections were
"justified"862, adding:
The Panel found in particular that the statement that one expert had
made before the French Senate in 1996 had not been made in relation
to hormones used for growth promotion purposes. Rather, it had been
made with respect to hormones used for medical treatment purposes.
The Panel also found that the links of another expert with two
companies involved in research and counselling were not in the area
of veterinary drugs or hormonal substances. … In addition, having
considered the information availa ble about the various candidates,
the Panel found that these two experts were the best choices among
the very few individuals available with expertise in the area of risk
assessment and would be able to provide the Panel with insight on
international standards on the hormones at issue.
863
421. At the interim review stage, and upon a re quest made by the European Communities for
clarification of certain passages, the Panel said th at it "remain[ed] however puzzled by the [European
Communities'] suggestions that a scientist who worked with JECFA could be deemed to be biased in
assessing the scientific evidence on which [European Communities'] Directive 2003/74/EC relies and
could be assumed to defend JECFA's work".864 The Panel explained:
First, scientists would readily admit that science is constantly
evolving and the fact that new studies are peer reviewed is evidence
that assessing new ideas and findings is part of scientific work.
Assuming that scientists may lack objectivity because they

860Letter from the European Communities to the Panel dated 28 March 2006 (quoted in European
861Ibid.
862Panel Report, US – Continued Suspension , para. 7.87; Panel Report, Canada – Continued
Suspension, para. 7.85.
863Ibid. The Panel further commented that:
The Panel wishes to highlight the challenges it encountered in selecting
experts. There was a limited number of specialists suggested and actually
available in each of the fields on which the Panel needed assistance and
almost always one or more of the par ties objected to that specialist. For
example, only six of the identified ava ilable experts were deemed to have
extensive expertise in risk analysis. A ll of these experts were objected to by
at least one party.
(Panel Report, US – Continued Suspension , footnote 382 to para. 7.87; Panel Report, Canada – Continued
Suspension, footnote 374 to para. 7.85)
864Panel Report, US – Continued Suspension , para. 6.22; Panel Report, Canada – Continued
Suspension, para. 6.21.

participated in the preparation and drafting of JECFA's risk
assessments on the hormones at issue would call into question the
whole principle of peer review. The Panel also notes that JECFA is
the body that provides the independent scientific advice on which the
work of Codex is based and Codex is expressly recognized by the
SPS Agreement as having responsibilities for the establishment of
"international standards, guidelines and recommendations". The
Panel also recalls the role given to international standards, guidelines
and recommendations by Article 3.1 and 3.2 of the SPS Agreement.
It is therefore consistent with this role for the Panel to rely on experts
who contributed in the preparation and drafting of JECFA's risk
assessments of the substances at issue.
865
422. The Panel elaborated further that:
... it was necessary for the Panel to be able to rely on the advice of
experts intimately knowledgeable about the substance of JECFA's
risk assessments. ... Second, the Pa nel recalls that JECFA is an
international, independent entit y composed of highly qualified
experts selected by the WHO or FAO according to strict procedures.
JECFA also regularly reassesses its risk assessments. ... Moreover,
JECFA reaches its conclusions by consensus. So the opinions
expressed by the two experts were given with regard to the
consensual view of JECFA on this matter, not just their own personal
positions in the past. This does not mean, however, that JECFA's
work is these particular experts' own work: it is a joint work by
several experts.
The experts that the European Co mmunities claims were defending
their work acknowledge that the st ate of knowledge can evolve. ...
The experts consulted by the Panel are used to considering and peer
reviewing studies that go beyond what they have published
themselves or perhaps even contradict them. In other words, they are
not likely to feel any need to defe nd their own previous work results
in the light of new, convincing evidence or techniques that put such
previous work into doubt.
866
423. The Panel also rejected the European Communitie s' argument that "the two experts at issue
should not be described as 'internationally recognized specialists'"867:
The Panel recalls that they have been selected by the FAO and WHO
as part of the JECFA selection process. The selection procedure has
been described in JECFA's reply to question 14 to JECFA. The
Panel fails to understand why the JECFA selection would not be
evidence of the international reputation of the scientists at issue. The
[European Communities] concerns about JECFA's work and the

865Panel Report, US – Continued Suspension , para. 6.22; Panel Report, Canada – Continued
Suspension, para. 6.21.
866Panel Report, US – Continued Suspension, paras. 6.62 and 6.63; Panel Report, Canada – Continued
Suspension, paras. 6.57 and 6.58. (footnotes omitted)
867Panel Report, US – Continued Suspension , para. 6.23; Panel Report, Canada – Continued
Suspension, para. 6.22.

selection of experts to participate in that work are in contradiction
with the role attributed by the SPS Agreement to Codex and to
international standards, guidelin es and recommendations. The Panel
was fully aware of the area of expertise of the two scientists at issue,
and believed that they would be more at liberty to comment on the
content of JECFA's work than offici als of the JECFA Secretariat. It
also specified the reasons why those experts were selected in spite of
not having carried out experiments with the substances at issue and
does not see any need for further substantial elaboration.
868
424. During the Panel proceedings, the experts provided written responses to scientific and
technical questions posed by the Panel.869 The Panel held a meeting with the scientific experts, which
included the participation of the parties. At the m eeting, the parties and the Panel had the opportunity
"to ask questions to the experts and for the experts to clarify points that they had made in their written
responses to the questions".870
B. Claims and Arguments on Appeal
425. On appeal, the European Communities asserts that "the consultation of experts by the Panel[]
for the purposes of scientific and technical advice including their selection must respect general
principles of law, and in particular the principle of due process."
871 The European Communities adds
that "[i]t is inherent in the principle of due process that the parties to a dispute are given a fair hearing
including that the experts a court, tribunal or panel hears or consults are independent and
impartial."872 The European Communities takes issue with the Panel's selection of Dr. Jacques
Boisseau and Dr. Alan Boobis. The European Comm unities claims that "any 'reliance' the Panel[]
[has] placed on what these two experts from JECFA said is a violation of the relevant rules on conflict
of interest, of its rights of due process and of the requirement for the Panel[] to perform an 'objective
assessment' of the matter before [it]" 873 as required under Article 11 of the DSU. As a result, the
European Communities requests that the Appellate Body "reverse all findings of the Panel[] which
depend on the advice [it] received from these experts".874
426. The European Communities contends that "the relevant legal test" the Panel should have
applied is whether there was "likelihood or justifia ble doubts" as to the experts' independence, a test

868Panel Report, US – Continued Suspension , para. 6.23; Panel Report, Canada – Continued
Suspension, para. 6.22. (footnotes omitted)
869Panel Report, US – Continued Suspension , paras. 7.95-7.97; Panel Report, Canada – Continued
Suspension, paras. 7.92-7.94.
870Panel Report, US – Continued Suspension , para. 7.98; Panel Report, Canada – Continued
Suspension, para. 7.95. (footnote omitted) The Panel's meeting with the scientific experts took place
immediately before the second substantive meeting of the Panel with the parties.
872Ibid. (original emphasis)
873Ibid., para. 202.
874Ibid., para. 212.

that the European Communities descr ibes as "quite simple and low", and not requiring "certainty or
high probability".
875 The standard applied by the Panel, however, was "based on a very narrow
definition of a perceived conflict of interest becaus e it required an actual or almost certain conflict,
not a perceived, likelihood or a justifiable doubts test". 876 The European Communities asserts that
Dr. Boisseau took "a position in favour of the saf ety of these hormones" and that "Dr. Boobis has
been receiving funding from the pharmaceutical industry in his research and counselling". 877 I n
addition, the European Communiti es alleges that, since Drs. Boisseau and Boobis were among the
authors of the JECFA reports, which are criticized in Directive 2003/74/EC on scientific grounds,
they should have been precluded from providing expert advice to the Panel. The European
Communities observes that, as co-authors of the JECF A reports, "[t]hey cannot be considered to be
independent and impartial in these circumstances, because this would amount to asking them to
review and criticise reports that are their own doing."878
427. The European Communities also faults the Panel for "relying overwhelmingly" 879 on the
opinions of Drs. Boisseau and Boobis; for failing to ensure that the self-disclosure requirement under
the Rules of Conduct be complied with before selecting these experts 880; for failing to "actually
examine[] whether all of the experts had a potential conflict of interest"; and for accepting as experts
persons whose independence and impartiality was not assured.881 Finally, the European Communities
argues that, "even if one were to take the view that the Panel[] could accept the non-independent
experts provided that [it] would constantly bear in mind the potential conflicts when weighing the
expert opinions, it is clear that the Panel[] refused to do so, considering the issue of the experts finally
resolved when dismissing the European Communities' objections." 882 Indeed, these experts
"dominate[d] the entire scientific examination by the Panel[] both from the point of view of how often
they [were] referred to and whether the Panel[] ever question[ed] their opinions and whether their
opinions go beyond science and stray into the area of the risk regulator."883
428. The United States argues that the Panel's conduct in the selection of experts was transparent
and consultative, providing the parties with notice and opportunities to respond, express their

876Ibid., para. 203.
877Ibid. The European Communities qualifies its charges against both experts. It admits, for instance,
that Dr. Boisseau's position on the safety of hormones was taken "in the context of a discussion on therapeutic
treatment in animals", and that the funding Dr. Boobis received from the pharmaceutical industry was "not from
companies in the area of veterinary drugs or these hormones". (Ibid.)
878Ibid., para. 205.
879Ibid., para. 212.
880Ibid., para. 192.
881Ibid.
882Ibid., para. 211. (footnote omitted)
883Ibid., para. 208.

concerns, and be heard before the Panel made its decisions. The United States further asserts that
"[t]he fact of the matter is that the Panel and th e parties were provided with full disclosure of the
experts' professional affiliations and financial interests" and "[t]he record demonstrates that the Panel
took the [European Communities'] concerns into account in concluding that the two experts in
question were not disqualified from serving." 884 Moreover, the United States alleges that the
European Communities provides no support for the cl aims regarding due process rights, arguing that
the European Communities cited nothing more "than the most general statement" by the Appellate
Body in Thailand – H-Beams and a judgment by the European Court of Human Rights that the
European Communities had already relied upon in its challenge to the panel's expert selection process
in EC – Hormones .885 Finally, in respect of the European Communities' allegation of breach of
Article 11 of the DSU, the United States argues that the Panel acted within the proper bounds of its
discretion as fact-finder.886
429. Canada rejects the position of the European Comm unities that the relevant legal standard to
determine independence or impartiality is "likelihood or justifiable doubt". 887 Rather, it observes that
the only standard governing conflict of interest ques tions is found in Section II (Governing Principle)
of the Rules of Conduct. That provision requires that all persons covered under the Rules of Conduct,
including experts, "shall be independe nt and impartial" and "shall avoid direct or indirect conflicts of
interest".888 Moreover, Canada asserts that Drs. Bois seau and Boobis met the disclosure requirement
in the Experts Working Procedures, and that, in particular, both complied with the requirements by
disclosing their involvement in JECFA. In Canada's view, "it was up to the Panel to evaluate whether
this had an impact [on] the independence and impartiality of these candidates in this case."889
430. Canada argues that the Panel correctly found that Drs. Boisseau and Boobis were independent
and impartial. It notes that the Panel "expressly addressed" the allegation that these two experts were
defending their work when it explained that the pu rpose of consulting them was to obtain advice
about the substance of JECFA's risk assessment, and to help identify the extent to which concerns
raised by the European Communities had been considered in JECFA's risk assessment. 890 Canada
also points to language in the Panel Report, not ing that the Panel was asking the experts about
JECFA's consensual view, which may differ from the experts' personal views, and that both experts

885Ibid., para. 89.
886Ibid., para. 90.
887Canada's appellee's submission, para. 47 (quotin g European Communities' appellant's submission,
para. 195).
888Ibid., para. 47.
889Ibid., para. 49.

admitted to the Panel that the state of scientific knowledge can evolve.
891 In Canada's view, it is
inaccurate to portray the participation by Drs. Bo isseau and Boobis in JECFA panels as "giving them
an (almost proprietary) interest in the outcome of the JECFA process that they would have felt
compelled to defend when advising the Panel". 892 Canada cautions that the practical consequence of
the Panel excluding Drs. Boisseau and Boobis as expert s would have been that "the pool of eligible
experts would have been shrunk significantly, such that it would have become very difficult for the
Panel to appoint experts in all the areas of expertise that it had identified."893
431. Therefore, the United States and Canada request that the Appellate Body reject the European
Communities' claim that the Panel acted inconsis tently with the principle of due process, the
requirements of the Rules of Conduct , and Article 11 of the DSU, in selecting Drs. Boisseau and
Boobis, and to reject the request to reverse the Panel's findings that relied on the advice of these two
experts.
432. Australia agrees with the European Communities' submission that panels must observe due
process in selecting and consulting with experts, and considers that fundamental fairness and due
process "permeate[] all aspects of the WTO disput e settlement process, including a panel's use of
experts".894
C. Did the Panel Infringe the European Co mmunities' Due Process Rights and Fail to
Make an Objective Assessment of the Matter in the Consultations with the Scientific
Experts
433. The Appellate Body has previously found that the obligation to a fford due process is
"inherent in the WTO dispute settlement system" 895 and it has described due process requirements as
"fundamental to ensuring a fair and orderl y conduct of dispute settlement proceedings". 896 In our
view, the protection of due process is an essential f eature of a rules-based system of adjudication,
such as that established under the DSU. Due pro cess protection guarantees that the proceedings are
conducted with fairness and impartiality, and that one party is not unfairly disadvantaged with respect
to other parties in a dispute.
434. The Appellate Body has recognized the need for panels to afford due process to the parties
with respect to specific procedural issues. Fo r instance, the Appellate Body has recognized due

891Canada's appellee's submission, para. 54 (quoting Panel Report, Canada – Continued Suspension ,
para. 6.57).
892Ibid., para. 56.
893Ibid., para. 57.
894Australia's third participant's submission, para. 48.
895Appellate Body Report, Chile – Price Band System , para. 176. See also Appellate Body Report,
Mexico – Corn Syrup (Article 21.5 – US), para. 107.
896Appellate Body Report, Thailand – H-Beams, para. 88.

process as requiring that parties to proceedings be afforded an adequate opportunity to respond to
claims, arguments, or evidence presented by other parties. 897 It has also referred to the principle of
due process in suggesting the need for pane ls to have standard working procedures 898, and for panels
to have discretion to allow for the en hanced participation by third parties. 899 Moreover, the Appellate
Body has found that due process is required by Article 11 of the DSU. In US – Gambling , the
Appellate Body stated:
[A]s part of their duties, under Article 11 of the DSU, to "make an
objective assessment of the matter" before them, panels must ensure
that the due process rights of parties to a dispute are respected.900
435. These due process considerations are reflected in the Rules of Conduct. Section II (Governing
Principle) of the Rules of Conduct provides that all covered persons , such as panelists and experts
advising panels:
... shall be independent and impartia l, shall avoid direct or indirect
conflicts of interest and shall respect the confidentiality of
proceedings of bodies pursuant to th e dispute settlement mechanism,
so that through the observance of such standards of conduct the
integrity and impartiality of that mechanism are preserved.
436. Scientific experts and the manner in which thei r opinions are solicited and evaluated can have
a significant bearing on a panel's consideration of th e evidence and its review of a domestic measure,
especially in cases like this one in volving highly complex scientific issues. Fairness and impartiality
in the decision-making process are fundamental gua rantees of due process. Those guarantees would
not be respected where the decision-makers appoint and consult experts who are not independent or
impartial. Such appointments and consultations compromise a panel's ability to act as an independent
adjudicator. For these reasons, we agree with the view of the European Communities that the
protection of due process applies to a panel's consu ltations with experts. This due process protection
applies to the process for selecting experts and to the panel's consultations with the experts, and
continues throughout the proceedings.

897Appellate Body Report, US – Gambling, paras. 269-273; Appellate Body Report, Canada – Wheat
Exports and Grain Imports , para. 177; Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) ,
para. 47; Appellate Body Report, Australia – Salmon, paras. 272 and 278; and Appellate Body Report, Brazil –
Desiccated Coconut, p. 22, DSR 1997:I, 167, at 186.
898Appellate Body Report, Argentina – Textiles and Apparel , footnote 68 to para. 79; Appellate Body
899Appellate Body Report, US – FSC (Article 21.5 – EC) , para. 243; Appellate Body Report, EC –
Hormones, para. 154.

(a) Standard for Selection of Experts
437. The authority to seek information from individuals or to consult experts is provided to panels
pursuant to Article 13 of the DSU (Right to Seek Information). Article 13.2 provides:
Panels may seek information fro m any relevant source and may
consult experts to obtain their opinion on certain aspects of the
matter. With respect to a factual issue concerning a scientific or
other technical matter raised by a party to a dispute, a panel may
request an advisory report in writing from an expert review group.
Rules for the establishment of such a group and its procedures are set
forth in Appendix 4.
438. Article 11.2 of the SPS Agreement specifically addresses the consultation of experts in
disputes under that Agreement.
901 It reads:
In a dispute under this Agreement involving scientific or technical
issues, a panel should seek advice from experts chosen by the panel
in consultation with the parties to th e dispute. To this end, the panel
may, when it deems it appropriate, establish an advisory technical
experts group, or consult the releva nt international organizations, at
the request of either party to the dispute or on its own initiative.
439. Panels are understood to have "significant investigative authority"
902 under Article 13 of the
DSU and Article 11.2 of the SPS Agreement and broad discretion in exercising this authority. In
US – Shrimp, the Appellate Body expounded on the co mprehensive authority of panels under
Article 13:
The comprehensive nature of the authority of a panel to "seek"
information and technical advice from "any individual or body" it
may consider appropriate, or from "any relevant source", should be
underscored. This authority embrac es more than merely the choice
and evaluation of the source of the information or advice which it
may seek. A panel's authority in cludes the authority to decide not to
seek such information or advice at all. We consider that a panel also
has the authority to accept or reject any information or advice which
it may have sought and received, or to make some other appropriate
disposition thereof. It is particularly within the province and the
authority of a panel to determine the need for information and advice
in a specific case, to ascertain the acceptability and relevancy of
information or advice received, and to decide what weight to ascribe

901Article 11.2 of the SPS Agreement is listed in Appendix 2 of the DSU (Special or Additional Rules
and Procedures contained in the covered agreements).
902Appellate Body Report, Japan – Agricultural Products II, para. 129.

to that information or advice or to conclude that no weight at all
should be given to what has been received.903
440. The European Communities has not challenged on appeal the Panel's decision to consult
experts per se, nor does it claim that the Panel failed to consult with the parties on expert selection.904
The European Communities disagrees with the Panel's decision to consult experts individually, rather
than establish an expert review group, but does not raise a claim in this respect on appeal.905
441. Paragraph 9 of the Experts Working Procedures adopted by the Panel prescribes that experts
will be selected "on the basis of their qualification and the need for specialized scientific or technical
expertise". Paragraph 11 additionally provides:
The selected experts shall act in their individual capacities and not as
representatives of any entity. They shall be subject to the Rules of
Conduct for the Understanding on Rules and Procedures Governing
the Settlement of Disputes (WT/DSB/RC1), including the self-
disclosure requirement set out in Section VI of the Rules of Conduct.
442. As we noted earlier, experts advising panels are specifically covered by the Rules of Conduct
and, pursuant to Section II (Governing Principle), they "shall be independent and impartial, [and]
shall avoid direct or indirect conflicts of interest ... , so that through the observance of such standards
of conduct the integrity and impartiality of that mechanism are preserved".
443. Selected experts are also subject to certain self-disclosure and confid entiality obligations set
out elsewhere in the Rules of Conduct , and procedures exist for the refe rral of a "material violation"
of these obligations to the Chairman of the DSB for appropriate action.906
444. The European Communities claims that due process requires that the "experts a court, tribunal

903Appellate Body Report, US – Shrimp, para. 104. (original emphasis) Given the manner in which the
Appellate Body has addressed the scope of a panel's au thority under Article 13 of the DSU, this discretion
would seem to apply equally to the discretion of panels under Article 11.2 of the SPS Agreement.
904The Appellate Body has found that panels are free to consult experts as individuals or as part of an
expert review group. (Appellate Body Report, EC – Hormones, para. 147)
905The European Communities notes that the Panel "for no good reason declined to follow the
European Communities' suggestion to constitute an expert review group", and that "[i]n retrospect, this has
proven disastrous in this case in view of the very different, conflicting and irreconcilable opinions it received on
many crucial issues from its experts." (European Communities' appellant's submission, footnote 76 to para. 187)
The Panel explained its decision to consult experts on an individual basis with the following reasons: (1) the
experts' varying fields of competence would make it important, on relevant subjects, to consult experts
individually on their respective field of expertise; and (2) it did not want a consensus text from an expert review
group that would reflect a minimum common position, but wished to hear dissenting or minority views among
the experts. (Panel Report, US – Continued Suspension , para. 7.71; Panel Report, Canada – Continued
Suspension, para. 7.69)
906Rules of Conduct , Sections VI (Self-Disclosure Requirements by Covered Persons),
VII (Confidentiality), and VIII (Procedures Concerning Possible Material Violations).

or panel hears or consults are independent and impartial."
907 It then asserts that the relevant legal test
for evaluating whether an expert is independent and impartial is founded on the self-disclosure
obligation in Section VI.2 of the Rules of Conduct , which requires that experts "disclose any
information ... which is likely to affect or give rise to justifiable doubts as to their independence or
impartiality". This is a standard the European Communities asserts is "simple and low" and "does not
require certainty or high probability".
908
445. The requirements under Section VI of the Rules of Conduct relate, as the title indicates, to the
self-disclosure obligation of covered persons, including experts. The Rules of Conduct do not provide
for automatic exclusion of a covered person upon the disclosure of information pursuant to Section VI
and the Illustrative List of Information to be Disclosed, which is attached to the Rules of Conduct as
Annex 2. However, we fail to see on what basis a panel, presented with information likely to affect or
give rise to justifiable doubts as to the independen ce or impartiality of an expert, could choose to
consult such an expert.
446. We do not agree, however, with the European Communities' characterization of Section VI.2
as setting out a "low" standard. On the contrary, we c onsider the standard set forth in Section VI.2 to
be a strict one. Covered persons should be enc ouraged to disclose any information that may be
relevant for purposes of ascertaining whether ther e may be justifiable doubts as to their independence
or impartiality. Disclosure should not lead to automatic exclusion. Whether the disclosed
information is likely to affect or give rise to justifiable doubts as to the person's independence or
impartiality must be objectively dete rmined and properly subs tantiated. In the case of an expert, the
panel should assess the disclosed information agains t information submitted by the parties or other
information that may be available. It should then determine whether, on the correct facts, there is a
likelihood that the expert's inde pendence and impartiality may be a ffected, or if justifiable doubts
arise as to the expert's independe nt or impartiality. If this is indeed the case, the panel must not
appoint such person as an expert.
(b) Disclosure of Conflicts of Interest
447. The European Communities also argues that th e Panel did not enforce compliance with the
self-disclosure requirement, and did not adequately explore potential conflicts of interest. The
European Communities charges that the Panel "faile d to require that the self-disclosure requirement

907European Communities' appellant's submission, para. 188. (original emphasis)
908Ibid., para. 195.

be complied with" 909 for Dr. Boisseau and therefore rendered paragraph 4 of the Experts Working
Procedures "a dead letter".910
448. Section VI.2 of the Rules of Conduct requires all covered pers ons, including experts, to
"disclose any information that could reasonably be e xpected to be known to them at the time which,
coming within the scope of the Governing Principle of these Rules, is likely to affect or give rise to
justifiable doubts as to their independence or impartia lity". The Illustrative List of Information to be
Disclosed pursuant to Section VI includes the following examples of matters to be disclosed:
(b) professional interests (e.g. a past or present relationship with
private clients, or any interests the person may have in domestic or
international proceedings, and their implications, where these involve
issues similar to those addressed in the dispute in question);
(c) other active interests (e.g. activ e participation in public interest
groups or other organizations whic h may have a declared agenda
relevant to the dispute in question);
(d) considered statements of pers onal opinion on issues relevant to
the dispute in question (e.g. publications, public statements).
449. Paragraph 4 of the Experts Working Procedures adopted by the Panel provides:
The Panel will seek a curriculum vitae , including all relevant
publications, from each individual suggested. The candidate experts
will also be asked to provide inform ation about potential conflicts of
interest and indications on whether they have worked for, been
funded by or provided advice to the industries concerned, or to
domestic or international regulatory bodies involved in issues similar
to those addressed in this dispute. A list of eligible experts, including
their curricula vitae and declarations of interest will be provided to
the parties. Parties will have sufficient time to examine them and
will be given the opportunity to comment on and to make known any
compelling objections to any particular expert.
911
450. In his self-disclosure statement, Dr. Boisseau stat ed that "[h]aving worked as a civil servant, I
have no conflict of interest which could prevent me to serve as a scientific expert to these two WTO
panels."912 The purpose of the self-disclosure statement is to reveal relevant facts that would allow
the Panel to determine whether the information is likely to affect or give rise to justifiable doubts as to
the expert's independence or impartiality. Instead , Dr. Boisseau's statement draws a conclusion on a
matter that was for the Panel to decide. Dr. Bois seau's statement does not identify whether he has
"worked for, been funded by, or provided advice to , the industries concerned, or to domestic or

910Ibid., para. 197.
911Panel Reports, Annex A-5, p. A-10.
912See Panel record document, "Information on Conflict of Interest by Dr. Jacques Boisseau" (undated).

international regulatory bodies involved in issues sim ilar to those addressed in this dispute". The
statement does not mention his affiliation with JECFA, nor the fact that he was the Chairman or Vice-
Chairman of JECFA panels that evaluated some of the hormones at issue in this dispute.
913 A l s o ,
Dr. Boisseau's position as a civil servant did not itself shield him from having a conflict of interest.
Thus, we agree with the European Communities that Dr. Boisseau's statement would not appear to
comply fully with the requirements of Section VI.2 of the Rules of Conduct or paragraph 4 of the
Experts Working Procedures adopted by the Panel.
451. We note that, in Canada's view, the self-dis closure requirement was satisfied by the
information provided on Dr. Boisseau's curriculum vitae, which it considers provided full disclosure
of Dr. Boisseau's involvement with JECFA.
914 While panels should insist that self-disclosure
requirements under the Rules of Conduct are observed by potential experts, and while parties are
entitled to full self-disclosure by experts, we find that the Panel did not exceed its authority in
concluding that Dr. Boisseau's brief statement, wh en considered together with the information
contained in his curriculum vitae , provided sufficient disclosure in this case. Dr. Boisseau's
curriculum vitae provides information about his involvem ent with JECFA and his other professional
activities.915
452. The European Communities also claims that th e Panel "never actually examined whether all
of the experts had a potential conflict of interest a nd whether the experts fulfilled the conditions to be
truly independent and impartial". 916 We understand this claim to refer to the objections of the
European Communities, also raised in its lette r to the Panel dated 28 March 2006, that:
(i) Dr. Boisseau stated "in a public hearing in th e French Senate, in 1996 ... that the three natural
hormones do not present a danger for public health"; (ii) Dr. Boisseau took the position "in a public
debate ... that only 'major' risks are relevant in precautionary decision making"; and (iii) Dr. Boobis
allegedly received funding from one pharmaceutical company at the time of his disclosure, and did
not disclose potential funding and affiliations with two others.
917

913See infra, para. 458.
915Dr. Boisseau's curriculum vitae indicates that he was a member of JECFA between 1988-2001, its
Chairman in 1994, 1998, 2000, and 2002, and its Vice-Chairman in 1992, 1994, 1995, 1997, and 2001.
917Letter from the European Communities to the Panel dated 28 March 2006 (quoted in European

453. The Panel stated that it had "carefully c onsidered the European Communities' request,
including the information given regard ing potential conflicts of interest". 918 Nonetheless, the Panel
found that the European Communities' objections "were not justified"919, adding:
The Panel found in particular that the statement that one expert had
made before the French Senate in 1996 had not been made in relation
to hormones used for growth promotion purposes. Rather, it had been
made with respect to hormones used for medical treatment purposes.
The Panel also found that the links of another expert with two
companies involved in research and counselling were not in the area
of veterinary drugs or hormonal substances.
920
454. The European Communities challenge s the "narrow" conflict of in terest definition applied by
the Panel, and reiterates the "undisputed facts" that:
... Dr. Boisseau did take a position in favour of the safety of these
hormones, albeit in the context of a discussion on therapeutic
treatment in animals, and that Dr. Boobis has been receiving funding
from the pharmaceutical industry in his research and counselling,
albeit not from companies in the area of veterinary drugs or these
hormones (although this has never be en specifically verified). ... As
regards the industry funding of Dr. Boobis, the Panels refrained from
verifying whether there were any actual or possible links of the
companies funding him with other companies producing veterinary
drugs or these hormones. In fact, as far as the European
Communities knows, the Panels re frained from asking any question
to Dr. Boobis on this precise issue.
921
As we have found, the standard to be applied by pa nels when selecting experts is whether there is an
objective basis to conclude that an expert's indepe ndence or impartiality is likely to be affected or
there are justifiable doubts about that expert's independence or impartiality. In this instance, the Panel
explained that it "carefully considered" the objec tions, "including the information given regarding

918Panel Report, US – Continued Suspension , para. 7.87; Panel Report, Canada – Continued
Suspension, para. 7.85.
919Panel Report, US – Continued Suspension , para. 7.87; Panel Report, Canada – Continued
Suspension, para. 7.85.
920Panel Report, US – Continued Suspension , para. 7.87; Panel Report, Canada – Continued
Suspension, para. 7.85. The Panel further commented that:
The Panel wishes to highlight the challenges it encountered in selecting
experts. There was a limited number of specialists suggested and actually
available in each of the fields on which the Panel needed assistance and
almost always one or more of the par ties objected to that specialist. For
example, only six of the identified ava ilable experts were deemed to have
extensive expertise in risk analysis. A ll of these experts were objected to by
at least one party.
(Panel Report, US – Continued Suspension , footnote 382 to para. 7.87; Panel Report, Canada – Continued
Suspension, footnote 374 to para. 7.85)

potential conflicts of interest", before concluding that the objections were "not justified".
922
Moreover, the Panel provided specific explanations as to why it disagreed with the objections of the
European Communities.923
455. On appeal, the European Communities recognizes th at Dr. Boisseau's statement in the French
Senate did not refer to the use of the hormon es for growth-promotion purposes. The European
Communities does not provide argumentation explaining why Dr. Boisseau's statement concerning the
use of the hormones for therapeutic purposes signifies that he would not be impartial in his views
concerning the use of these hormones for growth -promotion purposes. The European Communities
itself regulates the use of the hormones at issue for veterinary purposes differently from the use for
growth-promotion purposes in Directive 2003/74/EC. 924 In addition, we do not consider that in this
case the information about Dr. Boobis' links to certain pharmaceutical companies provided an
objective basis to conclude that there were justif iable doubts as to his impartiality or independence.
The European Communities did not present evidence indicating that the companies from which Dr.
Boobis received funding had links with other comp anies producing veterinary drugs or the hormones
at issue. Thus, we consider that the Panel did not exceed its authority in dismissing the European
Communities' objections relating to disclosure statements given by Drs. Boisseau and Boobis
pursuant to the Rules of Conduct and paragraph 4 of the Experts Working Procedures adopted by the
Panel.
(c) Previous Affiliation with JECFA
456. The European Communities claims that the reas ons provided by the Panel for declining to
exclude Drs. Boisseau and Boobis never addressed the fundamental question of their affiliation with
JECFA. In the view of the European Commun ities, the Panel disregarded its "most important
objection"925 that an expert who has participated in the drafting of JECFA reports cannot be
independent and impartial because, in this case, the experts were being asked to evaluate new
scientific evidence underlying reports that were direc tly critical of, or in conflict with, their prior
contribution to the JECFA reports. The European Communities argues that as "authors of the JECFA
reports"926, Drs. Boisseau and Boobis "cannot be consider ed to be independent and impartial in these

922Panel Report, US – Continued Suspension , para. 7.87; Panel Report, Canada – Continued
Suspension, para. 7.85.
923Ibid.
924Directive 2003/74/EC states that "the use of cer tain of the [hormones at issue], where this is
necessary, for therapeutic purposes or zootechnical treatment may continue to be authorised as it is not likely to
constitute a hazard for public health owing to the nature and the limited duration of the treatments, the limited
quantities administered and the strict conditions laid down in Directive 96/22/EC in order to prevent any
possible misuse." (Directive 2003/74/EC, Recital 11)
926Ibid., para. 205.

circumstances, because this would amount to asking th em to review and criticise reports that are their
own doing".927
457. JECFA, which is administered jointly by the FAO and the WHO, is "an international expert
scientific committee" that evaluates the safety of food additives, contaminants, naturally-occurring
toxicants and residues of veterinary drugs in food.928 JECFA "performs risk assessments and provides
advice to FAO, WHO and the member countries of both organizations". 929 Some countries use
information from JECFA in their national food safety control programmes. 930 Requests for scientific
advice "are in general channelled through the Codex Alimentarius Commission (Codex)". 931 Codex
also adopts international standards b ased on evaluations performed by JECFA. 932 Codex has adopted
international standards for five of the hormones at issue in this case, that is, oestradiol-17 β,
testosterone, progesterone, trenbolone acetate, and zeranol, on the basis of evaluation performed by
JECFA.933 In addition, Codex has initiated a standard -setting process for MGA, also on the basis of
JECFA's evaluation, but this process has not yet concluded.934
458. The risk assessments performed by JECFA in relation to oestradiol-17 β, testosterone,
progesterone, trenbolone acetate, and zeranol lie at th e centre of the dispute between the participants
in this case. In the case of oestradiol-17 β, the European Communities argued that "the Codex
approach has serious limitations in non-linear situa tions, such as with regard to these hormones", and
explained that "currently available Codex guidance poorly addresses cases such as this where the risks
are embedded in changes in exposure to biologi cally active molecules which may, with minute
differences in their bioavailability, have dramatic effects, such as turning on or off complete
developmental programmes of the human geno me, or inducing pathological conditions." 935 T h e
European Communities also argued that JECFA' s evaluation was based on "outdated" data. 936 As for
the four hormones that are subject to the provision al ban and for which there is an international

928Panel Report, US – Continued Suspension , footnote 377 to para. 7.78; Panel Report, Canada –
929Ibid.
930Ibid.
931Ibid.
932Ibid.
933Codex Alimentarius Commission, Maximum Residue Limits for Veterinary Drugs in Foods , updated
as at the 29 th Session of the Codex Alimentarius Commission (July 2006), CAC/MRL 2 (Exhibit CDA-22
submitted by Canada to the Panel in Canada – Continued Suspension).
934See Panel Report, US – Continued Suspension , para. 7.813; Panel Report, Canada – Continued
Suspension, para. 7.799.
935Panel Report, US – Continued Suspension , para. 7.458; Panel Report, Canada – Continued
Suspension, para. 7.446 (referring to reply of the European Communities to Question 24 posed by the Panel,
936Panel Report, US – Continued Suspension , para. 7.423; Panel Report, Canada – Continued
Suspension, para. 7.414.

standard, the European Communities asserted that the conclusions reached by JECFA in 1988
and 1999 are "no longer valid".
937 As regards MGA, which is also subject to the provisional ban, the
European Communities notes that "nearly all the studies" referred to in the 2000 JECFA report
evaluating MGA "date from the 1960s and 1970s". 938 The European Communities considered
JECFA's assessment of these hormones to be "insufficient" 939 for purposes of conducting a risk
assessment of the type required by the SPS Agreement , in light of the fact that the European
Communities had decided to adopt a higher level of protection than that underlying JECFA's
international standards. 940 In these circumstances, the Panel should have closely scrutinized any
institutional links the experts may have had with JECFA and objectively determined whether those
links were likely to affect or give rise to ju stifiable doubts as to the experts' independence or
impartiality.
459. Both Drs. Boisseau and Boobis had close institu tional links with JECFA. Dr. Boisseau was a
member of JECFA from 1987 to 2002.941 Dr. Boobis was a member from 1997 to 2006. Membership
of JECFA, in our view, reflects international recogniti on of the expertise of a particular scientist. The
Panel observed, in this regard, that JECFA is an "international, independent entity composed of highly
qualified experts selected by the WHO or FAO according to strict procedures". 942 We agree with the
Panel that Drs. Boisseau and Boobis are highly qualified scientists. We do not see the fact that
Drs. Boisseau and Boobis are qualified and know ledgeable—and thus experts—as giving rise to

937Panel Report, US – Continued Suspension , para. 4.226; Panel Report, Canada – Continued
Suspension, para. 4.217.
938Panel Report, US – Continued Suspension , para. 4.233; Panel Report, Canada – Continued
Suspension, para. 4.221.
939Panel Report, US – Continued Suspension , para. 4.234; Panel Report, Canada – Continued
Suspension, para. 4.222.
 940By contrast, as we explain in sec tion VII.E, the Panel considered that the existence of international
standards (or, in the case of MGA, of an advanced proc ess that could eventually l ead to the adoption of an
international standard) established a presumption that there was sufficient scientific evidence to conduct a risk
assessment. The Panel explained its view as follows:
The presumption of consistency of m easures conforming to international
standards, guidelines and recommendations with the relevant provisions of
the SPS Agreement implies that these standards, guidelines or
recommendations, particularly those referred to in this case, are based on
risk assessments that meet the requirements of the SPS Agreement. This
means, therefore, that there was suffi cient evidence for JECFA to undertake
the appropriate risk assessments.
(Panel Report, US – Continued Suspension , para. 7.644; Panel Report, Canada – Continued Suspension ,
para. 7.622) (footnote omitted)
941Dr. Boisseau's curriculum vitae indicates that he was a member of JECFA from 1988-2001.
However, he is listed as a member in JECFA's 32 nd Report, which corresponds to a session held in Rome
on 15-23 June 1987, and also in JECFA's 58 th Report, which corresponds to a session held in Rome
on 21-27 February 2002. (See Exhibit US-25 submitted by the United States to the Panel; and Exhibits
CDA-29 and CDA-34 submitted by Canada to the Panel)
942Panel Report, US – Continued Suspension , para. 6.62; Panel Report, Canada – Continued
Suspension, para. 6.57.

concerns about their impartiality and independence. On the contra ry, we would expect a person who
is regarded as an expert to hold views, and even ve ry strong views, on his or her particular area of
expertise. However, we agree with the European Communities that the qualifications and relevant
knowledge of Drs. Boisseau and Boobis are not by themselves sufficient guarantees of their
independence and impartiality.943 An expert could be very qualified and knowledgeable and yet his or
her appointment could give rise to concerns about his or her impartiality or independence, because of
that expert's institutional affiliation or for other reasons. Similarly, the fact that JECFA may select its
experts according to strict procedures does not in its elf ensure that these expe rts are independent and
impartial in respect of the issues that may arise in a WTO dispute.
460. Not only did Drs. Boisseau and Boobis participat e in JECFA, they were directly involved in
JECFA's evaluations of the six hormones at issue. Dr. Boisseau was a member of JECFA in 1987
when the Committee evaluated oestradiol-17 β, progesterone, testosterone, trenbolone acetate, and
zeranol.944 Both Drs. Boisseau and Boobis were memb ers of JECFA in 1999 when it again evaluated
oestradiol-17β, progesterone, and testosterone. During its 1999 session, JECFA adopted
recommended Acceptable Daily Intakes ("ADIs") for oestradiol-17 β, testosterone, and
progesterone.945 The report of the 1999 session lists Dr. Boisseau as the Chairman and Dr. Boobis as
one of two Joint Rapporteurs. Drs. Boisseau and Bo obis also participated in the evaluation of MGA
in 2000. 946 On this occasion, the relevant JECFA re port lists Dr. Boisseau as Vice-Chairman and
Dr. Boobis as a Joint Rapporteur. 947 Thus, Dr. Boisseau was a memb er of JECFA when it evaluated
all six hormones at issue in this dispute, while Dr. Boobis participated in the evaluation of four of the
six hormones. As Chairman, Vice-Chairman, and Jo int Rapporteur, they would be expected to have
played a significant role in the discussions.
461. Rather than being a source of concern, the Pa nel considered that Drs. Boisseau's and Boobis'
participation in JECFA would make them more useful as experts:

944JECFA, "Evaluation of Certain Drug Residues in Food", 32 nd Report, 1988 (Exhibit US-25
submitted by the United States to the Panel in US – Continued Suspension).
945JECFA, "Evaluation of Certain Drug Residues in Food", 52 nd Report, 2000. The Committee did not
specify MRLs for these three hormones because it found that "available data on the identity and concentration of
residues of the veterinary drug in animal tissues indicat e a wide margin of safety for consumption of residues in
food when the drug is used according to good practice in the use of vete rinary drugs". Thus, the Committee
"concluded that the presence of drug residues in the named animal product does not present a health concern and
that there is no need to spec ify a numerical MRL". (JECFA, 52 nd Report, p. 101, footnote 1 (Exhibit US-5
submitted by the United States to the Panel in US – Continued Suspension))
946Dr. Boobis also participated in the evaluation of MGA in 2004 (JECFA, "Evaluation of Certain Drug
Residues in Food", 62 nd Report, 2004 (Exhibit CDA-20 submitted by Canada to the Panel in Canada –
Continued Suspension)).
947JECFA, "Evaluation of Certain Drug Residues in Food", 54th Report, 2001 (Exhibit US-24 submitted
by the United States to the Panel in US – Continued Suspension).

The Panel chose not to exclude a priori experts who had
participated in the preparation and drafting of JECFA's risk
assessments because this would deprive the Panel and the parties of
the benefit of the contribution of internationally recognized
specialists and because the Panel was of the opinion that experts
familiar with the JECFA reports would be well-placed to assist the
Panel in understanding the work of JECFA extensively referred to by
the parties in their submissions, in particular by the European
Communities.
948
462. The Panel also observed that "since JECFA's risk assessments were used as the reference risk
assessments for purposes of the analysis under Article 5.7 of the SPS Agreement, it was necessary for
the Panel to be able to rely on the advice of e xperts intimately knowledgeable about the substance of
JECFA's risk assessments."949 We are not persuaded by the Panel's reasoning. It is precisely because
JECFA's risk assessments have such a prominent ro le in this dispute that the Panel should have
exercised particular caution before appointing persons with institutiona l links to JECFA as experts.
The Panel gave the experts wide latitude in terms of their examination of the evidence and the advice
they provided. Given how the Panel framed its cons ultations with the experts, it would have been
very difficult for it to limit the scope of the a dvice it received from Drs. Boisseau and Boobis to the
"work of JECFA". In fact, our review of the panel record indicates that the Panel did not limit its
consultations with Drs. Boisseau and Boobis to the "work of JECFA". 950 For example, as regards the
European Communities' permanent ban on meat from cattle treated with oestradiol-17 β, the Panel
asked the experts (including Drs. Boisseau and Boobis):
To what extent, in your view, does the [European Communities'] risk
assessment identify the potential for adverse effects on human health,
including the carcinogenic or genotoxic potential, of the residues of
oestradiol-17β found in meat derived from cattle to which this
hormone had been administered for growth promotion purposes in
accordance with good veterinary prac tice? To what extent does the
[European Communities'] risk assessment evaluate the potential
occurrence of these adverse effects?
951

948Panel Report, US – Continued Suspension , para. 7.85; Panel Report, Canada – Continued
Suspension, para. 7.83. (footnote omitted)
949Panel Report, US – Continued Suspension , para. 6.62; Panel Report, Canada – Continued
Suspension, para. 6.57.
950The Panel posed 62 written questions to the six scien tific experts. Dr. Boisseau provided responses
to 59 questions and Dr. Boobis replied to 45. These stand in sharp contrast to the other experts who provided
responses to far fewer questions. Dr. Brabander replied to 17 questions, Dr. Cogliano answered 12 questions,
Dr. Guttenplan responded to 31 questions, and Dr. Sippel gave responses to 4 questions. (See Panel record
document, Statistics on Replies of the Scientific Experts) We do not mean to suggest that it is problematic for an
expert to answer too many questions. We refer to thes e numbers merely to illustrate the breadth of the advice
provided by Drs. Boisseau and Boobis in this case.
951Panel Reports, Annex D, p. D-22, Question 13.

463. This question goes directly to the adequacy of the European Commun ities' risk assessment
and does not concern JECFA's work. Both Drs. Bo isseau and Boobis responde d to this question and
their responses were relied on by the Panel in its analysis:
Dr. Boisseau concluded that the European Communities did not
demonstrate that a potential for adverse effects on human health
arises from the consumption of meat from cattle treated with any of
the six hormones in dispute for growth promotion purposes.
952
Dr. Boobis stated that, in his view, none of the information provided
by the European Communities demonstrates the potential for adverse
effects in humans of any of the six hormones in meat from cattle in
which they are used for growth promotion purposes at the levels to
which those consuming such meat would be exposed. The studies on
genotoxicity provide no convincing evidence of potential for harm in
consumers. The carcinogenic effects observed are entirely consistent
with a hormonal mode of action that exhibits a threshold that would
be well above the intake arising from consumption of meat from
treated cattle.
953
In their replies, Drs. Boisseau and Boobis direct ly evaluated the appropriateness of the European
Communities' risk assessment.
464. The Panel also asked the experts whether the European Communitie s' risk assessment
examined the risks arising specifically from the cons umption of meat from cattle treated with the six
hormones at issue:
Do the risk assessment of the Eu ropean Communities or any other
scientific materials referred to by the European Communities
demonstrate that a potential for adverse effects on human health
arises from the consumption of meat from cattle treated with any of
the six hormones in dispute for growth-promotion purposes? If yes,
why? If not, what kind of evidence would be required to demonstrate
such potential adverse effects? Would your response have been
different at the time of a doption of the Directive in
September 2003?
954
465. The question concerns the specificity require ment discussed by the Appellate Body in EC –
Hormones.955 Drs. Boisseau and Boobis both volunteered responses, and the Panel again relied on

952Panel Report, US – Continued Suspension , para. 7.526; Panel Report, Canada – Continued
Suspension, para. 7.498 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 406).
953Panel Report, US – Continued Suspension , para. 7.527; Panel Report, Canada – Continued
Suspension, para. 7.499 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 408).
954Panel Reports, Annex D, p. D-84, Question 52.

both of their replies in its examina tion of the consistency with the SPS Agreement of the European
Communities' risk assessment. The Panel summarizes the response of Dr. Boisseau as follows:
Dr. Boisseau concluded that the European Communities did not
demonstrate that a potential for adverse effects on human health
arises from the consumption of meat from cattle treated with any of
the six hormones in dispute for growth promotion purposes.
Additionally, Dr. Boisseau stated that the kind of evidence required
to demonstrate such potential adverse effects should be (a)
toxicological data indicating that the values of the ADIs established
by JECFA are not conservative enough, and (b) data on residues in
treated/non-treated cattle and on daily production of hormones in
sensitive individuals [such as pre-pubertal children] indicating that
the hormonal residue intake associated with the consumption of meat
from treated cattle is such that the established ADIs would be
exceeded in the case of use of growth promoters.
956
466. This excerpt is a good illustration of the problem s arising from Drs. Boisseau's and Boobis'
involvement with JECFA's evaluation of the hormon es at issue in this dispute. Dr. Boisseau's
response shows that he considered JECFA and, in particular, its approach of using ADIs, as the
benchmark against which to evaluate the European Communities' risk assessment.957
467. Another illustration of this problem can be seen in Dr. Boisseau's response to the Panel's
question regarding whether the scientific evidence in the SCVPH Opinions supported the conclusion
that the carcinogenic effects of th e hormones at issue are related to a mechanism other than hormonal
activity.958 For each of the hormones at issue, except for oestradiol-17 β (in respect of which he
referred to an earlier response), Dr. Boisseau comp ared the European Comm unities' risk assessment
with JECFA's conclusions. For example, Dr. Bois seau gave the following response in relation to
progesterone:
In its thirty second session, JE CFA concluded that "Although
equivocal results have been repor ted for the induction of single-
strand DNA breaks and DNA adducts have been seen in vivo and in
vitro in some studies, progesterone was not mutagenic …
progesterone has no genotoxic potential". It concluded also that
"these effects on tumour production occurred only with doses of
progesterone causing obvious hormona l effects … th e effects of
progesterone on tumour production was directly related to its
hormonal activity".

956Panel Report, US – Continued Suspension , para. 7.526; Panel Report, Canada – Continued
Suspension, para. 7.498 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 406).
957This excerpt also shows th at there is a problem in the standard applied by the Panel to review the
European Communities' risk assessment. We discuss this in section VII.E of this Report.
958Panel Reports, Annex D, p. D-27, Question 16.

In its 1999 report, SCVPH concluded, about the carcinogenicity of
progesterone, that "At present, the data are insufficient to make any
quantitative estimate of the risk arising from the exposure to residues
in meat"[.] Therefore, the scientific evidence relied upon in the
SCVPH Opinions does not support the conclusion that the
carcinogenic effects of progesterone are related to a mechanism other
than hormonal activity.
959
The response in relation to testosterone is similar:
In its thirty second session, JECFA concluded that the increase of the
incidence of prostactic and uter ine tumours observed in rodents
treated with high doses of testosterone ["]resulted from the hormonal
activity of testosterone". In its fifty second session held in 1999,
JECFA concluded that "In mammalian cells, no chromosomal
aberrations, mutations or DNA adducts were found following
treatment with testosterone … testosterone has no genotoxic
potential".
In its 1999 report, SCVPH concluded, about the carcinogenicity of
testosterone, that, given the lim ited data on genotoxicity and on
carcinogenicity in humans, no conc lusive quantitative estimate of the
risk arising from the excess intake with meat from treated animals
can be made. Therefore, the scientific evidence relied upon in the
SCVPH Opinions does not support the conclusion that the
carcinogenic effects of testosterone are related to a mechanism other
than hormonal activity.
960
Both of these responses are cited in the Panel's reasoning. 961 Dr. Boisseau also drew a comparison
with JECFA at the end of his response, when he summarized his views as follows:
[C]onsidering the conclusions of JECFA and the fact that SCVPH
bases always its reservations on the lack of data more than on data
establishing the genotoxicity and the capacity of the five other
hormones (progesterone, testoster one, melengestrol, trenbolone and
zeranol) to act as complete carcinogens, it can be said that the
scientific evidence relied upon in the SCVPH Opinions does not
support the conclusion that the carcinogenic effects of these five
hormones are related to a mechanism other than hormonal activity.
962
468. A similar problem can be seen as regards the question of the sufficiency of the evidence under
Article 5.7 of the SPS Agreement. At the meeting with the Panel and the parties, the United States
asked the experts whether they considered that the scientific evidence re lied on by the European

959Panel Reports, Annex D, paras. 157 and 158.
960Ibid., paras. 159 and 160.
footnote 865 thereto, and para. 7.752 and footnote 878 thereto; Panel Report, Canada – Continued Suspension,
thereto.
962Panel Reports, Annex D, para. 167.

Communities in the SCVPH Opinions supported the c onclusion that it is not possible to complete a
risk assessment for the five hormones that are the subject of the provisional ban.
963 Dr. Boobis
referred to his experience in JECFA, replying:
I cannot speak for the [European Communities], and I think what has
just been said is quite correct. I can speak for JECFA in which I
participated, and in our view we had enough information to complete
a risk assessment. I don't know if that is helpful, but that was the
situation when we looked at the available data on those five other
hormones.
964
469. The European Communities, however, based mu ch of its case before the Panel on the
limitations of JECFA's approach. Given that in its own risk assessment the European Communities
called into question the validity of JECFA's risk as sessments, it was improper for the Panel to have
asked Drs. Boisseau and Boobis, who participated di rectly in JECFA's evaluations, to evaluate the
European Communities' risk assessme nt. The natural inclination of someone placed in that situation
would be to compare the risk assessments, rather than to assess whether the science relied upon by the
European Communities can support the conclusions it reached, and to favour or defend JECFA's
approach. The manner in which the Panel used th ese experts does not ensure impartiality and cannot
be said to ensure fairness in the consultations with the experts. Such a result is not compatible with
the due process obligations that are inherent in the WTO dispute settlement system.
470. Canada argues that it is "incorrect to portr ay" the participation in JECFA panels by
Drs. Boisseau and Boobis as "giving them an (alm ost proprietary) interest in the outcome of the
JECFA process that they would have felt compelled to defend". 965 Canada maintains that the JECFA
process "is a diffuse one, in which a number of scientists participate" and is "aimed at reaching a
consensus out of what may initially be a variety of scientific views".
966 Therefore, Canada argues,
"the process is very different from scientific conclu sions arrived at by one individual's scientific
efforts that are published under his or her name" 967, and Drs. Boisseau and Boobis were no more
responsible for authoring the JECFA reports than was any other "expert participating in a JECFA
meeting and subscribing to a resulting report [which ] might be considered part of the collective
authorship of the scientists involved." 968 At the oral hearing, Canada additionally noted that, at
JECFA meetings, the experts reviewed previously prepared monographs that, in this case, did not
contain the input of Drs. Boisseau and Boobis.

963Panel Reports, Annex G, para. 770.
964Ibid., para. 774.
966Ibid.
967Ibid.
968Ibid., para. 52.

471. The Panel also reasoned that Drs. Boisseau and Boobis may have contributed to the
development of JECFA reports, but the nature of th eir participation ensured that they could remain
independent and impartial. In response to objections from the European Communities during the
interim review, the Panel explained:
Moreover, JECFA reaches its conclu sions by consensus. So the
opinions expressed by the two experts were given with regard to the
consensual view of JECFA on this matter, not just their own personal
positions in the past. This does not mean, however, that JECFA's
work is these particular experts' own work: it is a joint work by
several experts.
969
472. We recognize that JECFA involves a decisi on-making process based on consensus and that
the outcome of the process need not necessarily re flect the views of its individual members.
However, the fact that this process involves several individuals and that the outcome may be the result
of a compromise does not mean that the joint out come of the process can be disconnected from the
experts that participated in the process. 970 On the contrary, one would expect that the views of the
experts that participated in the process would be reflected, in various degrees, in the outcome. As
noted earlier, Drs. Boisseau's and Boobis' participat ion was not indirect or marginal. Rather, both
would be expected to have had particular infl uence in the process given their respective roles as
Chairman and Vice-Chairman, and Joint Rapporteur. Moreover, irrespective of their degree of
influence in the process, both would be expected to have a natural inclina tion to identify with
JECFA's evaluation as participants in the consensus. Therefore, we do not consider that the fact that
JECFA reaches its conclusions by consensus dispels our concerns regarding the propriety of the Panel
asking Drs. Boisseau and Boobis to evaluate the European Communities' risk assessment.

969Panel Report, US – Continued Suspension , para. 6.62; Panel Report, Canada – Continued
Suspension, para. 6.57.
970In the meeting with the Panel and the parties, Dr . Boobis suggested that JECFA had been operating
since 1997 on the basis of unanimity. Dr. Boobis' description of JECFA decision-making does not support
Canada's argument that JECFA reports may not necessarily reflect the views of Drs. Boisseau and Boobis.
Dr. Boobis explained:
The JECFA Committee—at least as far back as 1997—have been able to
reach an agreed position on all the ques tions before them. In the event that
there was a disagreement, there would be two possible options – one would
be not to proceed further and seek further evidence, and the other would be,
as has been indicated already by the s ecretariat, if the majority was of one
view and a minority was of another view, to issue a so-called minority
opinion or minority report as well, which reflects a contrary view on the
interpretation of the data. As I said earlier, this has not happened, there was
unanimity. Generally what happens is that there is a discussion, there may
be varying interpretations of a dataset, the experts get together over the
period of a meeting and explore the various possibilities, bringing new
information, or new insights and reach a common position, and that has
worked generally very successfully in the evaluation of the compounds over
the last 10 years I have been involved in JECFA.

473. The United States emphasizes the fact that the Panel consulted with the parties when it
adopted the Experts Working Procedures and in the expert selection process.
971 We agree with the
United States that consultation with the parties in the adoption of working procedures for selecting the
experts and in the expert selection process is a mean s for ensuring that the parties' due process rights
are respected. However, as we explained earlier, the obligation to afford the protection of due process
to the parties is not circumscribed to the expert selection stage and does not end with the appointment
of the experts. Due process protection continues to apply throughout the consultations with the
experts. Thus, the fact that the Panel may have c onsulted with the parties in this case when preparing
the Experts Working Procedures and in selecting the experts does not provide a basis for concluding
that due process was also respected in the sub sequent stages of the proceedings, including the
consultations with the experts. Moreover, in the cons ultations that the Panel held with the parties, the
European Communities repeatedly objected to the selection of experts affiliated with JECFA.972
474. The Panel additionally expressed the view that Dr s. Boisseau and Boobis, by virtue of their
work as scientists, could be relied upon to be object ive in their assessment of critiques of their work,
as well as of new scientific evidence that might requi re altering the conclusions of their prior work.
During the interim review stage, the Panel res ponded to objections of the European Communities as
follows:
[S]cientists would readily admit that science is constantly evolving
and the fact that new studies are peer reviewed is evidence that
assessing new ideas and findings is part of scientific work. Assuming
that scientists may lack objectivity because they participated in the
preparation and drafting of JECFA's risk assessments on the
hormones at issue would call into question the whole principle of
peer review.
973
475. The Panel added:
The experts that the European Co mmunities claims were defending
their work acknowledge that the st ate of knowledge can evolve. ...
The experts consulted by the Panel are used to considering and peer
reviewing studies that go beyond what they have published
themselves or perhaps even contradict them. In other words, they are
not likely to feel any need to defe nd their own previous work results

972Panel Report, US – Continued Suspension , para. 7.79; Panel Report, Canada – Continued
Suspension, para. 7.77 (referring to the European Communities' comments on the proposed experts of
16 January 2006).
973Panel Report, US – Continued Suspension , para. 6.22; Panel Report, Canada – Continued
Suspension, para. 6.21.

in the light of new, convincing evidence or techniques that put such
previous work into doubt.
974
476. The European Communities argues that the principle of peer review is not found in any of the
WTO agreements, and that scientific journals "re quire that new work submitted for publication must
not be given for review by the same persons whose theories the submitted articles contest". 975 The
key question, the European Communities maintains, is "whether an expert that has been the author of
a given report is impartial and independent to act as a 'peer' in 'reviewing' reports that explicitly
criticise the report where the 'peer' is a co-author."976
477. We recognize that scientists will often be asked to review studies performed by other
scientists and that the scientific community must cons tantly reassess theories in the light of scientific
progress. However, as we pointed out above, the Panel did not simply ask Drs. Boisseau and Boobis
about JECFA's work and risk assessments. In th e consultations with experts, the Panel asked
Drs. Boisseau and Boobis to evaluate the Europ ean Communities' risk assessment and they did so
using JECFA's evaluations as a benchmark. This is problematic in this case because the European
Communities' risk assessment called into question th e validity of JECFA's evaluations and explicitly
stated that it would not follow them. In the light of this, it was improper for the Panel to consult with
Drs. Boisseau and Boobis, who were directly involv ed in JECFA's evaluations. The concerns raised
in this situation are not addressed by the fact that scientists regularly conduct "peer reviews" or may
recognize that science evolves. Nor are the conc erns addressed by the Panel's explanation that
JECFA's work is linked to Codex, which is expressly recognized by the SPS Agreement as having
responsibilities for the "establishment of international standards, guidelines and recommendations".977
478. The Panel also referred to the presumption of consistency that applies to SPS measures based
on international standards under Articles 3.1 and 3.2 of the SPS Agreement as an additional
justification for its appointment of Drs. Boisseau and Boobis because of their involvement in the risk
assessments underlying the international standards at issue in this case. However, we fail to see why
the appointment of such experts would be justified in a case such as this one where the WTO Member
adopts a higher level of protection than that refl ected in the international standards, pursuant to
Article 3.3. The Panel's view that it is consistent with JECFA's role in setting international standards
"for the Panel to rely on experts who contributed in the preparation and drafting of JECFA's risk

974Panel Report, US – Continued Suspension, paras. 6.62 and 6.63; Panel Report, Canada – Continued
Suspension, paras. 6.57 and 6.58.
976Ibid.
977Panel Report, US – Continued Suspension , para. 6.22; Panel Report, Canada – Continued
Suspension, para. 6.21.

assessments on the substances at issue"
978 rather confirms our impression that the Panel improperly
relied on Drs. Boisseau and Boobis to evaluate th e European Communities' risk assessment against
the evaluations conducted by JECFA.979
479. Accordingly, we consider that it was imprope r for the Panel to consult Drs. Boisseau and
Boobis. We reiterate that our concerns do not relate to the qualifications of Drs. Boisseau and Boobis,
who are highly recognized experts, nor do they relate to the fact that, as experts, they would have been
expected to hold views on issues in their area of e xpertise. Rather, our concerns arise from their
direct involvement in the risk assessments perform ed by JECFA for the hormones at issue in this
dispute and from the particular role that JECFA' s risk assessments, and the Codex standards adopted
on the basis of those risk assessments, ha d in this case. As we noted earlier 980, in its case before the
Panel, the European Communities argued that ther e were limitations in JECFA's evaluation of
oestradiol-17β and that the evidence relied upon by JECFA in the evaluation of the other five
hormones was outdated. The Panel, for its part, c onsidered that the existe nce of an international
standard established a presumption that the scientific evidence was not "insufficient" to perform a risk
assessment within the meaning of Article 5.7 of the SPS Agreement.981
480. We understand that panels often face practical difficulties in selecting experts who have the
required level of expertise and whose selection is not objected to by the parties. 982 We do not wish to
make the expert selection process more difficult than it may already be. However, experts consulted
by a panel can have a decisive role in a case, esp ecially when it involves highly complex scientific
questions such as this one. The Panel in this case said "the role of the experts was to act as an
'interface' between the scientific ev idence and the Panel, so as to allow it to perform its task as the
trier of fact."983 Experts appointed by a panel can significantly influence the decision-making process.
If a panel does not ensure that the requirements of independence and impartiality are respected in its

978Panel Report, US – Continued Suspension , para. 6.22; Panel Report, Canada – Continued
Suspension, para. 6.21.
979Panel Report, US – Continued Suspension , para. 6.63; Panel Report, Canada – Continued
Suspension, para. 6.58.
980See supra, para. 458.
981See supra, para. 940.
982The Panel described some of the difficulties it encountered in this case:
The Panel wishes to highlight the challenges it encountered in selecting
experts. There was a limited number of specialists suggested and actually
available in each of the fields on which the Panel needed assistance and
almost always one or more of the par ties objected to that specialist. For
example, only six of the identified ava ilable experts were deemed to have
extensive expertise in risk analysis. A ll of these experts were objected to by
at least one party.
(Panel Report, US – Continued Suspension , footnote 382 to para. 7.87; Panel Report, Canada – Continued
Suspension, footnote 374 to para. 7.85)
983Panel Report, US – Continued Suspension , para. 6.72; Panel Report, Canada – Continued
Suspension, para. 6.67.)

consultations with the experts, this can comp romise the fairness of the proceedings and the
impartiality of the decision-making. In these circum stances, the practical difficulties that a panel may
encounter in selecting experts cannot displace the n eed to ensure that the consultations with the
experts respect the parties' due process rights.
481. For these reasons, we consider that there was an objective basis to conclude that the
institutional affiliation with JECFA of Drs. Boissea u and Boobis, and their participation in JECFA's
evaluations of the six hormones at issue, was likely to affect or give rise to justifiable doubts as to
their independence or impartiality given that the ev aluations conducted by JECFA lie at the heart of
the controversy between the parties. The appoint ment and consultations with Drs. Boisseau and
Boobis compromised the adjudicative independence and impartiality of the Panel. Therefore, we find
that the Panel infringed the European Communities' due process rights as a result of the Panel having
consulted with Drs. Boisseau and Boobis as scientific experts.
482. Because the appointment and consultations with Drs. Boisseau and Boobis compromised the
Panel's ability to act as an independent adjudicat or, the Panel cannot be said to have made "an
objective assessment of the matter" as required by Article 11 of the DSU. We recall that, in US –
Gambling, the Appellate Body held that "as part of their duties, under Article 11 of the DSU, to 'make
an objective assessment of the matter' before them, panels must ensure that the due process rights of
parties to a dispute are respected." 984 Consequently, we find that the Panel failed to comply with its
duties under Article 11 of the DSU, as a result of the appointment and consultations with
Drs. Boisseau and Boobis in the circumstances of this case.
483. The European Communities argues that, if we were to find that the Panel erred in relying on
the advice of Drs. Boisseau and Boobis, we would ha ve to reverse all of the Panel's findings under the
SPS Agreement.985 At the oral hearing, the United States and Canada disagreed that this would be the
necessary consequence of our making the finding requested by the European Communities.
484. Where a panel's ability to act as an independe nt adjudicator has been compromised, as we
have found in this case, this raises serious issues as to whether the panel's findings may be sustained.
We recall, moreover, that Drs. Boisseau and Boobi s provided responses to the majority of questions
posed by the Panel and the Panel relied extens ively on their responses in its assessment of the
consistency of Directive 2003/74/EC with Articles 5.1 and 5.7 of the SPS Agreement.986 Thus, the
Panel's findings on Articles 5.1 and 5.7 of the SPS Agreement would be difficult to sustain upon

985European Communities' appellant's submission, paras. 181, 182, and 212.
986See supra, footnote 950.

exclusion of the testimony of Drs. Boisseau and Boobis, assuming that disentangling their testimony
from the other elements of the Panel's analysis was possible. Although our finding on this issue
could, by itself, lead to the invalidation of th e Panel's findings under Ar ticles 5.1 and 5.7 of the SPS
Agreement, we nevertheless proceed to examine the other claims of error raised by the European
Communities in respect of the Panel's assessment of the consistency of Directive 2003/74/EC with the
SPS Agreement. The significance to the Panel's analysis of the testimony of Drs. Boisseau and Boobis
will become more evident from our review of the Panel's findings under Articles 5.1 and 5.7 of the
SPS Agreement.
VI. The Consistency with Article 5.1 of the SPS Agreement of the European Communities'
Import Ban on Meat from Cattle Treated with Oestradiol-17 β for Growth-Promotion
Purposes
A. Introduction
485. We turn next to the European Communities' a ppeal of the Panel's finding that the permanent
ban on meat and meat products from cattle treated with oestradiol-17β for growth-promotion purposes
provided for in Directive 2003/74/EC does not meet the requirements of Article 5.1 of the SPS
Agreement. Section B provides a summary of the Eur opean Communities' risk assessment in relation
to oestradiol-17 β, which the European Communities conte nds brought it into compliance with the
recommendations and rulings of the DSB in EC – Hormones. This is followed by a summary of the
Panel's findings under Article 5.1 of the SPS Agreement in section C and of the claims and
arguments raised on appeal in section D. We then analyze in section E the specific issues raised by
the European Communities' appeal against the Panel's assessment of Directive 2003/74/EC under
Article 5.1 of the SPS Agreement. Finally, our conclusions are set out in section F.
486. We recall that the Panel found that the Europ ean Communities' claim under Article 23.1, read
together with Articles 22.8 and 3.7 of the DSU, was premised on the " conformity (presumed or actual)
with the SPS Agreement"
987 of Directive 2003/74/EC. This is because, in the Panel's view, the phrase
"until such time as the measure found to be inconsis tent ... has been removed" in Article 22.8 implies
that what is to be achieved is not the removal of the measure, but actual compliance with the DSB's
recommendations and rulings. 988 For this reason, the Panel considered that it had to address the
consistency of Directive 2003/74/EC with Articles 5.1 and 5.7 of the SPS Agreement.

987Panel Report, US – Continued Suspension , para. 7.272; Panel Report, Canada – Continued
Suspension, para. 7.288. (original emphasis)
988Panel Report, US – Continued Suspension , para. 7.284; Panel Report, Canada – Continued
Suspension, para. 7.300.

B. The European Communities' Risk Assessmen t for Meat from Cattle Treated with
Oestradiol-17β
487. We recall that, in EC – Hormones, the European Communities' import ban on meat and meat
products from cattle treated with six hormones—oestradiol-17 β, testosterone, progesterone,
trenbolone acetate, zeranol, and MG A—was found to be in consistent with Article 5.1 of the SPS
Agreement. The Appellate Body found that the scien tific studies submitted by the European
Communities in that dispute were not "sufficiently specific to the case at hand" 989, because they were
"general studies which do indeed show the existence of a general risk of cancer; but they do not focus
on and do not address the particular kind of risk here at stake—the carcinogenic or genotoxic potential
of the residues of those hormones found in meat de rived from cattle to which the hormones had been
administered for growth promotion purposes." 990 For this reason, the Appellate Body concluded that
"no risk assessment that reasonably support[ed] or warrant[ed] the import prohibition embodied in the
[European Communities'] Directives was furnished to the Panel" 991, and accordingly found that the
European Communities' import ban, imposed under Directive 96/22/EC, was not "based on" a risk
assessment within the meaning of Article 5.1.
488. Following the adoption by the DSB of the Panel and Appellate Body Reports in EC –
Hormones, the European Commission initiated and f unded 17 scientific studies to evaluate the
potential for adverse effects to human health from residues in bovine meat and meat products
resulting from the use of oestradiol-17 β, progesterone, testosterone, zeranol, trenbolone acetate, and
MGA in cattle for growth-promotion purposes. The results of these studies, as well as other publicly
available information and data co llected from international organizations such as Codex and JECFA
were reviewed by the SCVPH.992
489. On 30 April 1999, the SCVPH published an Opin ion entitled "Assessment of Potential Risks
to Human Health from Hormone Residues in Bovine Meat and Meat Products" 993 (the "1999
Opinion"). The 1999 Opinion found that "consump tion of beef from hormone-treated non-pregnant
cattle can result in excess exposure to oestrogens" 994 and that the "toxicological issues of concern"
arising from such excess exposure include "endocrine, developmental, immunological,

990Ibid.
991Ibid., para. 208.
992Panel Report, US – Continued Suspension , para. 2.3; Panel Report, Canada – Continued
Suspension, para. 2.3.
993See supra, footnote 20.
9941999 Opinion, p. 36.

neurobiological, immunotoxic, genotoxic and carcinogenic effects."
995 The 1999 Opinion reached the
following conclusions in relation to the potenti al risks to human health from residues of
oestradiol-17β in bovine meat:
- In summary, 17 β-oestradiol has genotoxic996 potential. Evidence is building
that oestrogens, most likely through oxidative metabolism to catechols and
beyond to semiquinones and quinones, are DNA reactive and mutagenic.997
- ... in consideration of the recent da ta on the formation of genotoxic
metabolites of oestradiol, suggesting that 17 β-oestradiol acts as complete
carcinogen, by exerting tumour initiating and promoting effects, it has to be
concluded, that no quantitative estimate of the risk related to residues in meat
could be presented.998
- These observations strongly suggest that environmental 17 β-oestradiol can,
even when administered at very low doses, modulate growth of children of
both sexes and decrease the age when final height is achieved and puberty is
reached.
999
- ... it is suggested that environmental 17 β-oestradiol could exert deleterious
effects on fertility in men and women, by acting through various, direct and
indirect, mechanisms.
1000
- ... at relatively high doses oestradiol does produce a number of adverse
effects on the immune system in humans e.g. allergy to topical oestradiol
(Boehnke and Gall, 1996). The above findings while indicating a possible
concern are insufficient to identify whether immune effects could occur in
consumers from the ingestion of m eat or meat products containing 17 β-
oestradiol residues.
1001

9951999 Opinion, p. 39.
996See supra, footnote 156.
9971999 Opinion, p. 41. Mutagenicity is the ability of a physical, chemical, or biological agent to
induce heritable changes (mutations) in the genetic material in a cell as a consequence of alterations or loss of
genes or chromosomes (or parts thereof). Panel Report, US – Continued Suspension , footnote 673 to
para. 7.549; Panel Report, Canada – Continued Suspension, footnote 623 to para. 7.517 (referring to replies of
the experts to Question 2 posed by the Panel to the scientific experts, Panel Reports, Annex D, paras. 34
and 55).
9981999 Opinion, p. 43.
999Ibid.
1000Ibid., p. 44.
1001Ibid., p. 45.

490. The 1999 Opinion also reached the following co nclusions as to the relevant risks to human
health posed by the six hormones, and in particular by oestradiol-17β:
- As concerns excess intake of hormone residues and their metabolites, and in
view of the intrinsic properties of hormones and epidemiological findings, a
risk to the consumer has been identifie d with different leve ls of conclusive
evidence for the [six] hormones in question.
- In the case of oestradiol-17 β, there was a substantial body of recent evidence
suggesting that it had to be considered as a complete carcinogen, as it exerted
both tumour initiating and tumour promoting effects. The data available did
not, however, allow a quantitative estimate of the risk.

- For all six hormones endocrine, developmental, immunological,
neurobiological, immunotoxic, genotoxi c and carcinogenic effects could be
envisaged. Of the various susceptible risk groups, pre-pubertal children was
the group of greatest concern. Again the available data did not enable a
quantitative estimate of the risk.
- In view of the intrinsic properties of the hormones and in consideration of
epidemiological findings, no threshold leve ls could be defined for any of the
six substances.
1002
491. Subsequent to the adoption of the 1999 Opini on, additional scientific information was made
available to the European Commission, in the fo rm of a report by the Committee for Veterinary
Medicinal Products ("CVMP") of the European Un ion (a subcommittee of the European Medicines
Agency (EMEA)), and a report by the United Kingd om's Veterinary Products Committee sub-group
on the 1999 Opinion. At the request of the European Commission, the SCVPH examined this scientific
information and, on 3 May 2000, issued a review of its 1999 Opinion in which it declined to alter the
conclusions contained therein 1003 (the "2000 Opinion"). The SCVPH observed that "particularly in
regards to the subject of estrogen ic effects during [various stages of] development, there is no
compelling evidence suggesting that these effects do not also occur at low doses."1004 The 2000 Opinion
concluded that recent scientific information "did not provide convincing data and arguments demanding

1002Panel Report, US – Continued Suspension , para. 7.391; Panel Report, Canada – Continued
1003See supra, footnote 21.
10042000 Opinion, p. 2.

revision of the conclusions drawn in the [1999 Opin ion] on the potential risks to human health from
hormone residues in bovine meat and meat products".
1005
492. On 10 April 2002, a second review of the 1999 Opinion was issued by the SCVPH 1006 (the
"2002 Opinion"), on the basis of scientific data co llected since the previous review. The scientific
data reviewed by the SCVPH included the final results of all 17 studies that had been commissioned
by the European Commission, as well as scientific da ta from relevant internat ional organizations and
other sources. The SCVPH considered that the data from the 17 scientific studies and recent scientific
literature confirmed the validity of the 1999 Opinion, as reviewed in 2000, and that no amendments to
those Opinions were justified.
1007 The 2002 Opinion also drew the following conclusions about the
potential health risks posed by residues of oestradiol-17β in meat:
- Ultra-sensitive methods to detect residues of hormones in animal tissues have become
available, but need further validation.
- Studies on the metabolism of oestradiol-17β in bovine species indicated the formation
of lipoidal esters, disposed particularly in body fat. These lipoidal esters showed a
high oral bioavailability 1008 in rodent experiments. Thus, the consequence of their
consumption needed to be considered in a risk assessment.
- Experiments with heifers, one of the ma jor target animal gr oups for the use of
hormones, indicated a dose-dependent increas e in residue levels of all hormones,
particularly at the implantation sites. Misplaced implants and repeated implanting,
which seemed to occur frequently, represen ted a considerable risk that highly
contaminated meats could enter the food chain. ...
- Convincing data had been published c onfirming the mutagenic and genotoxic
potential of oestradiol-17 β as a consequence of metabolic activation to reactive
quinones. In vitro1009 experiments indicated that oestrogenic compounds might alter
the expression of an array of genes. Cons idering that endogenous oestrogens also

1005Panel Report, US – Continued Suspension , para. 7.392; Panel Report, Canada – Continued
1006See supra, footnote 22.
1007Panel Report, US – Continued Suspension , para. 7.394; and Panel Report, Canada – Continued
Suspension, para. 7.391 (referring to 2002 Opinion, pp. 21 and 22).
1008Bioavailability refers to the capacity of a substance to enter the general blood circulation and to
diffuse into the human or animal body, or the fraction of a dose of a substance that is available for systemic
circulation. See Panel Report, US – Continued Suspension , footnote 508 to para. 7.393; and Panel Report,
Canada – Continued Suspension , footnote 499 to para. 7.390 (referring to replies of the experts to Question 43
posed by the Panel to the scientific experts, Panel Reports, Annex D, paras. 344-357).
1009See supra, footnote 365.

exert these effects, the data highlighted the diverse biological effects of this class of
hormones.

- Epidemiological studies with opposite-sexed twins, suggest that the exposure of the
female co-twin in utero to hormones results in an increased birth weight and
consequently an increased adult breast cancer risk.1010
493. In light of the conclusions of the 1999, 2000 , and 2002 Opinions, the European Communities
adopted Directive 2003/74/EC on 22 September 2003 1011, which amended Directive 96/22/EC.
Directive 2003/74/EC provides for the permanent prohibition on the importation of meat and meat
products from animals treated with oestradiol-17 β for growth-promotion purposes, on the basis of the
SCVPH assessment that "recent evid ence suggests that [oestradiol-17 β] has to be considered as a
complete carcinogen, as it exerts both tumour-initi ating and tumour-promoting effects and that the
data currently available do not make it possibl e to give a quantitative estimate of the risk." 1012
Directive 2003/74/EC also provides for a provisional ban on meat and meat products from cattle
treated with progesterone, testosterone, zeranol , trenbolone acetate and MGA for growth-promoting
purposes.
494. Before the Panel, the European Communities argued that the 1999, 2000, and 2002 Opinions,
supported by the 17 studies conducted between 1998 a nd 2001, constitute the risk assessment upon
which Directive 2003/74/EC is based.1013
C. The Panel's Findings
495. As noted earlier in section IV of this Repor t, the European Communities has challenged in
these proceedings the continued application of the suspension of concessions by the United States and
Canada subsequent to the notification of Direc tive 2003/74/EC. The European Communities argued,
inter alia, that Article 22.8 of the DSU permits the a pplication of the suspension of concessions and
other obligations only until such time as the meas ure found to be inconsis tent with a covered
agreement has been removed, a condition that it clai ms was met with the adoption and notification of

1010Panel Report, US – Continued Suspension , para. 7.393; Panel Report, Canada – Continued
Suspension, para. 7.390.
1011See supra, footnote 5.
1012Panel Report, US – Continued Suspension , para. 7.395; Panel Report, Canada – Continued
Suspension, para. 7.392 (referring to Directive 2003/74/EC).
1013Panel Report, US – Continued Suspension , para. 7.389; Panel Report, Canada – Continued
Suspension, para. 7.386.

Directive 2003/74/EC.
1014 According to the European Comm unities, the United States and Canada
acted inconsistently with Article 23.1, read togeth er with Articles 22.8 and 3.7 of the DSU, by failing
to have recourse to, and abide by, the rules and procedures of the DSU subsequent to the adoption and
notification to the DSB of Directive 2003/74/EC.
496. The Panel observed that the European Communities' claim under Article 22.8 of the DSU was
premised on the European Communities' contenti on that Directive 2003/74/EC has brought its import
ban on meat and meat products from cattle treated with hormones for growth-promotion purposes into
compliance with the SPS Agreement. For this reason, the Panel considered that it had jurisdiction to
"address the compatibility" of Directive 2003/74/EC with the SPS Agreement to the extent necessary
to determine whether the "'measure found to be inconsistent' in the EC – Hormones case has been
removed".1015
497. Turning to the allocation of the burden of proof, the Panel observed, first, that it was
incumbent upon the European Communities as the complaining party to establish a prima facie case
of a violation of Article 22.8 of the DSU. The Panel found that the European Communities had met
this burden because of the presumption of good faith compliance that the Panel had previously found
to apply in relation to the Europ ean Communities' implementing measure.
1016 As a result, the burden
shifted to the responding parties. The Panel found that the United States and Canada had sufficiently
refuted, "in [their] first written submission[s] through positive evidence of breach of the SPS
Agreement"1017 the European Communities' allegation that its implementing measure complied with
the SPS Agreement. The Panel further stated that, "[i]n its subsequent submissions before the Panel,
the European Communities responded to the allegations of violation made by [the United States and
Canada]".1018 The Panel added that "[w]hile the presu mptions based on good faith enjoyed by each
party may have played a role in the burden of proof in the early stage of the Panel proceedings, it is
the opinion of the Panel that they eventually 'neu tralized' each other since each party also submitted
evidence in support of its allegations." 1019 The Panel ultimately concluded that "each party had to

1014We discuss the meaning of "removal" supra, section IV.D.
1015Panel Report, US – Continued Suspension , para. 7.375; Panel Report, Canada – Continued
Suspension, para. 7.372.
1016Panel Report, US – Continued Suspension , para. 7.385; Panel Report, Canada – Continued
Suspension, para. 7.382.
1017Ibid.
1018Ibid.
1019Panel Report, US – Continued Suspension , para. 7.386; Panel Report, Canada – Continued
Suspension, para. 7.383.

prove its specific allegations in response to evid ence submitted by the other party", and that it had
"weigh[ed] all the evidence before it"1020 in reaching its findings.
498. The Panel then explained that it needed to review Directive 2003/74/EC against: (a) the
recommendations and rulings of the DSB in the EC – Hormones case and (b) the provisions with
which the European Communities purports to comply as part of its claim of violation of Article 22.8
by the United States and Canada. 1021 The Panel acknowledged that in a case such as this it would be
difficult for the complainant to identify all the pot ential problems of incompatibility. At the same
time, the Panel recognized that, in this case, wh ere a finding of violation is conditional on the
compliance of a measure of the complainant with the WTO agreements, difficulties could arise if the
scope of review of that measure is defined only by the complainant. Indeed, the complainant could
limit the scope of the panel's review to provisions with which it believes that its measure is most
likely to be found compatible.1022 Under these circumstances, the Panel found it preferable, both from
a legal and a practical point of view, to consider all the allegations and arguments raised by each
party, as long as the other party had the opportunity to comment on those allegations and arguments.
Accordingly, the Panel sought to "circumscribe" the scope of its review under the SPS Agreement1023,
on the basis of the claims and arguments raised by each party, and determined that it would review, to
the extent necessary for assessi ng the European Communities' Article 22.8 claim, the
"compatibility"1024 of Directive 2003/74/EC with Articles 5.1, 5.2 1025, 5.7, and 3.3 of the SPS
Agreement.
499. The Panel next outlined the standard that it would apply in reviewing the compatibility of
Directive 2003/74/EC with those provisions. The Panel noted that the standard of review applicable
to legal and factual issues regarding measures reviewed under the SPS Agreement is found in
Article 11 of the DSU and explained that, as regard s the assessment of the facts, this standard has
been understood as requiring "neither de novo review as such, nor 'total deference', but rather the

1020Panel Report, US – Continued Suspension , para. 7.386; Panel Report, Canada – Continued
Suspension, para. 7.383.
1021Panel Report, US – Continued Suspension , para. 7.402; Panel Report, Canada – Continued
Suspension, para. 7.399.
1022Panel Report, US – Continued Suspension , para. 7.403; Panel Report, Canada – Continued
Suspension, para. 7.400.
1023Panel Report, US – Continued Suspension , para. 7.398; Panel Report, Canada – Continued
Suspension, para. 7.395.
1024Panel Report, US – Continued Suspension , para. 7.411; Panel Report, Canada – Continued
Suspension, para. 7.402.
1025Only the United States argued that Directive 2003/74/EC was inconsistent with Article 5.2 of the
SPS Agreement . Accordingly, the Panel Report in Canada – Continued Suspension does not address the
consistency of Directive 2003/74/EC with this provision.

'objective assessment of the facts'".
1026 According to the Panel, this corresponds to a duty to "consider
the evidence presented to us and to make factual findings on the basis of that evidence".1027 However,
the Panel retained the discretion to "decide which evidence [it chose] to utilise in making findings" 1028
and to decide "which [experts'] statements [were] us eful to refer to explicitly as long as [it did] not
deliberately disregard or distort evidence."1029
500. The Panel recalled that it had consulted six scien tific experts individually, "in order to obtain
a more complete picture both of mainstream scientific opinion and of any divergent views." 1030 The
Panel explained that, while it ge nerally followed the opinion of a majority of experts that had
expressed concurrent views on the scientific ques tions before it, sometimes divergences of views
rendered this approach impracticable. In these ci rcumstances, the Panel accepted the position(s) that
it considered most specific to the question at issue, or best supported by arguments and evidence. The
experts were also made aware of their role—which was, inter alia, to present scientific issues to the
members of the Panel in a way that could be unders tood by them—and of the role of the Panel in the
WTO dispute settlement system—which includes being the trier of facts. In assessing the scientific
advice received from the experts, the Panel said it fu lly took into account the comments of the parties,
when appropriate. The Panel also recalled th e approach followed by the Appellate Body in Japan –
Apples, which required it to address the compatibility of Directive 2003/74/EC with respect to each of
the six hormones covered by the measure. Nevert heless, where the evidence was similar for all
hormones, or where information was not provided in relation to each hormone, the Panel addressed
the hormones collectively.1031

1026Panel Report, US – Continued Suspension , para. 7.414; Panel Report, Canada – Continued
1027Panel Report, US – Continued Suspension , para. 7.416; Panel Report, Canada – Continued
Suspension, para. 7.407.
1028Ibid. (referring to Appellate Body Report, EC – Hormones, para. 135).
1029Ibid. (referring to Appellate Body Report, EC – Hormones, para. 138).
1030Panel Report, US – Continued Suspension , para. 7.418; Panel Report, Canada – Continued
Suspension, para. 7.409. The Panel noted that, in some circumstances, only one or two experts have expressed
their views on an issue. Sometimes these views were similar or complemented each other. (Panel Report, US –
Continued Suspension , para. 7.420; Panel Report, Canada – Continued Suspension , para. 7.411) In other
circumstances, a larger number of experts expressed opinions and, sometimes, they expressed diverging
opinions.

1031Panel Report, US – Continued Suspension , paras. 7.420-7.422; Panel Report, Canada – Continued
Suspension, paras. 7.411-7.413.

501. Next, the Panel found that Directive 2003/74/EC is an SPS measure within the meaning of
paragraph 1 of Annex A to the SPS Agreement, and particularly item (b). 1032 The Panel then sought
to determine whether the permanent ban on meat and meat products treated with oestradiol-17 β for
growth-promoting purposes provided by Directive 2003/74/EC was based on a risk assessment within
the meaning of Articles 5.1 of the SPS Agreement. The European Communities argued that the three
Opinions issued by the SCVPH, supported by the 17 studies conducted between 1998-2001,
constituted a risk assessment within the meaning of Article 5.1, and that the permanent ban on meat
and meat products from cattle treated with oestradiol-17β was "based on" such risk assessment.
502. At the outset of its analysis, the Panel noted that, in order to determine whether the SCVPH
Opinions constituted a risk assessment with in the meaning of Article 5.1 of the SPS Agreement , it
would have to examine whether the SCVPH Opinions: (1) took into account risk assessment
techniques of the relevant international organizatio ns; (2) took into account the factors listed in
Article 5.2 of the SPS Agreement1033; (3) satisfied the definition of "risk assessment" contained in
Annex A, paragraph 4, of the SPS Agreement ; and (4) whether the conclusions in the SCVPH
Opinions are supported by the scientific evidence evaluated.1034
503. Relying on the reasoning of the panel in Japan – Apples , the Panel found that Article 5.1 of
the SPS Agreement does not require compliance with the risk assessment techniques developed by
international organizations, insofar as it requires that such techniques are "taken into account" by the
risk assessor. The Panel observed that, although th e SCVPH Opinions did not strictly follow the

1032Panel Report, US – Continued Suspension , para. 7.434; Panel Report, Canada – Continued
Suspension, para. 7.425. Annex A(1)(b) of the SPS Agreement reads:
1. Sanitary or phytosanitary measure – Any measure applied:

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

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; quaran tine treatments including relevant
requirements associated w ith the transport of animal s or plants, or with the
materials necessary for their survival during transport; provisions on
relevant statistical methods, sampling procedures and methods of risk
assessment; and packaging and labelling requirements directly related to
food safety.
None of the parties has argued that Directive 2003/74/EC is not an SPS measure.
1033Canada did not allege that Directive 2003/74/EC was inconsistent with Article 5.2 of the SPS
Agreement, and therefore this element was only examined in the case involving the United States. (See supra,
footnote 1025)
1034Panel Report, US – Continued Suspension , para. 7.445; Panel Report, Canada – Continued
Suspension, para. 7.434.

CODEX and JECFA risk assessment guidelines, th e European Communities "was aware of" and
"considered" such guidelines when preparing the SCVPH Opinions, and therefore had taken them into
account within the meaning of Article 5.1.
1035
504. The Panel in the case involving the United St ates also examined whether the SCVPH
Opinions took into account the factors listed in Article 5.2. 1036 The Panel noted that the United States
alleged that the European Communities had failed to take into account two of the specific elements
listed in Article 5.2, namely: (i) the available scienti fic information; and (ii) the relevant inspection,
sampling, and testing methods. 1037 In relation to the first elemen t, the Panel concluded that the
SCVPH Opinions had specifically addressed eviden ce available with respect to bioavailability,
susceptibility of sensitive populations, and DNA adduc ts and DNA damages, and took into account
the very scientific studies that the Unite d States alleged were not considered. 1038 R e g a r d i n g t h e
second element, the Panel found that the Euro pean Communities had compiled a "Working
Document"1039 recording visits to United States' regulat ory agencies, on-site inspections, and data
concerning failures in the United States' inspection regime. The Panel also observed that a lengthy
section of the 1999 Opinion is dedicated to discussing the relevant inspection, sampling, and testing
methods. For these reasons, the Panel concluded that the European Communities had taken into
account both the available scientific information a nd the relevant inspection, sampling and testing
methods in preparing the SCVPH Opinions, as required by Article 5.2 of the SPS Agreement.1040
505. Next, the Panel examined whether the SCVPH Opinions satisfied the definition of "risk
assessment" contained in paragraph 4 of Annex A of the SPS Agreement.1041 Recalling the Appellate
Body's jurisprudence from EC – Hormones and Australia – Salmon , the Panel stated that the
definition of a risk assessment in paragraph 4 of Annex A required WTO Members to: (a) identify the
additives, contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs;
(b) identify any possible adverse effect on human or animal health; and (c) evaluate the potential for
that adverse effect to arise from the presence of the identified additives, contaminants, toxins or
disease-causing organisms in food, beverages or feedstuffs.1042

1035Panel Report, US – Continued Suspension , para. 7.469; Panel Report, Canada – Continued
Suspension, para. 7.459.
1036This section does not appear in the Panel Report in the case against Canada because Canada did not
raise Article 5.2. (See supra, footnote 1025)
1038Ibid., para. 7.482.
1039Ibid., para. 7.483.
1040Ibid., paras. 7.483 and 7.484.
1041See infra, para. 525.
1042Panel Report, US – Continued Suspension , para. 7.507; Panel Report, Canada – Continued
Suspension, para. 7.479.

506. The Panel found that the SCVPH Opinions satisfied the first and second requirements of the
definition of risk assessment because they sufficiently identified both the contaminant
(oestradiol-17β) and the food (meat and meat products) at issue, as well as the possible adverse effects
on human or animal health (neurobiological, developmental, reproductive, and immunological effects;
and immunotoxicity, genotoxicity and carcinogenicity). 1043 However, the Panel found that the
European Communities failed to evaluate specifically the third requirement, that is, the possibility that
the identified adverse effects "came in to being, originated, or resulted" 1044 from the presence of
residues of oestradiol-17 β in meat or meat products as a result of the administration of that hormone
to cattle for growth-promoting purposes. The Panel gave the following reasons for its decision.
507. First, the Panel rejected the European Commun ities' argument that the definition of "risk
assessment" in Article 5 and Annex A of the SPS Agreement also included a "risk management"
component, in which the WTO Member concerned "weigh[ed] policy alternatives in the light of the
results of the risk assessment and, if required, select[ed] and implement[ed] appropriate control
options, including regulatory measures."1045 The Panel took note of the Appellate Body's finding that
a risk assessment can take into account "matters not susceptible of quanti tative analysis by the
empirical or experimental laboratory methods commonly associated with the physical sciences". 1046
After discussing the Appellate Body's decision in EC – Hormones, the Panel reasoned that there is no
textual basis in the SPS Agreement to support the inclusion of a "risk management" component in the
definition of risk assessment.1047
508. Secondly, the Panel "asked the experts whether the [SCVPH] Opinions identified the
potential for adverse effects on human health, including the carcinogenic or genotoxic potential, of the
residues of oestradiol-17 β found in meat derived from cattle to which this hormone had been
administered for growth promotion purposes in acco rdance with good veterinary practice and to what
extent the Opinions evaluated the poten tial occurrence of these adverse effects." 1048 The Panel
observed, in this regard, that four of the expert s concurred that the scien tific evidence adduced in

1043Panel Report, US – Continued Suspension , para. 7.508; Panel Report, Canada – Continued
Suspension, para. 7.480.
1044Panel Report, US – Continued Suspension , para. 7.513; Panel Report, Canada – Continued
Suspension, para. 7.485.
1045Panel Report, US – Continued Suspension , para. 7.517; Panel Report, Canada – Continued
Suspension, para. 7.489. (footnote omitted)
1046Panel Report, US – Continued Suspension , para. 7.520; Panel Report, Canada – Continued
1047Panel Report, US – Continued Suspension , paras. 7.519 and 7.520; Panel Report, Canada –
Continued Suspension, paras. 7.491 and 7.492 (referring to Appellate Body Report, EC – Hormones, paras. 181
and 187).
1048Panel Report, US – Continued Suspension , para. 7.521; Panel Report, Canada – Continued
Suspension, para. 7.493 (referring to replies to Questions po sed by the Panel to the scientific experts, Panel
Reports, Annex D, para. 180).

relation to the possibility that carcinogenic or ge notoxic effects would result from consumption of
meat treated with oestradiol-17 β was either missing or insufficient.
1049 To the extent that the
European Communities argued that the relevant risk from hormones is an "additive risk", the experts
concluded that the European Communities did not assess the extent to which residues of hormones in
meat and meat products as a result of the cattle be ing treated with the hormones for growth-promoting
purposes contribute to additive risks arising from the cumulative exposures of humans to multiple
hazards, in addition to the endoge nous production of some of these hormones by animals and human
beings.1050 The Panel then itself "looked at the Opini ons and found statements that indicate that
specific studies on the potential for the adverse health effects identified by the European Communities
to arise from consumption of meat and meat products from cattle treated with oestradiol-17 β for
growth promotion purposes were not conducted."1051
509. The Panel concluded:
All of the statements of the experts, and indeed statements from the
Opinions, indicate that the Europ ean Communities has evaluated the
potential for the identified adverse effects to be associated with
oestrogens in general, but has not provided analysis of the potential
for these effects to arise from consumption of meat and meat
products which contain residues of oestradiol-17 β as a result of the
cattle they are derived from being treated with the hormone for
growth promotion purposes. The Panel, therefore, concludes that
although the European Communiti es has evaluated the association
between excess hormones and neurobiological, developmental,
reproductive and immunological effects, as well as immunotoxicity,
genotoxicity, and carcinogenicity, it has not satisfied the
requirements of the definition of a risk assessment contained in
Annex A(4) because it has not evaluated specifically the possibility
that these adverse effects come into being, originate, or result from
the consumption of meat or meat products which contain veterinary
residues of oestradiol-17 β as a result of the cattle being treated with
the hormone for growth promotion purposes.
1052

1049Panel Report, US – Continued Suspension , paras. 7.522-7.525; Panel Report, Canada – Continued
Suspension, paras. 7.494-7.497 (referring to replies of Drs. Boobis, Guttenplan, Boisseau, and Cogliano to
Questions posed by the Panel to the scientific experts, Panel Reports, Annex D, paras. 144, 145, 132, and 180,
respectively).
1050Panel Report, US – Continued Suspension , para. 7.529; Panel Report, Canada – Continued
Suspension, para. 7.501 (referring to replies to Question 56 po sed by the Panel to the scientific experts, Panel
Reports, Annex D, paras. 422-431).
1051Panel Report, US – Continued Suspension , para. 7.531; Panel Report, Canada – Continued
Suspension, para. 7.503. The Panel noted that the 1999 Opinio n looked at three main areas of potential adverse
effects: developmental effects on different stages of life; the relationship between oestrogens and cancer; and
the effect of sex hormones on the immune system. (Panel Report, US – Continued Suspension , para. 7.532;
Panel Report, Canada – Continued Suspension, para. 7.504)
1052Panel Report, US – Continued Suspension , para. 7.537; Panel Report, Canada – Continued
Suspension, para. 7.509.

510. Despite its finding, the Panel proceeded to examin e the fourth element of the test that it had
set out to determine whether the SCVPH met the defi nition of "risk assessment", that is, whether the
conclusions of the SCVPH Opinions were sufficientl y supported by the scientific evidence evaluated.
On the basis of the opinions of the experts consu lted and its own review of the SCVPH Opinions, the
Panel found that the scientific evidence referred to in the SCVPH Opinions did not support the
conclusion that the genotoxicity of oestradiol-17 β has been demonstrated and that residues of
oestradiol-17β in meat and meat products lead to increas ed risk of cancer or adverse immunological
and developmental effects.1053
511. Accordingly, the Panel concluded that the "[SCVPH] Opinions do not constitute a risk
assessment because the Opin ions do not satisfy the definition of a risk assessment contained in
Annex A(4) second sentence and because the scientific evidence referred to in the Opinions does not
support the conclusions therein". 1054 As a consequence of this finding, the Panel also found that the
permanent ban on meat and meat products treated with oestradiol-17 β for growth-promoting purposes
is not a measure "based on" a risk assessment within the meaning of Article 5.1 of the SPS
Agreement.1055 Therefore, the Panel concluded that "the [European Communities'] implementing
measure on oestradiol-17β is not compatible with Article 5.1 of the SPS Agreement."1056
D. Claims and Arguments on Appeal
512. The European Communities challenges on appeal several aspects of the Panel's assessment of
Directive 2003/74/EC under Article 5.1 of the SPS Agreement . First, the European Communities
argues that the Panel erred in its interpretation of Article 5.1, as informed by Article 5.2, of the SPS
Agreement, by excluding from the scope of its analysis arguments and evidence concerning the
abusive use and difficulties of control in the ad ministration of hormones to cattle for growth
promotion.1057 Secondly, the European Communities submits that the Panel erred in finding that the
European Communities failed to evaluate specifically the risks arising from residues of oestradiol-17 β
in bovine meat treated with this hormone for growth-promoting purposes. 1058 Thirdly, the European
Communities alleges that the Panel erred in inte rpreting the definition of a risk assessment in

1053Panel Report, US – Continued Suspension , para. 7.572; Panel Report, Canada – Continued
Suspension, para. 7.540.
1054Panel Report, US – Continued Suspension , para. 7.578; Panel Report, Canada – Continued
Suspension, para. 7.548.
1055Ibid.
1056Panel Report, US – Continued Suspension , para. 7.579; Panel Report, Canada – Continued
Suspension, para. 7.549.
1057European Communities' appellant's submission, paras. 331 and 332.
1058Ibid., para. 343.

paragraph 4 of Annex A of the SPS Agreement as requiring the quantification of the risks arising
from the consumption of residues of oestradiol-17β in bovine meat.
1059
513. The European Communities also argues that the Panel erroneously allocated the burden of
proof under Article 5.1 of the SPS Agreement, when it "shift[ed] the burden of proof to the European
Communities without first examining, provision by provision under the SPS Agreement as required
by the Appellate Body, whether the arguments of the United States and Canada had sufficient merits
to shift the burden of proof back to the European Communities."1060
514. Finally, the European Communities charges th e Panel with failing to conduct an objective
assessment of the facts of the case, as required by Ar ticle 11 of the DSU, in reaching its finding under
Article 5.1 of the SPS Agreement. According to the European Communities, the Panel applied an
improper standard of review to the evidence before it, by seeking to determine "the correct scientific
conclusions"1061 as to the risks arising from the hormones at issue, even though Members are entitled
to rely on divergent opinions co ming from qualified and respected sources. Instead, the appropriate
standard of review required th e Panel to determine whether there was any "reasonable scientific
basis"1062 for the European Communities' measure, whil e respecting the "important and autonomous"
right of Members to set their level of SPS protection. 1063 The European Communities submits that a
panel should not substitute its scientific judgement for that of the Member taking the measure and
should recognize the significance of "genuine and legitimate scientific controversy". 1064 The
European Communities challenges the Panel's examination of three distinct aspects of the European
Communities' risk assessment of oestradiol-17β: (i) the risks arising from exposure to hormones from
multiple endogenous and exogenous sources 1065; (ii) actual or potential genotoxicity of
oestradiol-17β1066; and (iii) specificity or direct causality in the demonstration of risks arising from
the consumption of bovine meat containing residues of oestradiol-17 β as a result of cattle being
treated with this substance for growth promotion.1067
515. The United States considers that the Panel did not err in finding that the European
Communities' permanent ban on oestradiol-17 β was not based on a risk assessment within the
meaning of Article 5.1 of the SPS Agreement . According to the United States, the Panel did not

1060Ibid., para. 294.
1061Ibid., para. 240.
1062Ibid., para. 243.
1064Ibid., para. 248.
1065Ibid., para. 249.
1066Ibid., paras. 250-258.
1067Ibid., paras. 259-270.

misinterpret Article 5.1 by excluding from its anal ysis evidence regarding misuse or abuse in the
administration of oestradiol-17 β. Rather, the Panel "fully appreciated" 1068 the significance of the
European Communities' assertion that misuse or abuse in the administration of oestradiol-17 β could
add to the particular risk identified, but correctly he ld that those risks would only be relevant had the
European Communities succeeded in demonstrating that a specific risk arose from residues of
oestradiol-17β in meat. With respect to the European Co mmunities' allegation that the Panel erred in
finding that it had failed to evaluate specifically th e particular risks at issue, the United States
maintains that the Panel's specificity re quirement is based on a "careful tracing" 1069 of the Appellate
Body's jurisprudence on Article 5.1, and that the evidentiary record before the Panel supported its
conclusion that the European Communities "identifie d only 'general risks' and failed to address the
specific risk required by the SPS Agreement ."1070 The United States argues that "one expert's
statement, divorced from the rest of the evidentiary record"1071 is not sufficient to demonstrate that the
European Communities evaluated the specific risk at issue. The United States also dismisses the
European Communities' allegation that the Panel re quired the quantification of risks, because the
Panel did not preclude a qualitative de monstration of risks. The Panel's reference to the potential
occurrence of adverse effects focused instead on "whether the [European Communities'] purported
risk assessment appeared to be 'sufficiently specific to the case at hand.'"1072
516. Furthermore, the United States maintains that th e Panel did not err in its allocation of the
burden of proof under Article 5.1. The Panel was correct in allocating the initial burden of proving
consistency with Article 5.1 to the European Communities, because its claim under Article 22.8 of the
DSU was premised on an allegation of consistency of Directive 2003/74/EC. Having found that the
European Communities had met this burden, the Pa nel shifted the burden of proof to the United
States, and correctly found that the United States had rebutted the European Communities' allegation
of consistency "by submitting positive evidence that demonstrated a breach of the SPS Agreement by
the [European Communities]."1073 As a result, the burden of proof "shifted back and forth between the
parties"1074 and the Panel rightly "followed the practice of other panels to weigh all the evidence
before it."1075
517. Finally, the United States rejects the European Communities' contention that the Panel failed
to conduct an objective assessment of the matter in its appreciation of the evidence. The United

1069Ibid., para. 57.
1070Ibid., para. 61.
1071Ibid., para. 60.
1073Ibid., para. 93.
1074Ibid., para. 94.
1075Ibid. (quoting Panel Report, US – Continued Suspension, para. 7.386).

States submits that the more deferential "reasona bleness" standard articulated by the European
Communities for disputes under Article 5.1 has b een rejected by the Appellate Body in EC –
Hormones because it finds no support in the text of the SPS Agreement and "conflates the concept of
'standard of review' and the a pplication of law to facts."
1076 Under the "objective assessment of the
facts" standard that applies to disputes under the SPS Agreement, panels retain a margin of discretion
as the triers of facts, and may properly "determi ne that certain elements of evidence should be
accorded more weight than other elements." 1077 For the United States, the Panel's exercise of
judgement in evaluating the evidence was "part and parcel" 1078 of its duty to make an objective
assessment of the facts. Therefore, the Panel's fi ndings in relation to the risks arising from exposure
to hormone residues from multiple sources, the actual or potential genotoxicity of oestradiol-17 β, the
specificity of the risk assessment, and the relevance of misuse and abuse in a risk assessment, were all
within the bounds of the Panel's discretion as the trier of facts.
518. Canada submits that the Panel did not err in its interpretation of Article 5.1, as informed by
Article 5.2, of the SPS Agreement. Canada argues that the Panel did not ignore evidence related to
misuse and abuse in the administration of hormones in its analysis, but rather correctly considered that
such evidence was not "material" 1079 to its analysis, having found earlier that the European
Communities had failed to demonstrate specifically th e possibility of adverse effects arising from the
consumption of bovine meat containing residues of oestradiol-17 β. Canada additionally asserts that
the Panel correctly held that the European Commun ities' risk assessment was not sufficiently specific
to the particular risks at issue. The Europ ean Communities' assertion that the genotoxicity of
oestradiol-17β did not make it possible to perform a quan titative risk assessment is unsubstantiated by
the evidence, because "the fact that a hormone may be an in vitro genotoxin does not mean that it is
an in vivo genotoxin."1080 Canada considers that the Panel had a "solid basis" for finding that the risk
assessment was not sufficiently specific to the risk, because the scientific experts assisting the Panel
"indicat[ed] very clearly that the [European Communities] did not have scientific evidence to support
the assertion of the specific risk." 1081 Canada also rejects the European Communities' allegation that
the Panel erred in requiring a quantitative analysis of risk. According to Canada, the evidence upon
which the European Communities' risk assessment relies does not contain either a qualitative or a
quantitative analysis of risk, because the Eu ropean Communities has offered no evidence
demonstrating the genotoxicity of oestradiol-17β in vivo.

1078Ibid., para. 47.
1080Ibid., para. 95.
1081Ibid., para. 99.

519. Canada contends, moreover, that the Panel di d not fail to conduct an objective assessment of
the matter in reaching its finding under Article 5.1 of the SPS Agreement. As the trier of facts, the
Panel retained the discretion "to give greater weight to advice of certain experts over that of others"
and was not required to "treat all advice r eceived from the experts on an equal footing." 1082 Canada
submits that the European Communities has failed to demonstrate that the Panel exceeded the bounds
of its discretion in its analysis of the evidence on multiple exposure, genotoxicity, and specificity or
direct causality.
520. Australia agrees with the Eur opean Communities' argument that the Panel erred in the
standard of review that it applied in its assessment under Article 5.1 of the SPS Agreement. Australia
submits that the standard of review applicab le under Article 5.1 required the Panel to accord
"considerable deference (but not total deference)"1083 to a Member's risk assessment, and therefore the
Panel should have focused on "whether the European Communities' risk asse ssment represented an
objective and credible view"1084 from a qualified and respected source.
521. New Zealand disagrees with the European Communities' claims that the Panel erred in its
assessment of Directive 2003/74/EC under Article 5.1 of the SPS Agreement. In New Zealand's
view, the Panel's conclusion that the permanent ban on oestradiol-17 β provided in
Directive 2003/74/EC was not based on a risk asse ssment under Article 5.1 was supported by an
exhaustive review of all the scientific evidence, drawing upon the expertise and knowledge of a group
of eminent scientific and technical experts.1085
E. The Panel's Assessment of Directive 2003/74/EC under Article 5.1 of the SPS
Agreement
1. General Disciplines Applicable to the Adoption of an SPS Measure
522. The SPS Agreement recognizes the right of WTO Member s to take measures necessary to
protect human, animal or plant life or health. The right to take a protective measure must be exercised
consistently with a series of obligations that are set forth in that Agreement, and that seek to ensure
that such measures are properly justified.
1086

1083Australia's third participant's submission, para. 36.
1084Ibid., para. 42.
1085New Zealand's third participant's submission, para. 3.47.
1086See the first Recital of the Preamble of the SPS Agreement. Article 2.3 of the SPS Agreement also
provides that "Members shall ensure that their sanita ry and phytosanitary measures do not arbitrarily or
unjustifiably discriminate between Members where identi cal or similar conditions prevail, including between
their own territory and that of other Members" and that SPS measures "shall not be applied in a manner which
would constitute a disguised restriction on international trade."

523. There are several concepts that are defined in the SPS Agreement and that describe aspects
of a WTO Member's decision-making process when taking an SPS measure. The "appropriate level
of protection" is defined in paragraph 5 of Annex A to the SPS Agreemen t as "[t]he level of
protection deemed appropriate by the Member establishing a sanitary or phytosanitary measure to
protect human, animal or plant life or health w ithin its territory." It is the "prerogative"
1087 of a WTO
Member to determine the level of protection that it deems appropriate. 1088 The SPS measure is the
"instrument" chosen by the WTO Member to impl ement its sanitary or phytosanitary objective. 1089
Based on the wording of Article 5.6 of the SPS Agreement, the Appellate Body has explained that the
"determination of the level of protection is an el ement in the decision-making process which logically
precedes and is separate from the establishm ent or maintenance of the SPS measure". 1090 I n o t h e r
words, the appropriate level of protection determines the SPS measure to be introduced or maintained,
rather than the appropriate level of prot ection being determined by the SPS measure. 1091 T h e
Appellate Body has also found that "the SPS Agreement contains an implicit obligation to determine
the appropriate level of protection." 1092 Although it need not be determ ined in quantitative terms, the
level of protection cannot be determined "with such vagueness or equivocation that the application of
the relevant provisions of the SPS Agreement ... becomes impossible".1093
524. Another important aspect of the decision-maki ng process is the "risk assessment". Pursuant
to Article 5.1 of the SPS Agreement , an SPS measure must be "based on an assessment, as
appropriate to the circumstances, of the risks to human, animal or plant life or health". Under
Article 5.7 of the SPS Agreement , WTO Members are also allowed to take an SPS measure, on a
provisional basis, where certain conditions are fulf illed, including where the relevant scientific
evidence is insufficient to perform a risk assessment. We examine Article 5.7 in more detail in
section VII.

1087Appellate Body Report, Australia – Salmon, para. 199. (emphasis omitted)
1088Although it is for a WTO Member to choose its level of protection, the SPS Agreement provides
for disciplines that a Member must respect when it has done so. Pursuant to Article 5.5, a WTO Member "shall
avoid arbitrary or unjustifiable distinctions in the levels it considers to be appropriate in different situations, if
such distinctions result in discrimination or a disguised restriction on international trade." Article 5.6 states that
Members "shall ensure that [SPS] m easures are not more trade-restric tive than required to achieve their
appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility".
In addition, Article 5.4 provides that "Members should, when determining the appropriate level of sanitary or
phytosanitary protection, take into account the objective of minimizing negative trade effects."
1089Appellate Body Report, Australia – Salmon, para. 200. (emphasis omitted)
1090Ibid., para. 203. (emphasis omitted)
1091Ibid., para. 206.
1092Ibid.
1093Ibid., para. 203.

525. A "risk assessment" is defined in paragraph 4 of Annex A to the SPS Agreement as:
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 organisms in food, beverages
or feedstuffs.
526. Article 5.1 is a "specific application of the b asic obligations contained in Article 2.2 of the
SPS Agreement ."
1094 Article 2.2 focuses on the need for an SPS measure to be based on scientific
principles and sufficient scientific evidence. It provides:
Members shall ensure that any sanita ry 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 evid ence, except as provided for in
paragraph 7 of Article 5.
The Appellate Body has observed that "Articles 2. 2 and 5.1 should constantly be read together"
because "Article 2.2 informs Articles 5.1: the elemen ts that define the basi c obligation set out in
Article 2.2 impart meaning to Article 5.1."1095
527. A list of factors that must be taken into account in a risk assessment is provided in Article 5.2.
The list begins with "available scientific evid ence" and also includes: "relevant processes and
production methods; relevant inspection, sampli ng and testing methods; prevalence of specific
diseases or pests; existence of pest- or disease-fr ee areas; relevant ecological and environmental
conditions; and quarantine or other treatment." In EC – Hormones , the panel described a "risk
assessment" as a "scientific process aimed at establishing the scientific basis" for the SPS measure. 1096
The Appellate Body understood the panel to refer to "a process characterized by systematic,
disciplined and objective enquiry and analysis, that is, a mode of studying and sorting out facts and
opinions".
1097 Science therefore plays a central role in a risk assessment. However, the Appellate
Body has cautioned against taking too narrow an approach to a risk assessment:
It is essential to bear in mind that th e risk that is to be evaluated in a
risk assessment under Article 5.1 is not only risk ascertainable in a
science laboratory operating under strictly controlled conditions, but
also risk in human societies as they actually exist, in other words, the

1095Ibid.
1096Ibid., para. 187 (quoting Panel Report, EC – Hormones (US) , para. 8.107; and Panel Report, EC –
Hormones (Canada), para. 8.110).
1097Ibid., para. 187.

actual potential for adverse effects on human health in the real world
where people live and work and die.
1098
528. As we noted earlier, 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. Instead, "the
results of the risk assessment must sufficiently warrant—that is to say, reasonably support—the SPS
measure at stake". 1099 Put differently, there must be a "rational relationship" between the SPS
measure and the risk assessment.1100
529. 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." 1101 While recognizing
that, in most cases, WTO Members "tend to base their 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 comi ng from qualified and respected sources." 1102 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 reasonable relationship between the SPS measure and the
risk assessment, especially wh ere the risk involved is life-threatening in character and is perceived to
constitute a clear and imminent threat to public health and safety."1103
530. An SPS measure need not be based on a risk assessment performed by the WTO Member
taking the measure. It can be based on a risk assessment performed by a relevant international
organization or by another WTO Member. 1104 The risk assessment can be quantitative or qualitative
in nature.1105 Nevertheless, the Appellate Body h as noted that "theoretical uncertainty" 1106 is not the
kind of risk to be assessed under Article 5.1; instead, the risk to be assessed must be an
"ascertainable" risk.1107 In addition, the risk assessment must ha ve the requisite degree of specificity.
The assessment must be "sufficiently specific" 1108 in terms of the harm concerned and the precise
agent that may possibly cause the harm.1109

1099Ibid., para. 193.
1100Ibid.
1101Ibid., para. 194.
1102Ibid.
1103Ibid.
1104Ibid., para. 190.
1105Ibid., para. 186.
1106Ibid.
1107Ibid.
1108Ibid., para. 200.

531. Whilst WTO Members have the right to take SPS me asures, they are not required to do so.
The risk assessment may conclude that there is no ascertainable risk, in which case no SPS measure
can be taken. Alternatively, a WTO Member may conclude that an SPS measure is not necessary in
the light of the risks determined in the risk assessment and the acceptable level of protection
determined by that WTO Member.
532. International standards are given a prominent role under the SPS Agreement, particularly in
furthering the objective of promoting the harmoni zation of sanitary and phytosanitary standards
between WTO Members.1110 This is to be achieved by encouraging WTO Members to base their SPS
measures on international standards, guide lines or recommendations, where they exist. 1111 There is a
rebuttable presumption that SPS measures that conf orm to international standards, guidelines or
recommendations are "necessary to protect human, an imal or plant life or health, and ... [are]
consistent with the relevant provision s of this Agreement and of GATT 1994". 1112 While use of
international standards is encouraged, the SPS Agreement recognizes the right of WTO Members to
introduce or maintain an SPS measure which results in a higher leve l of protection than would be
achieved by measures based on such international st andards. Where a Member exercises its right to
adopt an SPS measure that results in a higher level of protection, that right is qualified in that the SPS
measure must comply with the other requirements of the SPS Agreement 1113, including the
requirement to perform a risk assessment. 1114 However, the Appellate Body has found that the
adoption of an SPS measure that does not conform to an international standard and results in a higher
level of protection does not give rise to a more exacting burden of proof under the SPS Agreement:
The presumption of consistency w ith relevant provisions of the SPS
Agreement that arises under Article 3.2 in respect of measures that
conform to international standards may well be an incentive for
Members so to conform their SPS measures with such standards. It
is clear, however, that a decision of a Member not to conform a
particular measure with an intern ational standard does not authorize
imposition of a special or generalized burden of proof upon that
Member, which may, more often than not, amount to a penalty.
1115
(original emphasis)
533. At the oral hearing, we explored the relations hip between the appropriate level of protection
and the risk assessment. The European Communities considers that the appropriate level of protection
can clearly be taken into account in a risk assessment and may, in so me cases, be reflected in the

1110See Article 3 and Recital 6 of the Preamble of the SPS Agreement.
1111Article 3.1 of the SPS Agreement.
1112Article 3.2 of the SPS Agreement.
1113Article 3.3 of the SPS Agreement.
1114Appellate Body Report, EC – Hormones, paras. 176 and 177.
1115Ibid., para. 102.

mandate and parameters given to the risk assessors. The United States and Canada recognize that the
acceptable level of risk may sometimes play a ro le, albeit a limited one, in respect of the risk
assessment. The United States and Canada, howev er, caution about the need to maintain the
objectivity of the risk assessment process and rej ect the notion that subjective policy choices have a
role to play in a risk assessment. In their view , these policy choices may be taken into account by a
WTO Member in determining its appropriate leve l of risk and in selecting the SPS measure, but
should not be part of the risk assessment process, which must remain an objective and scientific
evaluation.
534. The risk assessment cannot be entirely isolated from the appropriate level of protection.
There may be circumstances in which the appropriate level of protection chosen by a Member affects
the scope or method of the risk assessment. This may be the case where a WTO Member decides not
to adopt an SPS measure based on an international standard because it seeks to achieve a higher level
of protection. In such a situation, the fact that the WTO Member has chosen to set a higher level of
protection may require it to perform certain research as part of its risk assessment that is different
from the parameters considered a nd the research carried out in the risk assessment underlying the
international standard. However, the chosen level of protection must not affect the rigour or objective
nature of the risk assessment, which must remain, in its essence, a process in which possible adverse
effects are evaluated using scientific methods.
1116 Likewise, whatever the level of protection a
Member chooses does not pre-determine the results of the risk assessment. Otherwise, the purpose of
performing the risk assessment would be defeated.1117
535. We understand that Codex draws a distinc tion between "risk assessment" and "risk
management".1118 It defines "risk management" as "the process, distinct from risk assessment , of
weighing policy alternatives ... considering risk asses sment and other factors relevant for the health

1116We recall, however, that the scien tific process must not be understood narrowly as being confined
to matters that are "susceptible of quantitative analysis by the empirical or experimental la boratory methods
commonly associated with the ph ysical sciences." Instead, the risk to be evaluated also includes the "risk in
human societies as they actually exist, in other words, the actual potential for adverse effects on human health in
the real world where people live and work and die". (Appellate Body Report, EC – Hormones, para. 187)
1117This is consistent with the Appellate Body's views about the relationship between the risk
assessment and the SPS measure:
We understand this phrase to imply that a risk assessment should not be
limited to an examination of the measure already in place or favoured by the
importing Member. In other words, the evaluation contemplated in
paragraph 4 of Annex A to the SPS Agreement should not be distorted by
preconceived views on the nature and the content of the measure to be
taken; nor should it develop into an exercise tailored to and carried out for
the purpose of justifying decisions ex post facto.
(Appellate Body Report, Japan – Apples, para. 208)
1118Codex Alimentarius Commission, Procedural Manual, 15th edition, p. 44. See also Panel Report,
US – Continued Suspension, para. 7.515; and Panel Report, Canada – Continued Suspension, para. 7.487.

protection of consumers and for the promotion of fair trade practices, and, if needed, selecting
appropriate prevention and control options." 1119 In EC – Hormones , the Appellate Body noted that
the SPS Agreement does not refer to the concept of "risk management" and it rejected the panel's
restrictive interpretation of a "risk assessment" based on that distinction. 1120 The Appellate Body has
not provided a clear demarcation of the factors th at may be considered in a "risk assessment" under
the SPS Agreement, but it has held that the list of factors provided in Article 5.2 is not a closed list
and, in particular, that abuse or misuse and difficu lties of control in the administration of hormones
may be considered in the context of a risk assessment.1121
536. Before we proceed to examine the European Communities' claims, we briefly summarize
some of the relevant facts of this case. We note that Codex has adopted an international standard for
oestradiol-17β, based on evaluations carried out by JECFA. 1122 The European Communities asserts
that it has determined a higher le vel of protection than that whic h would be achieved under Codex's
standard. According to the European Communities, it s level of protection is "no (avoidable) risk, that
is a level of protection that does not allow an y unnecessary addition from exposure to genotoxic
chemical substances that are intended to be added deliberately to food." 1123 The European
Communities also notes that it has performed a ri sk assessment for meat from cattle treated with
oestradiol-17β for growth-promotion purposes. This risk assessment consists of the 1999, 2000,
and 2002 Opinions, as supported by 17 studies c onducted between 1998 and 2001. The European
Communities further explains that its SPS measure —that is, the import and marketing ban applied
pursuant to Directive 2003/74/EC—was taken in the light of the higher level of protection that it
determined for itself and is properly based on its risk assessment.1124
2. The Panel's Interpretation and Applica tion of Articles 5.1 and 5.2 of the SPS
Agreement
537. We examine, first, the European Communities' claim that the Panel erred by adopting "an
extremely narrow and consequently erroneous interpretation of Article 5.1 and failed to take into
account that risk assessment and risk management partly overlap in the SPS Agreement ".1125 T h e
European Communities argues that the Panel's restri ctive interpretation of risk assessment led it to

1119Codex Alimentarius Commission, Procedural Manual, 15th edition, p. 45. (emphasis added)
1121Ibid., paras. 187 and 206.
1122See supra, footnote 933.
1123Panel Report, US – Continued Suspension , para. 7.607; Panel Report, Canada – Continued
Suspension, para. 7.585 (referring to replies of the European Communities to questions posed by the Panel after
the second substantive meeting, Panel Reports, Annex C-1, para. 69). See also 1999 Opinion, section I.2.
1124Panel Report, US – Continued Suspension , para. 7.390; Panel Report, Canada – Continued
Suspension, para. 7.387.

wrongfully exclude from the scope of its analysis under Article 5.1 evidence concerning misuse or
abuse and difficulties of control in the administration of hormones to cattle for growth promotion.
538. We begin by reviewing the Pa nel's understanding of the Appella te Body's interpretation of
Article 5.1 in EC – Hormones and particularly its discussion of the relevance of risk management
factors for the purposes of a risk assessment within the meaning of Annex A and Article 5.1 of the
SPS Agreement. The Panel in this case interpreted the Appellate Body's ruling in EC – Hormones as
follows:
Although the Appellate Body disappr oved of the original panel's
distinction between "risk assess ment" and "risk management"
because it had no textual basis in the Agreement, this Panel can find
no statement by the Appellate Body confirming that what the
European Communities describes as risk management is included
within the definition of a risk asse ssment as set forth in Annex A(4)
of the SPS Agreement . In fact, the Appellate Body stressed that
Article 5 and Annex A speak of risk assessment only and that the
term risk management is not to be found either in Article 5 or in any
other provision of the SPS Agreement.
The Panel agrees with the Appellate Body that its role as a treaty
interpreter is to "read and interp ret the words actually used by the
agreement under examination, and not words which the interpreter
may feel should have been used." The Panel takes note of the
Appellate Body's finding that a risk assessment can take into account
"matters not susceptible of quantitative analysis by the empirical or
experimental laboratory methods commonly associated with the
physical sciences." However, the Panel finds that neither that finding
nor the text of the Agreement includ es within the definition of a risk
assessment the concepts put forward by the European Communities
as "risk management."
1126 (footnote omitted)
539. Therefore, the Panel stated that it would ask qu estions of the experts relating to whether the
SCVPH Opinions identified the potential for adve rse effects on human health of residues of
oestradiol-17β in the meat of cattle treated with this hormone when applied in accordance with good
veterinary practice.1127

1126Panel Report, US – Continued Suspension , paras. 7.519 and 7.520; Panel Report, Canada –
Continued Suspension, paras. 7.491 and 7.492.
1127Panel Report, US – Continued Suspension , para. 7.521; Panel Report, Canada – Continued
Suspension, para. 7.493.

540. At the interim review stage, the Eur opean Communities asserted that the Panel
"misinterpret[ed]" what the Appellate Body had said in EC – Hormones .1128 In response, the Panel
explained:
The Appellate Body disapproved of the panel's use in the original
EC – Hormones dispute of the distinction between "risk assessment"
and "risk management" because it ha d no textual basis. However,
this did not mean that the Appellate Body endorsed an interpretation
of Article 5.1 or Annex A(4) of the SPS Agreement that included a
risk management stage. In fact, it emphatically stated that the term
"risk management" is not to be found in Article 5 or any other
provision of the SPS Agreement. The Panel, therefore, finds no basis
for the European Communities' ass ertion that the Appellate Body
"confirmed that a risk assessment within the meaning of Article 5.1
includes a risk management stage which is the responsibility of the
regulator to carry out and not of the scientific bodies."
1129 (footnote
omitted)
541. We find it difficult to reconcile the Panel's understanding of EC – Hormones with what the
Appellate Body held in that Report. As we noted ab ove, in that case, the Appellate Body rejected the
rigid distinction drawn by the panel between "risk assessment" and "risk management", explaining:
We must stress, in this connection, that Article 5 and Annex A of the
SPS Agreement speak of "risk assessment" only and that the term
"risk management" is not to be f ound either in Article 5 or in any
other provision of the SPS Agreement. Thus, the Panel's distinction,

1128Panel Report, US – Continued Suspension , para. 6.97; Panel Report, Canada – Continued
Suspension, para. 6.89.
1129Panel Report, US – Continued Suspension , para. 6.99; Panel Report, Canada – Continued
Nowhere in the texts of Article 5.1 and Annex A(4) does the Panel find
support for the European Communities' contention that a risk assessment
within the meaning of the SPS Agreement includes "weighing policy
alternatives in light of the results of risk assessment and, if required,
selecting and implementing appropriate control options, including
regulatory measures." What the European Communities seems to be
describing is how a government chooses an appropriate SPS measure based
on a risk assessment. The Panel does not find that this is contemplated by
the texts of Article 5.1 and Annex A(4) of the SPS Agreement.
(Panel Report, US – Continued Suspension , para. 6.102; Panel Report, Canada – Continued Suspension ,
para. 6.94. (footnote omitted)) Similarly, the Panel did not address evidence on misuse or abuse in the
administration of the hormones in its analysis under Article 5.7 of the SPS Agreement. The Panel reasoned that:
 ... Article 5.7 is applicable when re levant scientific evidence is not
sufficient to undertake a risk assessment in conformity with Article 5.1.
Whether instances of misuse or abuse in the administration of hormones
exist or not is not as such a scientific issue likely to make a risk assessment
within the meaning of Article 5.1 and Annex A(4) of the SPS Agreement
impossible.
(Panel Report, US – Continued Suspension , para. 7.603; Panel Report, Canada – Continued Suspension ,
para. 7.578)

which it apparently employs to achieve or support what appears to be
a restrictive notion of risk assessment, has no textual basis.
1130
Subsequently in the same Report, the Appellate Body reiterated its view that "the concept of 'risk
management' is not mentioned in any provision of the SPS Agreement and, as such, cannot be used
to sustain a more restrictive interpretation of 'risk assessment' than is justified by the actual terms of
Article 5.2, Article 8 and Annex C of the SPS Agreement".1131
542. Therefore, in our view, the Panel's interpretation of "risk assessment" resulted in the same
"restrictive notion of risk assessment" 1132 that the Appellate Body found to be erroneous in EC –
Hormones. The Panel sought in this case to rewrite the Appellate Body Report in EC – Hormones
and to re-establish the rigid distinction between "risk assessment" and "risk management" that the
Appellate Body had rejected in that case.
543. We set out above our understanding of the Appellate Body's finding in EC – Hormones in so
far as the distinction between "risk assessment" and "risk management" is concerned. We now turn to
the European Communities' argument that the di stinction that the Panel drew between "risk
assessment" and "risk management" resulted in the exclusion of certain factors from the Panel's
analysis under Article 5.1 of the SPS Agreement. In particular, the European Communities asserts
that the Panel improperly excluded the eviden ce concerning misuse or abuse and difficulties of
control in the administration of hormones to cattle for growth promotion.1133
544. The relevance of the risks relating to abuse or misuse in the administration of hormones was
also addressed in EC – Hormones . In that case, the Appellate Body noted that "[s]ome of the kinds
of factors listed in Article 5.2 such as 'relev ant processes and production methods' and 'relevant
inspection, sampling and testing methods' are not n ecessarily or wholly susceptible of investigation
according to laboratory methods of, for example, bioc hemistry or pharmacology" and that "there is
nothing to indicate that the listing of factors that may be taken into account in a risk assessment of
Article 5.2 was intended to be a closed list."1134 It then specifically examined whether risks relating to

1131Ibid., para. 206. (emphasis added) The Appellate Body considered that the language in Article 5.2
("relevant processes and production methods; relevant inspection, sampling and testing methods"), Article 8,
and Annex C ("control, inspection and approval procedures") "is amply sufficient to authorize the taking into
account of risks arising from failure to comply with the requirements of good veterinary practice in the
administration of hormones for growth promotion purposes, as well as risks arising from difficulties of control,
inspection and enforcement of the requirements of good veterinary practice." (Ibid., para. 205)
1132Ibid., para. 181.
1133European Communities' appellant's submission, para. 325. At the oral hearing, the European
Communities confirmed that its appeal focuses on misuse and abuse in the administration of hormones only, and
that it is not claiming that the Panel erroneously excluded other factors on the basis of its general distinction
between "risk assessment" and "risk management".

misuse or abuse in the administration of the hormones could be considered as part of the "risk
assessment":
Where the condition of observance of good veterinary practice
(which is much the same condition attached to the standards,
guidelines and recommendations of Codex with respect to the use of
the five hormones for growth promotion) is not followed, the logical
inference is that the use of such hormones for growth promotion
purposes may or may not be "safe". The SPS Agreement requires
assessment of the potential for adverse effects on human health
arising from the presence of contaminants and toxins in food. We
consider that the object and purpose of the SPS Agreement justify the
examination and evaluation of all such risks for human health
whatever their precise and immediate origin may be. We do not
mean to suggest that risks arising from potential abuse in the
administration of controlled subs tances and from control problems
need to be, or should be, evaluated by risk assessors in each and
every case. When and if risks of these types do in fact arise, risk
assessors may examine and evaluate them. Clearly, the necessity or
propriety of examination and evalua tion of such risks would have to
be addressed on a case-by-case basis. What, in our view, is a
fundamental legal error is to exclude, on an a priori basis, any such
risks from the scope of application of Articles 5.1 and 5.2. We
disagree with the Panel's suggestion that exclusion of risks resulting
from the combination of potential a buse and difficulties of control is
justified by distinguishing betw een "risk assessment" and "risk
management". As earlier noted, th e concept of "risk management" is
not mentioned in any provision of the SPS Agreement and, as such,
cannot be used to sustain a more restrictive interpretation of "risk
assessment" than is justified by the actual terms of Article 5.2,
Article 8 and Annex C of the SPS Agreement.
1135 (original
emphasis; footnote omitted)
545. Thus, the risks arising from the abuse or mi suse in the administration of hormones can
properly be considered as part of a risk assessment . Where a WTO Member has taken such risks into
account, they must be considered by a panel re viewing that Member's risk assessment. Any
suggestion that such risks cannot form part of a risk assessment would constitute legal error.
546. At the interim review stage, the Panel dismis sed the relevance of the evidence concerning
misuse or abuse in the administration of hormones under Article 5.1 for the following reasons1136:

1136At the interim review stage, the European Commun ities criticized the Panel for referring to misuse
or abuse only in the analysis of whether the European Communities had taken account of the factors listed under
Article 5.2, which the Panel examined at the request of the United States. The European Communities asserted
"that the Panel's discussion of the potential misuse and abuse in the administration of hormones is in the wrong
place, to the extent that this is an aspect of risk assessment, in the sense of Article 5.1 to 5.3 of the
SPS Agreement, that is applicable across all identified potential risks and for all six hormones." (Panel Report,

The Panel agrees with the Europ ean Communities that the question
of misuse and abuse in the administration of hormones may apply to
all six hormones at issue and is an element that can be taken into
account in risk assessment, as set forth in Article 5.2 of the
SPS Agreement and confirmed by the Appellate Body in EC –
Hormones. However, the Panel did not deem it necessary to address
this question in the section regardi ng the conformity with Article 5.1
of the definitive ban on oestradiol-17 β, to the extent that the question
whether misuse or abuse exists in the administration of hormones did
not have an impact on the issues addressed by the Panel under
Article 5.1. Indeed, the question of misuse or abuse in the
administration of hormones is relevant to the extent that it can lead to
higher concentrations of hormone residues in meat and meat products
than would occur if good veterinary practices were applied. As
stated by the 1999 Opinion, it is an aspect of exposure assessment.
In this case, the Panel found that the European Communities had not
evaluated specifically the possibility that the adverse effect[s] that it
had identified in its risk assessment come into being, originate, or
result from the consumption of meat or meat products which contain
veterinary residues of oestradiol-17 β as a result of the cattle being
treated with this hormone for growth promotion purposes. Therefore,
whether the concentrations of hor mone residues in meat and meat
products could be higher as a result of misuse or abuse did not have
to be addressed. The Panel does not deem it necessary to move this
section to another part of its findings.
1137 (footnote omitted)
547. The United States and Canada consider that this statement indicates that the Panel did address
the European Communities' arguments relating to misuse or abuse. 1138 We note that in this statement,
the Panel acknowledges that those risks are "an el ement that can be taken into account in risk
assessment, as set forth in Article 5.2 of the SPS Agreement and confirmed by the Appellate Body in
EC – Hormones." Although the Panel does not seem to reject a priori the relevance of the potential
risks of misuse or abuse, it then states that it was not necessary to address this question in its analysis,
to the extent that it did not have an impact on th e issues addressed by the Panel under Article 5.1.
However, some of the scientific experts consulte d by the Panel indicated that risks arising from
residues of oestradiol-17β in bovine meat are likely to increase where good veterinary practices in the
administration of this hormone are not followed. Indeed, these experts agreed that their conclusions
in relation to the risks posed by oestradiol-17 β were predicated on good veterinary practices being
followed. Accordingly, the abuse or misu se in the administration of oestradiol-17 β has a bearing on
the particular risks being assessed by the European Communities. The Panel's conclusion was thus
premature because the Panel could not have deci ded whether the European Communities failed to
evaluate specifically the possible adver se effects of residues of oestradiol-17 β in meat before

1137Panel Report, US – Continued Suspension , para. 6.164; Panel Report, Canada – Continued
Suspension, para. 6.154.
1138United States' appellee's submission, para. 54; and Canada's response to questioning at the oral
hearing.

considering the evidence on abuse or misuse. The Pa nel's summary dismissal of the relevance of the
evidence on misuse or abuse at the interim revi ew stage gives the appearance of being an ex post
rationalization of an earlier decision to exclude such risks from consideration.
548. The risks of abuse or misuse of the hormon es at issue were examined by the European
Communities as part of its risk assessment. The 1999 Opinion examines the risks arising from
misplaced implants and the consumption of meat from implantation sites, off-label use of the
hormones (such as in animals for which the implant or feed pre-mix is not approved), possible uses of
non-authorized pharmaceutical formulations, and secondary risks for residues of other drugs. 1139 The
1999 Opinion concludes:
it has to be noted that misplaced implants and black market drugs
comprise the risk that extremely high levels of residues of hormones
remain in edible tissues of animals. In addition, it has to be noted
that the contemporaneous use of growth promoting hormones and
veterinary therapeutics drugs incr eases the prevalence of undesirable
r[e]sidues in edible tissues of bovines.
1140
549. The 2002 Opinion also addresses the risks of abuse or misuse. 1141 It refers to a study that
simulated the disregard of good veterinary practi ces and to two studies relating to MGA. The 2002
Opinion concludes:
... these experiments clearly identify a risk for excessive exposure of
consumers to residues from misplaced or off-label used implants and
incorrect dose regimes. In these cases, levels of oestradiol and its
metabolites in muscle, fat, liver and kidney from hormone treated
cattle may be 2-fold up to several hundred folds higher as compared
to untreated meat. The level of increase depends on the treatment
regime and the actual hormone levels in the implants used.
1142
550. In its consultations with the scientific experts, the Panel explored the relevance of the failure
to observe good veterinary practices. The Pane l asked the experts whether identification of
oestradiol-17β as a human carcinogen indicates that ther e are potential adverse effects on human
health when it is consumed in meat from cattle treated with hormones for growth-promotion purposes.

11391999 Opinion, pp. 30-32.
1140Ibid., p. 32.
11412002 Opinion, pp. 11 and 12. The 2002 Opinion also concludes that "[MGA] applied in
concentrations exceeding the licensed doses by a factor of 3 would result in a violation of the tolerance levels as
proposed by US-FDA." (2002 Opinion, p. 11) Similarly, the 2002 Opinion found that "[m]odel calculations
indicated that, depending on the actual implanted total dos e, processing of such inj ection sites can contaminate
tons of (minced) meat or meat products with hormone concentrations violating the ADI/MRL levels as proposed
by JECFA and other regulatory bodies." (Ibid., p. 11)
1142Ibid., pp. 11 and 12.

The experts were also asked whether their answer would depend on whether good veterinary practices
are followed.
1143 Dr. Guttenplan responded:
If potential is taken to mean possible, then an adverse effect cannot
be ruled out, but it is unlikely if good veterinary practices are
followed. If good veterinary practices are not followed, the potential
for adverse effects may be significant.1144
In response to another question on the subject posed by the Panel, Dr. De Brabander recognized that
"[i]mproper administration of implants or misplaced implants create potential hazards to human
health".
1145
551. The European Communities also submitted to th e Panel the final reports of two missions
carried out in the United States and Canada to evaluate their control procedures. 1146 The Panel asked
the scientific experts whether this evidence "call[ed] into question the potential applicability of Codex
standards with regard to imports of meat from cattle treated with hormones from the United States and
Canada.1147 Dr. De Brabander agreed that this evidence was relevant:
The material put forth by the European Communities regarding
misuse or abuse of the hormones at issue in the United States and
Canada calls indeed into question the potential applicability of Codex
standards with regard to imports of meat from cattle treated with
hormones from the United States and Canada.
1148

1143Panel Reports, Annex D, p. D-26, Question 15.
1144Ibid., para. 155. Dr. Cogliano disagreed. In his view, the "answer does not depend on whether
good veterinary practices are followed. It depends on the presence of the hormone in the meat that people
consume". (Ibid., para. 154)
1145Ibid., para. 393. Dr. Boobis also r ecognized the potentia l hazards arising form abuse or misuse,
although his response was qualified:
In my view, the potential hazards from the use of large quantities of the six
hormones in dispute are those dependent on their endocrine activity,
including cancer in hormonally responsive tissues. However, I should stress
that this is their potential hazard. The potential risk, i.e. the probability that
effects would occur, would depend on a number of factors. These include
the magnitude of the exposure, the duration of the exposure and the life
stage of the exposed individual. From the range of exposures likely from
anticipated misuse or abuse the risks are likely to be very low (see
Question 62).
(Ibid., para. 392)
1146See Final Report of a mission carried out in the United States from 19-30 June 2000 in order to
review the systems in place for approval, control and supe rvision of cold stores and the certification of fresh
meat and meat products, DG(Sanco)/1176/2000-MR Final, and Final Report of a mission carried out in Canada
from 19-29 September 2000 in order to evaluate the control of residues in live animals and animal products,
DG(Sanco)/1188/2000-MR final (Exhibits EC-67 and EC-68 submitted by the European Communities to the
Panel).
1147Panel Reports, Annex D, p. D-83, Question 51.
1148Ibid., para. 403.

552. As noted earlier, the relevance of abuse or misuse in the administration of the hormones at
issue was recognized by the Appellate Body in EC – Hormones. The Appellate Body observed that,
"[w]here the condition of observan ce of good veterinary practice (which is much the same condition
attached to the standards, guidelines and recommendations of Codex with respect to the use of the five
hormones for growth promotion) is not followed, the logical inferen ce is that the use of such
hormones for growth promotion purposes may or may not be 'safe'."1149
553. The Panel does not address the evidence on misuse or abuse referred to in the 1999 and 2002
Opinions in its analysis under Article 5.1 of the SPS Agreement. Neither does the Panel discuss the
testimony of the scientific experts that recognized the relevance of this evidence and the potential
adverse effects of the misuse or abuse in the ad ministration of the hormones. The Panel summarily
dismissed the relevance of the evidence on misuse or abuse stating that it relates to exposure
assessment and adding that it is not necessary to address it given the finding that the European
Communities had not evaluated specifically the possibility that the adve rse effects arise from the
consumption of meat from cattle treated with oestradiol-17 β for growth-promotion purposes. We
recognize that the 1999 Opinion examines the risks of misuse or abuse under the heading "Exposure
considerations upon misuse". 1150 After discussing the evidence on misuse and abuse, the 2002
Opinion states that "these data have to be considered in any quantitative exposure assessment
exercise."1151 This, however, cannot justify the Panel's failure to address the evidence on misuse or
abuse. The European Communities made it clear that the risks of abuse or misuse were a relevant
consideration in its risk assessment. This is conf irmed in the 1999 and 2002 Opinions. At least two
of the scientific experts consulted by the Pane l recognized that the misuse or abuse in the
administration of the hormones could give rise to a dverse effects. The Panel had a duty to engage
with this evidence and with the discussion of this evidence in the SCVPH Opinions. By summarily
dismissing the evidence on the misuse or abuse in the administration of the hormones and the
consequent conclusions in the SCVPH Opinions in the manner that it did, the Panel incorrectly
applied Article 5.1 and the definition of "risk assessment" in Annex A of the SPS Agreement , as
interpreted by the Appellate Body.
554. The United States and Canada submit that there are no economic incentives to fail to observe
good veterinary practices by, for example, gi ving higher doses of hormones to the cattle. 1152 This is
something the Panel could have examined, but it di d not. Therefore, it cannot justify the Panel's
inadequate treatment of the issue.

1149Appellate Body Report, EC – Hormones, para. 206. (original emphasis; footnote omitted)
11501999 Opinion, p. 30.
11512002 Opinion, p. 12.
1152Canada's appellee's submission, para. 87; and United States' responses to questioning at the oral
hearing.

555. Accordingly, we find
 that the Panel erred in its interpreta tion and application of Article 5.1 of
the SPS Agreement in relation to risks of misuse and a buse in the administration of hormones to
cattle for growth-promoting purposes.
3. The Panel's Specificity Requirement
556. The European Communities claims that the Panel erred in finding that the European
Communities had acted inconsistently with Article 5.1 of the SPS Agreement by failing to evaluate
specifically the risks arising from residues of oestradiol-17 β in meat from cattle treated with this
hormone for growth promotion. The European Communities argues that "[a]t no stage did the Panel[]
correctly identify what the Appellate Body found to be wanting in the risk assessments carried out for
the purposes of Directive 96/22/EC in the original hormones dispute."1153
557. Relying on the Appellate Body's findings in EC – Hormones , the Panel observed that "a risk
assessment in this instance required not a genera l 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 hormon es had been administered for growth promotion
purposes."1154 The Panel also noted the Appellate Body's finding in Japan – Apples that "a risk
assessment should refer in general to the harm concerned as well as to the precise agent that may
possibly cause the harm" 1155, and its explanation that "an evaluation of risk must connect the
possibility of adverse effects with an antecedent or cause."1156 The Panel concluded:
[T]he European Communities was required to evaluate the possibility
that the identified adverse effect came into being, originated, or
resulted from the presence of residues of oestradiol-17 β in meat or
meat products as a result of the cattle being treated with the hormone
for growth promoting purposes.1157
558. The European Communities alleges that the Panel improperly require d demonstration of
actual effects while the Appellate Body had required mere demonstration of the possibility of adverse
effects.1158 The European Communities' allegation is unfounded. In the statement quoted above, the
Panel focused on the possibility that the adverse effects could arise from the consumption of meat

1154Panel Report, US – Continued Suspension , para. 7.511; Panel Report, Canada – Continued
1155Panel Report, US – Continued Suspension , para. 7.512; Panel Report, Canada – Continued
Suspension, para. 7.484 (referring to Appellate Body Report, Japan – Apples, para. 202). (emphasis omitted)
1156Ibid. (quoting Appellate Body Report, Japan – Apples, footnote 372 to para. 202).
1157Panel Report, US – Continued Suspension , para. 7.513; Panel Report, Canada – Continued
Suspension, para. 7.485.

from cattle treated with oestradiol-17 β. The test articulated by the Panel is compatible with the
definition of the term "risk assessment" in paragraph 4 of Annex A of the SPS Agreement and with
the interpretation developed by the Appellate Body in EC – Hormones. In that dispute, the European
Communities presented a number of scientific studies and opinions of individu al scientists indicating
that the hormones at issue in th at case had "carcinogenic potential". 1159 Yet, the Appellate Body
found that those studies fell short of the require ments of paragraph 4 of Annex A of the SPS
Agreement, because:
The 1987 IARC Monographs and the articles and opinions of
individual scientists submitted by the European Communities
constitute general studies which do in deed show the existence of a
general risk of cancer; but they do not focus on and do not address
the particular kind of risk here at stake—the carcinogenic or
genotoxic potential of the residues of those hormones found in meat
derived from cattle to which the hor mones had been administered for
growth promotion purposes—as is required by paragraph 4 of
Annex A of the SPS Agreement. Those general studies, are in other
words, relevant but do not appear to be sufficiently specific to the
case at hand.
1160
559. The definition of a risk assessment in paragraph 4 of Annex A, as interpreted by the Appellate
Body, required the European Communities to conduc t a risk assessment that addresses the specific
risk at issue. The particular risk being evalua ted by the European Communities in this case was the
potential for neurobiological, developmental, repr oductive, and immunological effects, as well as
immunotoxic, genotoxic and carcinogenic effects 1161 from the residues of oestradiol-17 β found in
meat derived from cattle to which this hormone wa s administered for growth-promoting purposes.
Although the European Communities is correct in ar guing that it was not required to demonstrate that
these adverse health effects would actually arise, it was nevertheless required to demonstrate that
these adverse effects could arise from the presence of residues of oestradiol-17 β in meat from treated
cattle. In our view, this is what the Panel required when it examined whether the European
Communities had "evaluate[d] the possibility that th e identified adverse effect ... resulted from the
presence of residues of oestradiol-17 β in meat or meat products as a result of the cattle being treated
with the hormone for growth promoting purposes."1162

1160Ibid., para. 200.
1161Panel Report, US – Continued Suspension , para. 7.508; Canada – Continued Suspension ,
1162Panel Report, US – Continued Suspension , para. 7.513; Canada – Continued Suspension ,
para. 7.485.

560. The European Communities also argues that the Panel erred by requiring a demonstration of
"direct causality", which the European Communities posits constitutes "a very narrow reading" by the
Panel of the definition of risk assessment in paragraph 4 of Annex A.
1163
561. The Appellate Body explained in Japan – Apples that:
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 reference 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.
1164
562. The particular risk being assessed by the Europ ean Communities is the possibility of adverse
health effects from the consumption of residues of oestradiol-17 β in meat treated with this hormone
for growth promotion. In EC – Hormones , the Appellate Body requi red evaluation of "the
carcinogenic or genotoxic potential of the residues of [the] hormones" 1165 at issue found in meat from
treated cattle. In this case, the European Commun ities had to evaluate whether a causal connection
exists between the consumption of meat from cattle treated with oestradiol-17 β and the possibility of
adverse health effects. This does not mean that the European Communities was required to establish a
direct causal relationship between the possibility of adverse health effects and the residues of
oestradiol-17β in bovine meat. In order to meet the re quirements of Article 5.1 and Annex A of the
SPS Agreement , it was sufficient for the European Commun ities to demonstrate that the additional
human exposure to residues of oestradiol-17 β in meat from treated cattle is one of the factors
contributing to the possible adverse health effect s. The European Communities was not required to
isolate the contribution made by residues of oestradiol-17 β in meat from cattle treated with the
hormone for growth promotion from the contributions made by other sources. 1166 Where multiple
factors may contribute to a particular risk, a risk ass essor is not required to differentiate the individual
contribution made by each factor. Article 5.1 requires that SPS measures be based on a risk
assessment "as appropriate to the circumstances", which suggests that the scientific inquiry involved
in a risk assessment must take due account of particular methodological difficulties posed by the
nature and characteristics of the particular substance and risk being evaluated. However, that does not

1164Appellate Body Report, Japan – Apples, footnote 372 to para. 202.
1166In this respect, we recall that in EC – Hormones , the Appellate Body considered that "there is a
fundamental distinction between added hormones (natural or synthetic) and naturally-occurring hormones in
meat and other foods." ( Ibid., para. 221) It also noted that regulatory action in respect of the latter would
"entail[] such a comprehensive and massive governmental intervention in nature and in the ordinary lives of
people" as to reduce the comparison between these types of hormones "to an absurdity". (Ibid.)

excuse the risk assessor fro m evaluating whether there is a connection between the particular
substance being evaluated and the possibility that adverse health effects may arise.
563. Finally, we are not persuaded by the Eur opean Communities suggestion that the Panel
required testing in humans in order to specifically evaluate the risks associat ed with the consumption
of meat from cattle treated with oestradiol-17 β.1167 We do not see this as a necessary implication of
the Panel's analysis. There is no indication in th e Panel Report to suggest that the evaluation could
not proceed on the basis of experimentation in labo ratory animals and extrapolating the results to
humans, or by other means. Certainly, where a s ubstance may be potentially toxic, requiring a WTO
Member to evaluate specifically the risks through actual human consumption of the substance would
be unethical and would not be "appropriate to the circumstances" within the meaning of Article 5.1.
564. For these reasons, we find that the Panel did not err in requiring a specific evaluation of the
risks arising from the presence of residues of oestradiol-17 β in meat or meat products from cattle
treated with the hormone for growth-promoting purposes.1168
565. The European Communities makes two additional arguments relating to the specificity
requirement. First, the European Communities asserts that the Panel's analysis and the legal test it
used "are simply a cover for allowing the Panel[] to decide what the correct science in [its] view is ,
not on assessing whether the scientific evidence evaluated in the Opinions of the SCVPH focussed on
and addressed 'the particular kind of risk here at st ake—carcinogenic or genotoxic potential of the
residues of those hormones found in meat derived from cattle to which [17 β-oestradiol] had been
administered for growth promotion purposes', as id entified by the Appellate Body in the original
case."1169 Second, the European Communities ar gues that, because the SCVPH Opinions
demonstrated that oestradiol-17 β is a "complete carcinogen by exerting tumour initiating and
promoting effects", "it has to be concluded that no quantitative estimate of risk related to residues in
meat could be presented". 1170 According to the European Co mmunities, "[t]his conclusion alone
demonstrates that the Opinions focussed on and addressed very specifically the particular kind of risk
here at stake—carcinogenic and genotoxic potential of the residues of those hormones found in meat
derived from cattle to which [17 β-oestradiol] had been administered for growth promotion purposes
as identified by the Appellate Body."1171 In our view, both of these arguments relate to the standard of

1168Panel Report, US – Continued Suspension , para. 7.513; Panel Report, Canada – Continued
Suspension, para. 7.485.
1169European Communities' appellant's submission, para. 341. (original emphasis).
1170Ibid., para. 337.
1171Ibid. (original emphasis and footnote omitted)

review applied by the Panel and to the Panel's eval uation of the evidence before it. We address this
aspect of the European Communities' appeal in section VI.D.6.
4. Quantification of Risk

566. Next, we turn to the European Communities' claim that the Panel erred in requiring the
quantification of the risks arising from the consumption of meat containing residues of oestradiol-17β.
The European Communities asserts that, by referring to "potential occurrence" 1172 of adverse effects
when asking questions to the experts, the Panel incorrectly "imposed a quantitative method of risk
assessment on the European Communities borrowed from Codex Alimentarius and JECFA."1173
567. In EC – Hormones, the Appellate Body held that:
What needs to be pointed out at this stage is that the Panel's use of
"probability" as an alternative term for "potential" creates a
significant concern. The ordinary meaning of "potential" relates to
"possibility" and is different from the ordinary meaning of
"probability". "Probability" implies a higher degree or a threshold of
potentiality or possibility. It thus appears that here the Panel
introduces a quantitative dimension to the notion of risk.
1174
(footnote omitted)
568. The Appellate Body further stated that:
It is not clear in what sense the Panel uses the term "scientifically
identified risk." The Panel also fre quently uses the term "identifiable
risk", and does not define this term either. The Panel might arguably
have used the terms "scientifically identified risk" and "identifiable
risk" simply to refer to an ascertainable risk: if a risk is not
ascertainable, how does a Member ever know or demonstrate that it
exists? In one part of its Repor ts, the Panel opposes a requirement of
an "identifiable risk" to the uncer tainty that theoretically always
remains since science can never provide absolute certainty that a
given substance will not ever have adverse health effects. We agree
with the Panel that this theoretical uncertainty is not the kind of risk
which, under Article 5.1, is to be assessed. In another part of its
Reports, however, the Panel appe ared to be using the term
scientifically identified risk" to prescribe implicitly that a certain
magnitude or threshold level of risk be demonstrated in a risk
assessment if an SPS measu re based thereon is to be regarded as
consistent with Article 5.1. To th e extent that the Panel purported to
require a risk assessment to establish a minimum magnitude of risk,
we must note that imposition of such a quantitative requirement finds

1173Ibid., para. 308.

no basis in the SPS Agreement.1175 (original emphasis; footnotes
omitted;)
569. Although the definition of a risk assessment does not require WTO Members to establish a
minimum magnitude of risk, it is nevertheless di fficult to understand the concept of risk as being
devoid of any indication of potentiality. A risk assess ment is intended to identify adverse effects and
evaluate the possibility that such a dverse effects might arise. This distinguishes an ascertainable risk
from theoretical uncertainty. However, the assessm ent of risk need not be expressed in numerical
terms or as a minimum quantification of the level of risk. We are also mindful that the risk
assessment at issue in this case concerns the potential for adverse effects under the second sentence
of paragraph 4 of Annex A and not an evalua tion of likelihood under the first sentence of
paragraph 4.
1176
570. The European Communities' challenge in this cas e is directed at the following question that
the Panel posed to the scientific experts:
The Panel specifically asked the experts whether the [European
Communities] Opinions identified the potential for adverse effects on
human health, including the carcinogenic or genotoxic potential, of
the residues of oestradiol-17 β found in meat derived from cattle to
which this hormone had been administered for growth promotion
purposes in accordance with good veterinary practice and to what
extent the Opinions evaluated the potential occurrence of these
adverse effects.
1177
571. The European Communities does not consider this formulation to be "problematic" as such.
The European Communities argues, however, that if this formulation is understood as requiring a
Member to specify in quantitative term s "to what extent [it] evaluated the potential occurrence of
these adverse effects" 1178, it would lead to an error in law. The European Communities submits that
this is precisely how the Panel addressed the i ssue and how it invited the experts to analyse the
SCVPH Opinions.1179

1175Appellate Body Report, EC – Hormones, para. 186. Similarly, in Australia – Salmon, the Appellate
Body referred to the first sentence of the definition of a "risk assessment" in paragraph 4 of Annex A of the SPS
Agreement, and noted that the SPS Agreement "does not require that the evaluation of the likelihood needs to be
done quantitatively. The likelihood may be expressed either quantitatively or qualitatively." (Appellate Body
Report, Australia – Salmon, para. 124)
1176The Appellate Body found in EC – Hormones that the term "potential" in the second sentence of
paragraph 4 of Annex A refers to the "possibility" of occurrence of adverse eff ects, which implies a lower
degree of potentiality than "probability". (Appellate Body Report, EC – Hormones, para. 184).
1177Panel Report, US – Continued Suspension , para. 7.521; Panel Report, Canada – Continued
Suspension, para. 7.493.
1178European Communities' appellant's submission, para. 344 (quoting Panel Report, US – Continued
Suspension, para. 7.521; and Panel Report, Canada – Continued Suspension, para. 7.493) (original emphasis)
1179Ibid., para. 344. (footnote omitted)

572. As the European Communities acknowledges, "a quantitative dimension may not be
immediately evident from the ordinary mean ing of the words 'potential occurrence'."
1180 T h e t e r m s
"potential occurrence of adverse effects" can be understood as referring to the possibility that the
adverse effects might occur, without necessarily requiri ng that this be expressed in numerical terms.
This would be consistent with the definition of "risk assessment" in paragraph 4 of Annex A of the
SPS Agreement , as interpreted by the Appellate Body. Mo reover, it would be consistent with the
Appellate Body's view that "theoretical uncertainty" 1181 is not the kind of risk to be assessed under
Article 5.1, but rather the risk to be assessed must be an "ascertainable" risk. 1182 In this sense, we
agree with Canada that "to examine the 'potential' for adverse effects is to ask whether those adverse
effects could ever occur".1183
573. Other statements by the Panel confirm that it di d not require that the possibility of the risks
arising be expressed in numerical terms. For exam ple, the Panel took note of the Appellate Body's
finding that a risk assessment can take into account "matters not susceptible of quantitative analysis
by the empirical or experimental laboratory me thods commonly associated with the physical
sciences."1184 The Panel also stated that "it must determine whether the European Communities
evaluated the possibility that the identified adverse effects ca me into being, originated, or resulted
from the presence of residues of oestradiol-17β in meat or meat products as a result of the cattle being
treated with the hormone for growth promotion purposes."1185
574. The European Communities additionally draws a ttention to the Panel's use of the term
"magnitude" in the following statement:
Indeed, whether a Member considers that its population should be
exposed or not to a particular risk, or at what level, is not relevant to
determining whether a risk exists and what its magnitude is. A
fortiori, it should have no effect on whether there is sufficient
evidence of the existence and magnitude of this risk.
A risk-averse Member may be inc lined to take a protective position
when considering the measure to be adopted. However, the
determination of whether scientific evidence is sufficient to assess

1182In Japan – Apples , the Appellate Body cautioned, however, th at "scientific prudence" should "not
be 'completely assimilated'" to such theoretical uncertainty. (Appellate Body Report, Japan – Apples, para. 241)
1183Canada's appellee's submission, para. 107. (original underlining)
1184Panel Report, US – Continued Suspension , para. 7.520; Panel Report, Canada – Continued
1185Panel Report US – Continued Suspension , para. 7.520; Panel Report, Canada – Continued
Suspension, para. 7.492. (emphasis added)

the existence and magnitude of a risk must be disconnected from the
intended level of protection.1186 (emphasis added)
We note that these statements were made by the Panel in its discussion of the consistency of the
European Communities' provisional ban in respect of the other fives hormones and, therefore, was not
made in the context of the Panel's examination of the European Communities' import ban on meat
from cattle treated with oestradiol-17 β. However, we recall that a "risk assessment" involves an
indication of potentiality, even though this need not be expressed in numerical terms or as a minimum
quantification of the level of risk. In this sense, the Panel's reference to "magnitude" is in our view
not sufficient to establish that the Panel incorrectly interpreted Artic le 5.1 and paragraph 4 of Annex
A as requiring a quantitative risk assessment.
575. For these reasons, we consider that the Panel's reference to "potential occurrence" of adverse
health effects could be read cons istently with the definition of a risk assessment in paragraph 4 of
Annex A of the SPS Agreement, as interpreted by the Appellate Body. Accordingly, we dismiss the
European Communities' claim that the Panel incorr ectly interpreted Article 5.1 and paragraph 4 of
Annex A of the SPS Agreement as requiring quantification of risk.
5. Burden of Proof
576. We now examine the European Communities' cl aim that the Panel erred by incorrectly
allocating the burden of proof. The European Co mmunities argues that the fact that it is the
complaining party in this case "does not change th e basic standard on the burden of proof under the
SPS Agreement."1187 According to the European Communities, the Panel "erred in law in shifting the
burden of proof to the European Communities wit hout first examining, provision by provision under
the SPS Agreement as required by Appellate Body, whethe r the arguments of the United States and
Canada had sufficient merits to shift the burden of proof back to the European Communities".1188
577. The United States argues that the Panel was corre ct in initially allocating to the European
Communities the burden of proving its claim that the United States acted inconsistently with
Article 22.8 of the DSU. The United States consider s that the Panel properly found that the European
Communities' claim was premised on an assertion by the European Communities that it had brought
itself into conformity with the SPS Agreement through Directive 2003/74/EC. For this reason, the
Panel was justified in allocating to the Eur opean Communities the burden of establishing a prima
facie case of conformity with the SPS Agreement, including Article 5.1. The United States accepts

 1186Panel Report, US – Continued Suspension , paras. 7.611 and 7.612; Panel Report, Canada –
Continued Suspension, paras. 7.589 and 7.590.
1188Ibid., para. 294.

that, once the Panel found that the European Communities had established such prima facie case, the
burden of proof shifted to the United States. However, the Panel then rightly found that the United
States had rebutted the European Communities' prima facie case of consistency through positive
evidence of breach of the SPS Agreement. On this basis, the United States suggests that "the burden
shifted back and forth between the parties and eventua lly 'neutralized' each other since each party also
submitted evidence in support of its allegations."
1189
578. Canada agrees with the United States that the European Communities has the burden of
proving that it has removed the inconsistent meas ure within the meaning of Article 22.8 of the
DSU.1190 Canada asserts that, in order to demonstrate that the suspension of concessions is no longer
justified, the European Communities must establis h that it has brought its measure into compliance
with Article 5.1 of the SPS Agreement.
579. The Panel explained how it would allocate the burden of proof as follows:
With respect to the violation of Article 22.8 as such, the Panel
considered that it had, in principl e, no reason to address [the] burden
of proof any differently than any other panel established under
Article 6 of the DSU. Indeed, as stated by the Complainant itself,
this case is about a measure taken by [the United States and Canada].
The fact that this dispute takes pl ace in the context of the [European
Communities'] alleged compliance with the recommendations and
rulings of the DSB in the EC – Hormones dispute should have no
impact on the question of the burden of proof regarding the actual
claim before us. This means that the principles identified by the
Appellate Body above apply, and that the European Communities
must prove its claim that [the United States and Canada] breach[]
Article 22.8 of the DSU.
Yet, one of the particularities of this case is that the [European
Communities'] claim of violation of Article 22.8 of the DSU by [the
United States and Canada] is pr emised on the removal of the
European Communities' measure found to be inconsistent with the
SPS Agreement. In other words, in order to demonstrate that [the
United States and Canada have] brea ched Article 22.8, the European
Communities also alleges that its implementing measure is itself in
conformity with the SPS Agreement.
In theory, this should not raise any difficulty in terms of burden of
proof since it is well established that each party has to prove its own
allegations. We agree, however, with the European Communities
that in a case like this one, this c ould generate for the complainant at
the beginning of the proceedings a situation equivalent to having to
"prove a negative", since the spectrum of provisions against which

1189United States' appellee's submission, para. 94 (referring to Panel Report, US – Continued
Suspension, para. 7.386).
1190Canada's responses to questioning at the oral hearing.

the legality of the [European Communities'] measure may have to be
reviewed remains very broad as long as the respondent has not made
its own allegations of inconsiste ncy of the implementing measure.
However, we recall that we found above that the European
Communities enjoyed a presumption of good faith compliance, even
though that presumption was rebuttable before this Panel. As soon as
the European Communities established a prima facie case thanks to
the presumption of good faith compliance, the burden shifted on the
[the United States and Canada] to rebut that presumption. We recall
that "... a prima facie case is one which, in the absence of effective
refutation by the defending party, requires a panel, as a matter of law,
to rule in favour of the complaining party presenting the prima facie
case." We believe that the [United States and Canada] sufficiently
refuted the [European Communities' ] allegation of compliance in
[their] first written submission through positive evidence of breach of
the SPS Agreement by the European Communities. In its subsequent
submissions before the Panel, the European Communities responded
to the allegations of violation made by [the United States and
Canada]. Thus, the European Communities never actually had to
"prove a negative" in this case.
While the presumptions based on good faith enjoyed by each party
may have played a role in the burden of proof in the early stage of the
Panel proceedings, it is the opinion of the Panel that they eventually
"neutralized" each other since each party also submitted evidence in
support of its allegations. Ultimately, each party had to prove its
specific allegations in response to the evidence submitted by the
other party. Thereafter, when c onsidering whether an allegation had
been proven or not, the Panel followed the practice of other panels to
weigh all the evidence before it.
1191 (original emphasis: footnotes
omitted)
580. In section IV, we explained that this case involves a disagreement as to the consistency of a
measure taken to comply and, therefore, should ha ve properly been brought under Article 21.5 of the
DSU. We also explained how the burden of proof should have been allocated had the dispute been
brought under Article 21.5. Although these proceedi ngs were not brought under Article 21.5, the
Panel said that it "perform[ed] functions si milar to those of an Article 21.5 panel". 1192 The European
Communities had to provide a clear description of its implementing measure, and an adequate
explanation regarding how this measure rectifies the inconsistencies found in the original proceedings,
so as to have placed the Panel in a position to make an objective assessment of the matter and, in the
absence of rebuttal, to rule in fa vour of the original respondent. Therefore, to the extent the Panel did
not allocate the burden of proof in its analysis of whether Directive 2003/74/EC met the requirements

1191Panel Report, US – Continued Suspension , paras. 7.383-7.386; Panel Report, Canada – Continued
Suspension, paras. 7.380-7.383.
1192Panel Report, US – Continued Suspension , para. 7.376; Panel Report, Canada – Continued
Suspension, para. 7.373.

of Article 5.1 of the SPS Agreement according to the principles outlined above, we find that the
Panel has erred.
581. We have, moreover, several additional concerns with the Panel's analysis. First, as we
indicated in section IV, we do not believe that it w as sufficient for the European Communities to have
based its case under Article 22.8 on a presumption of good faith. The European Communities may be
presumed to have acted in good faith in adopting Directive 2003/74/EC, but this does not respond to
the question as to whether Directive 2003/74/EC achieved substantive compliance. Thus, it was
incorrect for the Panel to have relied on a presumption of good faith compliance for purposes of
determining the allocation of the burden of proof and finding that the European Communities
established a prima facie case.
582. Secondly, we have difficulty following the re asoning behind the Panel's conclusion that the
presumptions of good faith enjoyed by each party "eventually 'neutralized' each other" and that
"[u]ltimately, each party had to prove its specific a llegations in response to the evidence submitted by
the other party."
1193 The statement is ambiguous about whic h party made which allegation and how
the burden of proof was allocated. In the section in which the Panel describes the scope of its review
and circumscribes its terms of reference, the Panel states that, in submissions subsequent to the first
written submission, "the European Communities h as argued the compatibility of its implementing
measure with the provisions referred to in the quot ation above (i.e. Article[s] 5.1 and 5.7 of the SPS
Agreement)".1194 However, a few paragraphs later, the Panel refers to the allegation of incompatibility
with Article 5.1 of the SPS Agreement as an allegation made by the United States and Canada. 1195
Thus, it is difficult to understand which party had the burden of proving which allegation.
583. Thirdly, we note the Panel's statement that th e United States and Canada "sufficiently refuted
the [European Communities'] allegation of complia nce in [their] first written submission through
positive evidence of breach of the SPS Agreement by the European Communities". 1196 T h i s
statement is made before the Panel has undert aken any analysis of the conformity of
Directive 2003/74/EC with Article 5.1 of the SPS Agreement . In its appellant's submission, the
European Communities takes issue with this statem ent and argues that the Panel should have first
examined "provision by provision ... whether the arguments of the United States and Canada had

1193Panel Report, US – Continued Suspension , para. 7.386; Panel Report, Canada – Continued
Suspension, para. 7.383.
1194Panel Report, US – Continued Suspension , para. 7.400; Panel Report, Canada – Continued
Suspension, para. 7.397.
1195Panel Report, US – Continued Suspension , para. 7.405; Panel Report, Canada – Continued
Suspension, para. 7.398.
1196Panel Report, US – Continued Suspension , para. 7.385; Panel Report, Canada – Continued
Suspension, para. 7.382.

sufficient merits to shift the burden of proof back to the European Communities".1197 We agree that it
was premature for the Panel to have stated th at the United States and Canada had succeeded in
refuting the European Communities' allegation of compliance before the Panel had addressed the
consistency of Directive 2003/74/EC with the SPS Agreement.
584. Accordingly, we find that the Panel erred in the allocation of the burden of proof in its
assessment of the consistency of Directiv e 2003/74/EC with Article 5.1 of the SPS Agreement. We
discuss the consequences of this error in section E below.
6. The Panel's Articulation and Applicati on of the Standard of Review under
Article 5.1 of the SPS Agreement
585. We turn next to the European Communities' clai m that the Panel erred in the standard that it
applied to review whether Directive 2003/74/EC w as based on a risk assessme nt within the meaning
of Article 5.1 of the SPS Agreement . The European Communities argues that the Panel sought to
determine "what the correct scientific conclusions are" 1198 in relation to the hormones at issue. The
European Communities adds that, instead of dete rmining whether "there was any reputable support
within the relevant scientific community for the determination made by the European Communities in
the light of its chosen level of protection" 1199, the Panel decided "to become the jury on the correct
science ... by picking and choosing between conflicting and contradictory opinions of the experts in
an arbitrary manner." 1200 As a result, the Panel impermissibly engaged in a de novo review of the
European Communities' risk assessment, and failed to take into account diverging views among the
experts reflecting a "genuine and legitimate scientific controversy" 1201 concerning three particular
issues: exposure of humans to hormones fro m multiple endogenous and exogenous sources;
genotoxicity of oestradiol-17β; and specificity or direct causality.1202
586. The United States and Canada consider that the Panel identified and applied the correct
standard of review to the facts before it, and ma intain that the Panel did not exceed the bounds of its
discretion as the trier of facts when assessing th e weight and determining the credibility to be
attributed to the opinions of the scientific experts.
587. We discuss our views on the applicable standard of review before turning to our examination
of the Panel's assessment of Directive 2003/74/E C. The European Comm unities claims that the

1198Ibid., para. 240.
1199Ibid.
1200Ibid., para. 239. (emphasis added)
1201Ibid., para. 248.
1202Ibid.

appropriate standard of review is one which limits a panel's mandate to determining whether there is
any "reasonable scientific basis" for the SPS measure.
1203 The United States and Canada object to
such a standard. We recall that in EC – Hormones , the Appellate Body rejected the European
Communities' argument that a "deferential 'reas onableness' standard" is applicable under the SPS
Agreement to "all highly complex factual situations, in cluding the assessment of the risks to human
health arising from toxins and contaminants". 1204 The Appellate Body cautioned that the applicable
standard of review "must reflect the balance established in [the SPS Agreement ] between the
jurisdictional competences conceded by the Member s to the WTO and the jurisdictional competences
retained by the Members for themselves" and concluded that Article 11 of the DSU "articulates with
great succinctness but with sufficient clarity the appropriate standard of review for panels"
1205
reviewing the assessment of facts under the SPS Agreement.
588. Article 11 of the DSU states, in relevant part:
[A] panel should make an objective assessment of the matter before
it, including an objective assessment of the facts of the case and the
applicability of and conformity with the relevant covered agreements.
589. The Appellate Body has observed that, so far as fact-finding by panels is concerned, the
applicable standard is "neither de novo review as such, nor 'total deference', but rather the 'objective
assessment of facts'".
1206 It further explained that, while panels are "poorly suited to engage in [a de
novo] review", "'total deference to the findings of the national authorities' ... 'could not ensure an
"objective assessment" as foreseen by Article 11 of the DSU'."1207
590. A panel reviewing the consistency of an SPS measure with Article 5.1 must determine
whether that SPS measure is "based on" a risk assessmen t. It is the WTO Member's task to perform
the risk assessment. The panel's task is to review that risk assessment. Where a panel goes beyond
this limited mandate and acts as a risk assessor, it would be substituting its own scientific judgement
for that of the risk assessor and making a de novo review and, consequently, would exceed its
functions under Article 11 of the DSU. Therefore, the review power of a panel is not to determine
whether the risk assessment undertaken by a WTO Member is correct, but rather to determine whether
that risk assessment is supported by coherent reas oning and respectable scientific evidence and is, in
this sense, objectively justifiable.

1204Appellate Body Report, EC – Hormones, paras. 113 and 114.
1205Ibid., paras. 115 and 116.
1206Ibid., para. 117.
1207Ibid. (quoting Panel Report, US – Underwear, para. 7.10).

591. The Appellate Body has observed that a WTO Member may properly base an SPS measure on
divergent or minority views, as long as these views are from qualified and respected sources. 1208 This
must be taken into account in defining a panel's st andard of review. Accordingly, a panel reviewing
the consistency of an SPS measure with Article 5.1 of the SPS Agreement must, first, identify the
scientific basis upon which the SPS measure was adopted . This scientific basis need not reflect the
majority view within the scientific community but may reflect divergent or minority views. Having
identified the scientific basis underlying the SPS meas ure, the panel must then verify that the
scientific basis comes from a respected and qualified source. Although the scientific basis need not
represent the majority view within the scientific community, it must nevertheless have the necessary
scientific and methodological rigour to be considered reputable science. In other words, while the
correctness of the views need not have been accep ted by the broader scientific community, the views
must be considered to be legitimate science accord ing to the standards of the relevant scientific
community. A panel should also assess whether the reasoning articulated on the basis of the scientific
evidence is objective and coherent. In other word s, a panel should review whether the particular
conclusions drawn by the Member assessing the risk find sufficient support in the scientific evidence
relied upon. Finally, the panel must determine whet her the results of the risk assessment "sufficiently
warrant" the SPS measure at issue. 1209 Here, again, the scientific basis cited as warranting the SPS
measure need not reflect the majority view of the scientific community provided that it comes from a
qualified and respected source.
592. A panel may and should rely on the advice of experts in reviewing a WTO Member's SPS
measure, in accordance with Article 11.2 of the SPS Agreement and Article 13.1 of the DSU. In
doing so, however, a panel must respect the due process rights of the parties. 1210 Moreover, a panel
may not rely on the experts to go beyond its limite d mandate of review. The purpose of a panel
consulting with experts is not to pe rform its own risk assessment. The role of the experts must reflect
the limited task of a panel. The panel may seek the experts' assistance in order to identify the
scientific basis of the SPS measure and to verify that this scientific basis comes from a qualified and
respected source, irrespective of whether it represents minority or majority scientific views. It may
also rely on the experts to review whether the reasoning articulated on the basis of the scientific
evidence is objective and coherent, and whether th e particular conclusions drawn by the Member
assessing the risk find sufficient support in the evid ence. The experts may also be consulted on the
relationship between the risk assessment and the SPS measure in order to assist the panel in
determining whether the risk assessment "sufficien tly warrants" the SPS measure. The consultations

1209Ibid., para. 193.
1210See supra, section V.

with the experts, however, should not seek to te st whether the experts would have done a risk
assessment in the same way and would have reached the same conclusions as the risk assessor. In
other words, the assistance of the experts is cons trained by the kind of review that the panel is
required to undertake.
593. In this case, the Panel correctly identified Artic le 11 of the DSU as setting out the standard of
review applicable to its examination of the consistency of the European Communities' risk assessment
with Article 5.1 of the SPS Agreement.
1211 The Panel also referred to the guidance provided by the
Appellate Body in EC – Hormones concerning the standard of review. 1212 Moreover, the Panel made
reference to the interpretation of Article 5.1 of the SPS Agreement developed by the Appellate Body
in EC – Hormones and acknowledged that a risk assessment ma y be based on divergent or minority
views.1213
594. Next, the Panel referred to its consultations with scientific experts, noting that it had
consulted six scientific experts individually, and not as an expert review group. The Panel stated that:
Although the Panel is not carrying out its own risk assessment, its
situation is similar in that it may benefit from hearing the full
spectrum of experts' views and thus obtain a more complete picture
both of the mainstream scientific opinion and of any divergent
views.
1214
595. The analogy that the Panel draws between its situation and that of a risk assessor is
unfortunate, but is not in itself a sufficient indication that the Panel incorrectly understood the
applicable standard of review. We do not think th at the Panel meant to suggest that it saw its task
under Article 5.1 as requiring it to perform a risk as sessment. At the beginning of the statement, the
Panel expressly recognizes that it "is not carrying out its own risk assessment".
596. The Panel then elaborated on the approach it w ould take in respect of the testimony of the
experts:
We note that, in some circumstances, only one or two experts have
expressed their views on an issue. Sometimes these views were
similar or complemented each other. In other circumstances, a larger
number of experts expressed opinions and, sometimes, they
expressed diverging opinions. While, on some occasions, we

1211Panel Report, US – Continued Suspension , para. 7.413; Panel Report, Canada – Continued
Suspension, para. 7.404.
1212Panel Report, US – Continued Suspension , paras. 7.414-7.416; Panel Report, Canada – Continued
Suspension, paras. 7.405-7.407.
1213Panel Report, US – Continued Suspension , para. 7.417; Panel Report, Canada – Continued
1214Panel Report, US – Continued Suspension , para. 7.418; Panel Report, Canada – Continued
Suspension, para. 7.409.

followed the majority of experts expressing concurrent views, in
some others the divergence of views were such that we could not
follow that approach and decide d to accept the position(s) which
appeared, in our view, to be the most specific in relation to the
question at issue and to be best supported by arguments and
evidence.
1215 (footnotes omitted)
597. The European Communities submits that "the ma jority view is not probative simply because
it represents the majority".1216 We agree that automatically giving more weight to the testimony of the
majority of experts would be too rigid an approach. The fact that a majority in the spectrum of the
scientific experts consulted by the Panel had a particular view is not a proper basis for determining
whether a WTO Member's risk assessment complies with the requirements of Article 5.1 and
Annex A of the SPS Agreement.
598. Looking at the Panel's analysis of whethe r the European Commun ities specifically assessed
the risks arising from the consumption of m eat from cattle treated with oestradiol-17 β, we note that a
significant portion of the Panel's reasoning consists of summaries of the responses of the experts. It is
only after summarizing the experts' responses that the Panel describes some of the issues discussed in
the 1999 Opinion. Given the applicable standard of review and the role of the Panel that is
determined by it, the Panel's analysis should have proceeded differently. The Panel should have first
looked at the European Communities' risk assessment. It should then have determined whether the
scientific basis relied upon in that risk assessment came from a respected and qualified source. The
Panel should have sought assistance from the scien tific experts in confirming that it had properly
identified the scientific basis underlying the Europe an Communities' risk assessment or to determine
whether that scientific basis originated in a resp ected and qualified source. The Panel should also
have sought the experts' assistance in determining whether the reasoning articulated by the European
Communities on the basis of the scientific evidence is objective and coherent, so that the conclusions
reached in the risk assessment sufficiently warrant the SPS measure. Instead, the Panel seems to have
conducted a survey of the advice presented by the scientific experts and based its decisions on
whether the majority of the experts, or the opinion that was most thoroughly reasoned or specific to
the question at issue, agreed with the conclusion drawn in the European Communities' risk
assessment. This approach is not consistent with the applicable standard of review under the SPS
Agreement.

1215Panel Report, US – Continued Suspension , para. 7.420; Panel Report, Canada – Continued
Suspension, para. 7.411. At the interim stage, the Panel further explained that "in case of divergence of opinions
between the experts, and having due regard to the comments of the parties and the clarifications provided by the
experts at the meeting with the Panel, it was a sound appr oach to take into account, in forming its own opinion,
the opinions that were the most pr ecise and elaborate." (Panel Report, US – Continued Suspension , para. 6.72;
Panel Report, Canada – Continued Suspension, para. 6.67).

599. The Panel's flawed approach is evident in its analysis of the genotoxicity of oestradiol-17 β,
one of the central issues in the Eu ropean Communities' risk assessment.
1217 The 1999 Opinion refers
to several studies that investigated the genotoxicity of oestradiol. 1218 It also states that certain
metabolites of oestradiol-17β "have been found to be directly or indirectly genotoxic" and that "[t]his
implies that 17- β oestradiol may act as tumor initiator as well as tumor promoter". 1219 T h e 1 9 9 9
Opinion goes on to state that "[t]his implies that any excess exposure towards 17- β oestradiol and its
metabolites resulting from the consumption of meat and meat products presents a potential risk to
public health in particular to those groups of the population which have been identified as particularly
sensitive such as prepubertal children". 1220 Finally, the 1999 Opinion explains that a threshold cannot
be established for these genotoxic metabolites. 1221 The European Communities explained that a
"threshold" is the "level below which intakes from residue should be considered to be safe." 1222
600. The genotoxicity of oestradiol-17β is also examined in the 2002 Opinion, which concludes:
Convincing data have been publis hed confirming the mutagenic and
genotoxic potential of 17 β-oestradiol as a consequence of metabolic
activation to reactive quinines. In vitro experiments indicated that
oestrogenic compounds might alter the expression of an array of
genes.1223 (original emphasis)
601. Following the approach that we outlined earlier regarding the applicable standard of review,
the first step in the Panel's analysis should have been to identify what in the European Communities'
risk assessment was the scientific basis for the conclusions on the genotoxicity of oestradiol-17 β;
verify whether this scientific basis came from a respected and qualified source; and determine
whether the reasoning articulated on the basis of that scientific evidence is objective and coherent. As
a second step, the Panel should have pursued a sim ilar inquiry concerning the conclusion that the
genotoxicity of oestradiol-17 β did not permit the establishment of a threshold, as the European
Communities submits. In that context, the Panel w ould have sought the experts' view as to whether
the conclusions reached by the European Comm unities can find support in the scientific evidence
relied upon by the European Communities (even if the expert in question was of a different scientific
view).

1217The United States characterizes the issue of ge notoxicity as a "central underpinning" of the
European Communities' risk assessment relating to oestradiol-17 β. (Panel Report, US – Continued Suspension,
para. 7.543)
12181999 Opinion, pp. 39-41.
1219Ibid., p. 75.
1220Ibid.
1221Ibid.
1222Panel Report, US – Continued Suspension, para. 4.238. See also Panel Report, Canada – Continued
Suspension, footnote 259 to para. 6.88.
12232002 Opinion, p. 21.

602. Rather than turning first to the European Communities' risk assessment in order to identify the
scientific basis for the conclusions on the genotoxicity of oestradiol-17 β, the Panel begins with a
survey of the views of the scientific experts on this issue in general. The Panel tries to justify its
approach on its inability to evaluate the evidence itself:
The Panel is not in a position to evaluate the scientific data the
SCVPH reviewed in drawing its c onclusions. For this reason, the
Panel consulted a group of scientif ic experts and asked them to
evaluate the [European Communities'] Opinions as well as the
underlying science.1224
However, under the applicable standard of review, neither the Panel nor the experts it consulted were
called upon to evaluate the correctness of the Euro pean Communities' risk assessment. The Panel's
role was more limited and consisted, as we explai ned earlier, of identifying the scientific basis and
evidence relied upon in the risk assessment; verifying that th e scientific evidence comes from
respected and qualified sources; and determining whet her the reasoning articulated by the European
Communities on the basis of the scientific evidence is objective and coherent.
603. The summary of the experts' opinions, which c onstitutes the lengthiest portion of the Panel's
reasoning, often appears to be a general discussion as to whether the genotoxicity of oestradiol-17 β is
widely accepted by the broader scientific community, rather than a discussion of the evidence relied
upon in the European Communities' risk assessment . The Panel concludes that the "scientific
evidence referred to in the Opinions does not suppor t the European Communities' conclusion that for
oestradiol-17β genotoxicity had already been demonstrated explicitly." 1225 The Panel's conclusion
appropriately focuses on the scientific evidence in th e SCVPH Opinions. Yet, the Panel's reasoning
reveals several flaws. First, some of the experts seemed to accept th e European Communities'
position on the genotoxicity of oestradiol-17 β. For example, the Panel quotes the following opinion
of Dr. Cogliano in its reasoning:
Dr. Cogliano explained that "the [European Communities'] statement
that a threshold cannot be identified reflects their view of genotoxic
mechanisms, just as the contrary st atement that there is a threshold
and that this threshold is above the levels found in meat residues
reflects how Canada and the [U nited States] view genotoxic
mechanisms. Neither statement has been demonstrated by the

1224Panel Report, US – Continued Suspension , para. 7.553; Panel Report, Canada – Continued
Suspension, para. 7.521.
1225Panel Report, US – Continued Suspension , para. 7.572; Panel Report, Canada – Continued
Suspension, para. 7.540 (referring to 1999 Opinion, p. 75).

scientific evidence, rather, they ar e different assumptions that each
party uses in their interpretation of the available evidence."
1226
604. The Panel also refers to the following testimony of Dr. Cogliano:
Dr. Cogliano stated in his written re sponses that the identification of
oestradiol-17β as a human carcinogen indicates that there are
potential adverse effects on human health when oestrodiol-17 β is
consumed in meat from cattle treated with hormones for growth
promotion purposes. At the meeting with the Panel, Dr. Cogliano
clarified that the IARC has classified oestradiol-17 β as possibly
carcinogenic based on sufficient eviden ce in experimental animals.
The agents that are known to be carcinogenic in humans are the
steroidal oestrogens, non-steroidal oestrogens, and various oestrogen-
progestin combinations as used either as birth-control pills or
menopausal therapy.
1227
605. The Panel should have addressed whether Dr. C ogliano's statements provided evidence that
the European Communities' position on the genotoxicity of oestradiol-17 β had some acceptance in the
scientific community, even if it did not constitute the majority view. At the interim review, the Panel
rejected the relevance of Dr. Cogliano's statement, explaining that "the SPS Agreement requires an
analysis that goes beyond the identification of a potential adverse effect". 1228 According to the Panel,
"[t]he analysis must include an examination of the pot ential for that adverse affect to come into being,
originate, or result from the presence of the specifi c substance under review in food, beverages, or
feedstuffs, in this case oestradiol-17 β in meat and meat products deri ved from cattle treated with the
hormone for growth promotion purposes."
606. There is no indication in the Panel's reasoni ng about how to reconcile Dr. Cogliano's
statements with the Panel's conclusion that the scientific evidence in the SCVPH Opinions do not
support the European Communities' conc lusions that "for oestradiol-17 β genotoxicity had already
been demonstrated explicitly" or that th e "presence of residues of oestradiol-17 β in meat and meat
products as a result of the cattle being treated with the hormone for growth promotion purposes leads
to increased cancer risk."1229

1226Panel Report, US – Continued Suspension , para. 7.559; Panel Report, Canada – Continued
Suspension, para. 7.527 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 186).
1227Panel Report, US – Continued Suspension , para. 7.561; Panel Report, Canada – Continued
Suspension, para. 7.529 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 154, and transcript of the Panel meeting with the scientific experts, Panel Reports,
Annex G, para. 327).
1228Panel Report, US – Continued Suspension , para. 6.118; Panel Report, Canada – Continued
Suspension, para. 6.110.
1229Panel Report, US – Continued Suspension , para. 7.572; Panel Report, Canada – Continued
Suspension, para. 7.540. (footnote omitted)

607. The genotoxicity of oestradiol-17 β also comes up in connection with the European
Communities' conclusion that a threshold c ould not be established for oestradiol-17 β. As with
genotoxicity, the risk assessment would need to provi de a scientific basis for the conclusion that a
threshold could not be established for oestradiol-17 β. The Panel does not identify what was the
scientific basis for this conclusion, as it should have done. Rather, the Panel's reasoning reproduces
the views of the experts on the issue of genotoxicity , with some of them mentioning the distinction
between in vivo and in vitro genotoxicity. The discussion se eks to establish whether the
genotoxicity in vivo of oestradiol-17β had been accepted by the general scientific community, rather
than whether the European Communities' risk assessment provided scientific evidence of the
genotoxicity in vivo of oestradiol-17β and whether this evidence came from a respected and qualified
source. For example, the Panel relies on the following opinion provided by Dr. Boobis:
Dr. Boobis concluded that there is no good evidence that oestradiol is
genotoxic in vivo or that it causes cancer by a genotoxic mechanism.
Indeed the evidence is against this . Hence, the scientific evidence
does not support the European Comm unities' position that the levels
of the hormones in meat from treated cattle are not of relevance.1230
608. Dr. Boisseau's response also goes beyond a verification of whether the European
Communities' evidence on genotoxicity came from a respected and qualified source, into an
examination of the general acceptance of the scien tific basis of the European Communities' risk
assessment:
In a review of the scientific literature and the 1999 report of the
Committee for Veterinary Medicinal Products of the European
Medicine Agency, Dr. Boisseau concluded that the demonstration
remains to be made that the observed indicator effects are
representative of mutagenesis at the gene or chromosome level and
also occur in somatic cells in vivo. This is not likely in the view of
the following: earlier studies had mostly indicated that hormones do
not induce micronuclei or other chromosomes aberration types in
vivo. With the exception of the study reported by Dhillon and
Dhillon, the recent data confirm the earlier findings and clearly
indicate that hormones and/or their synthetic analogues are not
associated with genotoxicity properties in the bone marrow
micronucleas assay in vivo.
1231
609. At the same time, the Panel fails to expl ain how it reconciled its conclusion with the
testimony of other experts that appear to ac knowledge that the European Communities' risk

1230Panel Report, US – Continued Suspension , para. 7.562; Panel Report, Canada – Continued
Suspension, para. 7.530 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 184).
1231Panel Report, US – Continued Suspension , para. 7.563; Panel Report, Canada – Continued
Suspension, para. 7.531 (referring to replies of the scientific experts to questions posed by the Panel, Panel
Reports, Annex D, para. 136).

assessment was based on evidence of genotoxicity in vivo of oestradiol-17β. In his written responses
to questions by the Panel, Dr. Guttenplan referred to a study, cited by the European Communities,
allegedly indicating that the reactive metabolite oe stradiol-3, 4-quinone i nduces mutations in mice
skin in vivo.
1232 Dr. Guttenplan testified that "[t]he catechol oestrogen-quinone form DNA adducts in
cultured cells and in mouse skin", and concluded that "[t]his evidence was stronger compared to
previous reports" , adding that "the evidence now is much stronger."
1233 The Panel further explained,
in the interim review, that it did "not read th is statement as implying that the residues of
oestradiol-17β in meat from treated cattle are definitely genotoxic". 1234 The Panel added that, "even if
this were the case, the issue of genotoxicity is only relevant to the issue of whether a threshold could
be determined for this substance."1235
610. We reiterate that the Panel was not called upon to determine whether there is general
acceptance that oestradiol-17 β is genotoxic in vivo or that it causes cancer by a genotoxic
mechanism. Instead, the focus should have b een on the evidence relied upon by the European
Communities in its risk assessment. As we noted earlier, the 1999 Opinion refers to several studies on
the genotoxicity of oestradiol-17 β.1236 Additional studies are discussed in the 2002 Opinion. 1237
These studies should have been the focus of the Pane l's analysis, yet they are not mentioned in the
Panel's analysis. The Panel does not give any reasons why it did not consider them relevant.
611. The European Communities' risk assessment also focused on the endogenous levels of
hormones in pre-pubertal children and observed th at these levels were lower than previously
thought.1238 Dr. Guttenplan seemed to accept the European Communities' position on this issue:
Dr. Guttenplan found that the levels in meat could result in
bioavailable oestrogen exceeding the daily production rate of
oestradiol in pre-pubertal children. "For pre-pubertal children, even
with the low bioavailabilty of estroge n ... and its low levels in meats,
it appears possible that intake leve ls would be within an order of
magnitude of those of the daily produc tion rate. This is greater than
FDA's [(Food and Drug Administration of the United States)] ADI
and suggests some risk to this population. If there [are] genotoxic
effects of estradiol in children, they may be reflected over a lifetime,
as mutations arising from DNA damage are permanent. It seems the
more accurate methods of analysis could now be used to measure the
effect of eating hormone-treated beef on blood levels of estrogen in

1232Replies of the scientific experts to questions posed by the Panel, Panel Reports, Annex D, para. 181.
1233Ibid.
1234Panel Report, US – Continued Suspension, para. 6.113; Panel Report, Canada – Continued
Suspension, para. 6.105.
1235Ibid.
12361999 Opinion, pp. 39-41.
12372002 Opinion, pp. 13 and 14.
12381999 Opinion, p. 38.

children and post-menopausal women. If practical, this experiment
would be important in establishing or refuting the arguments of the
[European Communities]."1239
The Panel does not address this statement furthe r nor does the Panel explain how Dr. Guttenplan's
conclusion should be reconciled w ith the Panel's conclusion that the European Communities' risk
assessment did not examine the specific risks arising from the consumption of meat from cattle treated
with oestradiol-17β.
612. We have identified above how the Panel appro ached its task without proper regard to the
standard of review and the limitations this places upon the appraisal of expert testimony. Ultimately,
the Panel reviewed the scientific experts' opini ons and somewhat peremptorily decided what it
considered to be the best science, rather than following the more limited exercise that its mandate
required. In addition, the European Communities has drawn our attention to the following response
provided by Dr. Guttenplan to the Panel's question on the specificity of th e European Communities'
risk analysis:
I believe the [European Communitie s] has done a thorough job in
identifying the potential for adve rse effects on human health of
oestradiol-17β found in meat derived from cattle to which this
hormone had been administered. They have identified a number of
potential adverse effects of oestradiol-17 β in humans. They have
established metabolic pathways relevant to these effects, and have
examined mechanisms of these effe cts. In addition they have
performed thorough studies of resi due levels in cattle, and the
environment. The evidence eval uating the occurrence of adverse
effects is weak. Animal models are very limited and the target
organs do not coincide well with th e target organs in humans. There
are basically no epidemiological studies comparing matched
populations consuming meat from untreated and hormone-treated
cattle. Thus, little can be inferred about the potential occurrence of
the adverse effects, the potential for adverse effects seems
reasonable.
1240
613. In his response, Dr. Guttenplan seems to re cognize that the European Communities' risk
assessment did specifically examine the potential fo r adverse effects from the consumption of meat
from cattle treated with oestradiol-17 β. Dr. Guttenplan's response is summarized in the Panel's
reasoning.1241 Yet, the Panel does not address that respon se any further. Given that the European

1239Panel Report, US – Continued Suspension, para. 7.528; Panel Report, Canada – Continued
Suspension, para. 7.500 (quoting replies of the scientific experts to Question 52 posed by the Panel, Panel
Reports, Annex D, para. 413.
1240Replies of the scientific experts to questions posed by the Panel, Panel Reports, Annex D,
para. 145).
1241Panel Report, US – Continued Suspension , para. 7.523; Panel Report, Canada – Continued
Suspension, para. 7.495.

Communities was entitled to rely on minority views, the Panel was required to explain why it did not
consider that Dr. Guttenplan's testimony supported the European Communities' position.
614. An additional flaw in the Panel's reasoning re lates to the following remark at the end of
Panel's summary of the experts' responses:
Additionally, in response to direct questioning during the Panel
meeting with the experts, Drs. Boobis, Boisseau, and Guttenplan all
agreed that there is no appreciable risk of cancer from residues of
oestradiol-17β in meat and meat products from cattle treated with the
hormone for growth promotion purpo ses. While all the experts who
responded to the question agreed that a zero risk could not be
guaranteed, the actual level of risk was in their view so small as to
not be calculable.
1242
It was not the Panel's task, much less that of the experts that the Panel consulted, to determine whether
there is an appreciable risk of cancer arising fro m the consumption of meat from cattle treated with
oestradiol-17β. Instead, the Panel was called upon to review the European Communities' risk
assessment.
615. The United States and Canada argue that the Pa nel properly exercised its discretion as the
trier of facts.1243 We have found that the Panel did not appl y the proper standard of review. This is a
legal error and does not fall within the authority of th e Panel as the trier of facts. Moreover, we have
found instances in which the Panel exceeded its aut hority in the assessment of the testimony of the
scientific experts. By merely reproducing testim ony of some experts that would appear to be
favourable to the European Communities' position, without addressing its significance, the Panel
effectively disregarded evidence that was potentially relevant for the Europ ean Communities' case.
This cannot be reconciled with the Panel's duty to ma ke an "objective assessment of the facts of the
case" pursuant to Article 11 of the DSU.
616. For these reasons, we find that the Panel failed to conduct an objective assessment of the facts
of the case, as required by Article 11 of the DSU, in determining whether the European Communities'
risk assessment satisfied the requirements of Article 5.1 and Annex A of the SPS Agreement.
F. Conclusion
617. We recall that we have found above that the Panel erred in its interpretation and application of
Article 5.1 in relation to risks of misuse and a buse in the administration of hormones to cattle for

1242Panel Report, US – Continued Suspension , para. 7.569; Panel Report, Canada – Continued
Suspension, para. 7.537 (referring to the transcript of the Panel meeting with the scientific experts, Panel
Reports, Annex G, paras. 707-742).
1243United States' appellee's submission, para. 47; Canada's appellee's submission, para. 73.

growth-promoting purposes. We have also found th at the Panel misallocated the burden of proof, and
failed to conduct an objective assessment of the f acts, in its analysis of whether the European
Communities' risk assessment met the requirements of Article 5.1 of the SPS Agreement.
618. In addition, we found earlier that the Panel has infringed the European Communities' due
process rights by inappropriately relying on the testimony of Drs. Boisseau and Boobis in its
evaluation of the consistency with Article 5.1 of the SPS Agreement of the European Communities'
risk assessment relating to oestradiol-17 β. Thus, the Panel's conclusions rest, to a large extent, on an
improper evidentiary basis.
619. Accordingly, we reverse
 the Panel's finding that the European Communities has not satisfied
the requirements of Article 5.1 and Annex A, paragraph 4, of the SPS Agreement. As a consequence,
we also reverse the Panel's findings that Directive 2003/74/ EC was not based on a risk assessment
within the meaning of Article 5.1 of the SPS Agreement and that the European Communities'
"implementing measure on oestradiol-17 β is not compatible with Article 5.1 of the SPS
Agreement."1244
620. Having reversed the Panel, we must now determ ine whether we can complete the analysis by
reviewing ourselves the consistency of the Europ ean Communities' risk assessment relating to
oestradiol-17β with Article 5.1 of the SPS Agreement. In the past, the Appellate Body has completed
the analysis when there were sufficient factual fi ndings by the panel or undisputed facts on the Panel
record to enable it to do so. 1245 In light of the numerous flaws we have found in the Panel's analysis,
and the highly contested nature of the facts, we do not consider it possible to complete the analysis in
this case. Thus, we make no findings on the c onsistency or inconsistency of the European
Communities' import ban relating to oestradiol-17β.
VII. The Consistency with Article 5.7 of the SPS Agreement of the European Communities'
Provisional Import Ban on Meat from Cattle Treated with Testosterone, Progesterone,
Trenbolone Acetate, Zeranol, and MGA for Growth-Promotion Purposes
A. Introduction
621. We turn finally to the European Communities' a ppeal of the Panel's finding that the European
Communities' provisional ban on meat from cattle treat ed with testosterone, progesterone, trenbolone
acetate, zeranol, and MGA failed to meet the requirements of Article 5.7 of the SPS Agreement
because the relevant scientific evidence was not "insu fficient" within the meaning of that provision.

1244Panel Report, US – Continued Suspension , para. 7.579; Panel Report, Canada – Continued
Suspension, para. 7.549.
1245Appellate Body Report, US – Section 211 Appropriations Act, para. 343.

Section B describes the conclusions of the European Communities' evaluation of the potential adverse
health effects of the five hormones, and section C summarizes the Panel's findings under Article 5.7
of the SPS Agreement. Section D provides an overview of the claims and arguments raised on
appeal. In section E, we review the Panel's findings that the relevant scientific evidence in relation to
the five hormones was not "insufficient" within the meaning of Article 5.7. Our conclusions are set
out in section F.
B. The European Communities' Evaluation of the Five Hormones Subject to the
Provisional Ban
622. As we noted above
1246, following the adoption of the DSB's recommendations and rulings in
EC – Hormones , the European Communities initiated 17 sci entific studies aimed at evaluating, inter
alia, the potential for adverse effects to human health from residues in bovine meat and meat products
resulting from the use of oestradiol-17 β, testosterone, progesterone, zeranol, trenbolone acetate, and
MGA. The results of these studies, as well as other publicly available information, were reviewed by
the SCVPH. On 30 April 1999, the SCVPH issued the "1999 Opinion, in which it concluded that "in
view of the intrinsic properties of hormones and ep idemiological findings, a risk to the consumer has
been identified with different levels of conclu sive evidence for the six hormones in question." 1247 As
regards the five hormones, the 1999 Opinion further provided that "in spite of the individual
toxicological and epidemiological data described in the report, the current state of knowledge did not
allow a quantitative estimate of the risk."
1248 The European Communities concluded that "the
currently available information for testosterone , progesterone and the synthetic hormones zeranol,
trenbolone and particularly MGA has been considered inadequate to complete [a risk] assessment."1249
The 1999 Opinion also states that "no final conclusions can be drawn with respect to the safety" of the
five hormones.1250
623. The SCVPH subsequently reviewed the 1999 Opinion in 2000 and 2002, in the light of
additional scientific information it received, but di d not find it necessary to amend the conclusions
originally reached in the 1999 Opinion. The 2000 Opinion emphasized "the obvious gaps in the
present knowledge on target animal metabolism and residue disposition of the hormones under

1246See supra, sections I and IV.B.
12471999 Opinion, p. 73.
 1248Panel Report, US – Continued Suspension , para. 7.391 (quoting 1999 Opinion (Exhibit US-4
submitted by the United States to the Panel), p. 73); Panel Report, Canada – Continued Suspension, para. 7.388
(quoting 1999 Opinion (Exhibit CDA-2 submitted by Canada to the Panel), p. 73). The 1999 Opinion also
concludes that "endocrine, developmental, immunological, neurobiological, immunotoxic, genotoxic and
carcinogenic effects could be envisaged" for the five hormones, but "[i]n view of the intrinsic properties of the
hormones and in consideration of epidemiological findings, no threshold levels could be defined". (See ibid.)
12491999 Opinion, p. 75.
1250Ibid.

consideration, including the synthetic hormones", and stated that it expected "that the on-going
[European Communities'] research programs will provide additional data on both topics". 1251
The 2002 Opinion arrived at the following specific conclusions in relation to potential risks arising
from residues of the five hormones in bovine meat:
(e) No new data regarding testos terone and progesterone relevant
to bovine meat or meat products we re available. However, it was
emphasized that these natural hormones were used only in
combination with oestradiol-17 β or other oestrogenic compounds in
commercial preparations.
(f) Experiments with zeranol and trenbolone acetate suggested a
more complex oxidative metabolism than previously assumed. These
data needed further clarificati on as they might influence a risk
assessment related to tissue residues of these compounds.
(g) Zeranol and trenbolone acetate had been tested for their
mutagenic and genotoxic potential in various systems with different
endpoints. Both compounds exhibited only very weak effects.
(h) Data on the genotoxicity of [MGA] indicated only weak
effects. However, pro-apoptotic effects were noted in some cell-
based assays, which were attribut ed to the impurities in commercial
formulation. Further experiment s should clarify the toxicological
significance of these impurities.
(i) Model experiments with rabbits treated with zeranol,
trenbolone acetate or [MGA], mirroring their use in bovines, were
designed to study the consequences of pre- and perinatal exposure to
exogenous hormones. All compounds crossed the placental barrier
easily and influenced to varyi ng degrees the development of the
foetus, at the doses used in the experiments.

(k) Several studies were devoted to the potential impact of the
extensive use of hormones on the environment. Convincing data
were presented indicating the high stability of trenbolone acetate and
[MGA] in the environment, whereas preliminary data were provided
on the potential detrimental eff ects of hormonal compounds in
surface water.
1252
624. The European Communities enacted Directive 2003/74/EC, which provides for a provisional
ban on meat and meat products from cattle treated with progesterone, testosterone, zeranol, trenbolone

1251Panel Report, US – Continued Suspension , para. 7.392 (quoting 2000 Opinion (Exhibit US-17
submitted by the United States to the Panel), p. 4); Panel Report, Canada – Continued Suspension, para. 7.389
(quoting 2000 Opinion (Exhibit CDA-4 submitted by Canada to the Panel), p. 4).
1252Panel Report, US – Continued Suspension , para. 7.393 (quoting 2002 Opinion (Exhibit US-1
submitted by the United States to the Panel), pp. 21 and 22); Panel Report, Canada – Continued Suspension ,
para. 7.390 (quoting 2002 Opinion (Exhibit CDA-7 submitted by Canada to the Panel), pp. 21 and 22).

acetate and MGA for growth-promotion purposes. Before the Panel, the European Communities
argued that the SCVPH Opinions and supporti ng studies provided the "available pertinent
information" within the meaning of Article 5.7 on the basis of which the provisional ban on the five
hormones had been enacted.
1253
C. The Panel's Findings
625. At the outset of its analysis, the Panel recalled its earlier conclusion that the measure at issue,
to the extent that it provisionally bans the importa tion of meat from cattle treated with the hormones
progesterone, testosterone, zeranol, trenbolone acet ate, and MGA, is an SPS measure within the
meaning of Article 1 and paragraph 1 of Annex A to the SPS Agreement.1254 The Panel, furthermore,
observed that the "parties address the issue of the compatibility of the provisional ban on the above-
mentioned five hormones with the provisions of Article 5.7 of the SPS Agreement" and that "[n]one
... discussed the compatibility of the ban imposed with respect to these five hormones with
Article 5.1".1255 Therefore, the Panel stated that it would "limit its review to the conformity of the
[European Communities'] ban on the five hormones with the requirements of Article 5.7".1256
626. Having identified Article 5.7 as the relevant provision, the Panel referred to the Appellate
Body's interpretation of this provision as setting out the following four cumulative requirements that
must be satisfied in order to adopt and maintain a provisional measure under the SPS Agreement:
(a) the measure is imposed in respect to a situation where "relevant
scientific evidence is insufficient";
(b) the measure is adopted "on the basis of available pertinent
information";
(c) the WTO Member which adopted the measure must "seek to obtain
the additional information necessar y for a more objective assessment
of risk"; and

1253Panel Report, US – Continued Suspension , para. 7.581; Panel Report, Canada – Continued
Suspension, para. 7.551.
1254Panel Report, US – Continued Suspension , para. 7.590; Panel Report, Canada – Continued
Suspension, para. 7.565. (footnote omitted)
1255Panel Report, US – Continued Suspension , para. 7.591; Panel Report, Canada – Continued
Suspension, para. 7.566. (footnote omitted)
1256Ibid.

(d) the Member which adopted the meas ure must "review the ... measure
accordingly within a reasonable period of time".1257
627. Turning to the first requirement, the Panel re ferred to the Appellate Body's statement in
Japan – Apples that scientific evidence will be insufficien t 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 risk assessment. 1258 Recalling the approach it had adopted under Articles 5.1 and 5.2, the
Panel dismissed the relevance of instances of mi suse or abuse and difficulties of control in the
administration of the five hormones for the purpo ses of its determination of whether the relevant
scientific evidence on the five horm ones was insufficient under Article 5.7. The Panel reasoned that
instances of misuse and abuse are not, as such, a sci entific issue likely to make a risk assessment
impossible, and concluded that:
In our opinion, the scientific issue is related to the effect of the
ingestion of high doses of hormones residues, not to potential or
actual misuse or abuse in the administration of hormones. Therefore,
we will not address the issue of non compliance with good veterinary
practices in our analysis under Article 5.7 of the SPS Agreement.1259
628. The Panel then addressed the European Communitie s' argument that the appropriate level of
protection is relevant for the purposes of de termining whether the scientific evidence is
insufficient.1260 The Panel rejected the European Co mmunities' argument on the basis of the
following reasoning:
We note that sufficient scientific evid ence is what is needed to make
a risk assessment. The assessment whether there is sufficient
scientific evidence or not to perform a risk assessment should be an
objective process. The level of protection defined by each Member
may be relevant to determine the measure to be selected to address
the assessed risk, but it should not influence the performance of the
risk assessment as such.

1257Panel Report, US – Continued Suspension , para. 7.593; Panel Report, Canada – Continued
Suspension, para. 7.568 (quoting Appellate Body Report, Japan – Agricultural Products II, para. 89).
1258Panel Report, US – Continued Suspension , para. 7.608; Panel Report, Canada – Continued
Suspension, para. 7.586.
1259Panel Report, US – Continued Suspension , para. 7.603; Panel Report, Canada – Continued
Suspension, para. 7.578.
1260The Panel described the European Communities' level of protection as:
no (avoidable) risk, that is a level of protection that does not allow any
unnecessary addition from exposure to genotoxic chemical substances that are
intended to be added deliberately to food.
(Panel Report, US – Continued Suspension , para. 7.607; Panel Report, Canada – Continued Suspension ,
para. 7.585 (quoting replies of the European Communities to questions posed by the Panel after the second
Panel meeting, Panel Reports, Annex C-1, para. 69))

Indeed, whether a Member considers that its population should be
exposed or not to a particular risk, or at what level, is not relevant to
determining whether a risk exis ts and what its magnitude is.
A fortiori, it should have no effect on whether there is sufficient
evidence of the existence and magnitude of this risk.
A risk-averse Member may be inc lined to take a protective position
when considering the measure to be adopted. However, the
determination of whether scientific evidence is sufficient to assess
the existence and magnitude of a ri sk must be disconnected from the
intended level of protection.
1261
629. The Panel next observed that the United Stat es and Canada argued that JECFA and several
national regulatory bodies have determined that the scientific evidence regarding these hormones is
adequate or sufficient to conduct a risk assessment. The Panel, however, agreed with the parties that
scientific evidence which was previously deemed to be sufficient could subsequently become
insufficient.1262 On this basis, the Panel sought to determine under what circumstances could relevant,
previously sufficient, scientific evidence become insufficient within the meaning of Article 5.7.
630. Recalling the Appellate Body's decision in Japan – Apples , the Panel reasoned that
"Article 5.7 will apply in situations where, in substance, the relevant scientific evidence does not
allow the completion of an objective evaluation of the potential for adverse effects on human or
animal health arising from the presence of additives, contaminants, toxins or disease-causing
organisms in food, beverages, or feedstuffs." 1263 Also referring to the Appellate Body's decision in
Japan – Apples , the Panel stated that "the existence of scientific uncertainty does not automatically
amount to a situation of insufficiency of relevant scientific evidence". 1264 The Panel added that,
although it agreed that "under certain circumstance s what was previously sufficient evidence could
become insufficient", it did not "believe that th e existence of scientific uncertainty means that
previously sufficient evidence has in f act become insufficient nor should it ipso facto justify the
applicability of Article 5.7 of the SPS Agreement".1265
631. The Panel then turned to examine the relations hip between insufficiency of the evidence and

1261Panel Report, US – Continued Suspension , paras. 7.610-7.612; Panel Report, Canada – Continued
Suspension, paras. 7.588-7.590.
1262Panel Report, US – Continued Suspension , para. 7.620; Panel Report, Canada – Continued
Suspension, para. 7.598.
1263Panel Report, US – Continued Suspension , para. 7.628; Panel Report, Canada – Continued
1264Panel Report, US – Continued Suspension , para. 7.631; Panel Report, Canada – Continued
1265Panel Report, US – Continued Suspension , para. 7.637; Panel Report, Canada – Continued
Suspension, para. 7.615. In this respect, the Panel referred to the comments of Drs. Boisseau and Boobis on
how scientific uncertainty is addresse d in risk assessment. (Panel Report, US – Continued Suspension ,

the existence of an international standard. Accordin g to the Panel, "[t]he pr esumption of consistency
of measures conforming to international standards, guidelines and recommendations with the relevant
provisions of the SPS Agreement implies that these standards, guidelines or recommendations,
particularly those referred to in this case, are base d on risk assessments that meet the requirements of
the SPS Agreement."1266 The Panel recognized that "science continuously evolves", and that it
"cannot be excluded that new scientific evidence or information calls into question existing evidence"
or that "different risk assessments reach different interpretations of the same scientific evidence". 1267
For the Panel, the existence of international sta ndards meant "that there was sufficient evidence for
JECFA to undertake the appropriate risk assessments". 1268 The Panel added:
As a result, we consider that, in order to properly take into account
the existence of international standards, guidelines and
recommendations in this case, our approach should be to assess
whether scientific evidence has beco me insufficient by determining
whether the European Communiti es has produced any evidence of
some sufficient change in the scien tific knowledge so that what was
once sufficient to perform an ad equate risk assessment has now
become insufficient (i.e., "deficient in force, quality or amount"). In
this respect, suggesting hypothetical correlations or merely arguing
that there could be more evidence on one concern or another should
not be deemed sufficient to successfu lly claim that relevant scientific
evidence has become insufficient.
1269 (original emphasis; footnote
omitted)
632. The Panel concluded:
... if relevant evidence already exis ts, not any degree of insufficiency
will satisfy the criterion under Article 5.7 that "relevant scientific
evidence is insufficient". Having regard to our reasoning above,
particularly with respect to scientif ic uncertainty and the existence of
international standards, we cons ider that, depending on the existing
relevant evidence, there must be a critical mass of new evidence
and/or information that calls into question the fundamental precepts
of previous knowledge and eviden ce so as to make relevant,
previously sufficient, evidence now insufficient. In the present case
where risk assessments have been performed and a large body of
quality evidence has been accumulated, this would be possible only if
it put into question existing relevant evidence to the point that this
evidence is no longer sufficient to support the conclusions of existing

1266Panel Report, US – Continued Suspension , para. 7.644; Panel Report, Canada – Continued
Suspension, para. 7.622.
1267Panel Report, US – Continued Suspension , para. 7.645; Panel Report, Canada – Continued
Suspension, para. 7.623.
1268Panel Report, US – Continued Suspension , para. 7.644; Panel Report, Canada – Continued
Suspension, para. 7.622.
1269Panel Report, US – Continued Suspension , para. 7.647; Panel Report, Canada – Continued
Suspension, para. 7.625.

risks assessments. We therefore need to determine whether this is the
case here.
1270 (original emphasis; footnote omitted)
633. Next, the Panel sought to identify the alleged in sufficiencies in the scien tific evidence that it
would have to address. The Panel observed that, "[w] hereas, in application of the burden of proof in
relation to Article 5.7 of the SPS Agreement, it should be for the party challenging the applicability of
Article 5.7 to make a prima facie case that the relevant scientif ic evidence regarding the five
hormones is sufficient, it is also for the European Co mmunities, in application of the principle that it
is for each party to prove its allegations, to sup port its own allegations with appropriate evidence."1271
The Panel further noted that "even though in this case the European Communitie s is the complainant,
it also argues as part of its allegations under Artic le 22.8 of the DSU that its implementing measure
complies with Article 5.7 of the SPS Agreement."1272 The Panel also recalled "the consequence of the
presumption of consistency with the SPS Agreement and the GATT 1994 of measures which
conform to international standards, guidelines and recommendations on the risk assessments on which
such measures are based." 1273 From this, the Panel reasoned that , "[s]ince, in that context, the
European Communities argues that the relevant scientific evidence is insufficient, we consider that it
is for the European Communities to identify the issues for which such evidence is insufficient." 1274
Thus, the Panel did "not consider that, as Pa nel, we have any obligation to go beyond the
insufficiencies identified by the European Communities."1275
634. Before turning to the alleged insufficiencies of the scientific evidence, however, the Panel
noted that arguments and information presented to it were sometimes general and did not permit the
Panel to address each insufficiency on a hormone-speci fic basis. For this reason, the Panel decided to
address separately, on the basis of the insufficien cies discussed and identified by the European
Communities: (i) the insufficiencies commonly identified for all of the five hormones at issue, "to the
extent that information was not s ubmitted on a hormone-specific basis, or to the extent an issue was

1270Panel Report, US – Continued Suspension , para. 7.648; Panel Report, Canada – Continued
Suspension, para. 7.626.
1271Panel Report, US – Continued Suspension , para. 7.652; Panel Report, Canada – Continued
Suspension, para. 7.629. (footnote omitted)
1272Ibid.
1273Ibid.
1274Ibid.
1275Panel Report, US – Continued Suspension , para. 7.653; Panel Report, Canada – Continued
Suspension, para. 7.630. The Panel also stated its view "that it is incumbent upon a party making a particular
allegation to identify in its submissions the relevance of the evidence on which it relies to support its
arguments". (Panel Report, US – Continued Suspension , para. 7.658; Panel Report, Canada – Continued
Suspension, para. 7.635) (original emphasis) The Panel observed that, "in light of its functions under the DSU,
it should limit its review of alleged insufficiencies in the relevant scientific evidence to those specifically
discussed by the European Communities in its submissions", and would "only address the issues identified in the
Opinions to the extent they are sufficiently related to an issue discussed by the European Communities."
(Panel Report, US – Continued Suspension , para. 7.659; Panel Report, Canada – Continued Suspension ,
para. 7.636) (original emphasis)

raised with respect to all hormones, but ev idence submitted only for one or two of them" 1276; and
(ii) the insufficiencies alleged for each hormone on th e basis of the information that was specific for
that hormone.
635. The Panel stated that the following insufficien cies in the relevant scientific evidence were
identified and discussed by the Euro pean Communities in relation to all the five hormones at issue:
(a) effects of hormones on certain categories of the population, such as pre-pubertal children; (b) dose
response; (c) bioavailability; (d) long latency period for cancer; (e) the impact of the five hormones
on the immune system; and (f) the impact of the five hormones at issue on development and
reproduction.
1277
636. With regard to the effects of the hormones on certain categories of the population, the Panel
referred to the conclusions in the European Communitie s' risk assessment that individuals that have
the lowest endogenous levels of sex hormon es, particularly prepubescent children and post-
menopausal women, might be at an increased risk of adverse health effects associated with exposure
to exogenous sources of both o estrogens and testosterone. 1278 The Panel noted that the European
Communities' risk assessment made reference to th e development of new detection methods that had
identified considerably lower levels of oestradi ol endogenously produced by pre-pubertal children
than the levels previously identified using traditi onal detection methods. The Panel also observed the
European Communities' statement in the 1999 Opini on that "this is a critical area requiring additional
study".1279
637. The Panel recalled the "critical mass" sta ndard that it had developed to assess the
insufficiency of the relevant scientific evidence under Article 5.7, and concluded that its task was to
examine "whether the more sensitive detection me thods which identified lower hormonal levels in
prepubertal children than thought until now are such as to call into question the range of physiological
levels of the sex hormones in humans currently believed to exist".1280

1276Panel Report, US – Continued Suspension , para. 7.661; Panel Report, Canada – Continued
Suspension, para. 7.638.
1277Panel Report, US – Continued Suspension , para. 7.663; Panel Report, Canada – Continued
Suspension, para. 7.640. The European Communities also referr ed to "misuse and abuse (unspecified implants,
off-label use, black market drugs, etc." in its first submission to the Panel. The Panel believed that this issue
was not relevant to the insufficiency of the relevant scientific evidence under Article 5.7. (Panel Report, US –
Continued Suspension , footnote 787 to para. 7.654, and para. 7.483; Panel Report, Canada – Continued
Suspension, footnote 734 to para. 7.631)
1278See Panel Report, US – Continued Suspension, para. 7.664; and Panel Report, Canada – Continued
Suspension, para. 7.641.
1279Panel Report, US – Continued Suspension , para. 7.665; Panel Report, Canada – Continued
Suspension, para. 7.642. (footnote omitted)
1280Panel Report, US – Continued Suspension , para. 7.666; Panel Report, Canada – Continued
Suspension, para. 7.643.

638. The Panel concluded that:
We note that the evidence presented relates only to oestradiol, but
that the claim we are examining with regard to the insufficiencies of
the evidence are with respect to the five other hormones at issue, not
oestradiol. We note furthermore that the 2002 Opinion concludes
that these more sensitive detection methods have not yet been
validated.
... we are not convinced that the studies discussed by the experts call
into question the fundamental precepts of previous knowledge and
evidence so as to make relevant, previously sufficient evidence now
insufficient in relation to the effect of the five hormones on pre-
pubertal children. Particularly, it has not been established that the
data regarding the effects of hormones on which the JECFA
assessments are based are insufficient in light of new evidence
relating to the other five hormones at issue.
1281
639. Regarding dose response , the Panel noted that the European Communities questioned
JECFA's findings on dose response, in the light of new detection methods that called into question
previous knowledge about the e ndogenous production levels of hormones in pre-pubertal children.
The Panel then observed that JECFA could identify a dose response for the five hormones at issue. It
also noted that the European Communities' argu ment was premised on the notion that endogenous
production of natural hormones was lower than pr eviously thought, and recalled its previous
conclusion that scientific studies in support of th is notion were not yet validated and applied
exclusively to oestradiol. The Panel found that "it has not been established that new evidence was
such as to put into question existing data on dose response and prevent the performance of a risk
assessment."1282
640. With respect to bioavailability , the Panel observed that the new studies performed by the
European Communities related exclusively to the bioavailability of oestradiol-17 β, and that it was
unclear whether their findings would be re levant to hormones other than oestrogens. 1283 The Panel
then stated that "bioavailability would be an issue if the new evidence suggested that bioavailability in
the case of ingestion of meat treated for grow th promotion purposes is higher than previously

1281Panel Report, US – Continued Suspension , paras. 7.670 and 7.671; Panel Report, Canada –
Continued Suspension, paras. 7.647 and 7.648.
1282Panel Report, US – Continued Suspension , para. 7.675; Panel Report, Canada – Continued
Suspension, para. 7.652.
1283Panel Report, US – Continued Suspension , para. 7.677; Panel Report, Canada – Continued
Suspension, para. 7.654 (referring to European Communities' second written submission to the Panel, paras. 123
and 124). These paragraphs describe excerpts contained in the 1999 and 2002 Opinions, which call into
question NOEL (no-observed effect level) studies conducted by JECFA. (See 1999 Opinion, pp. 36 and 37,
and 2002 Opinion, p. 12)

thought."1284 However, the Panel noted that, in the ab sence of data, JECFA appears to have assumed
100 per cent bioavailability. The Panel referred to the testimony of Drs. Boisseau and Boobis, which
confirmed that the bioavailability of the synthetic hormones in humans has not been determined, and
for this reason JECFA assumed 100 per cent bioavailability. 1285 For these reasons, the Panel
concluded that it was not established that "any new evidence on bioavailability has been developed
regarding specifically the five hormones at issue, which would affect the current knowledge on the
subject."1286
641. Regarding the long latency period 1287 of cancer and confounding factors 1288, the Panel noted
the European Communities' allegation that "it may not be in a position to demonstrate the existence of
a clear harm in case of cancer because of the long latency period and the numerous confounding
factors that play a role in the development of cancer." 1289 The Panel then observed that Drs. Boobis,
Cogliano, and Guttenplan agreed that it was importa nt to take account of the long latency period of
cancer in conducting a risk assessment. 1290 The Panel noted further Dr s. Boisseau's and Boobis'
opinions that epidemiological studies, even if ta king into account long latency periods for cancer,
might not be able to identify the specific agent that has caused the disease, by virtue of the many
confounding factors. 1291 In this respect, the Panel referred to Dr. Cogliano's statement that "it was
generally possible to identify confounding factors in epidemiological studies" but it was often difficult
to "determine whether the observed tumours can be attributed to the agent under study or to a
confounding factor".
1292 The Panel observed that Drs. C ogliano, Guttenplan, and Boobis expressed
the view that the epidemiological studies submitted by the European Communities did not establish a

1284Panel Report, US – Continued Suspension , para. 7.679; Panel Report, Canada – Continued
Suspension, para. 7.656.
1285Panel Report, US – Continued Suspension , paras. 7.680 and 7.682; Panel Report, Canada –
Continued Suspension, para. 7.657 and 7.659 (quoting replies of the scientific experts to Question 43 posed by
the Panel, Panel Reports, Annex D, paras. 347 and 351).
1286Panel Report, US – Continued Suspension , para. 7.684; Panel Report, Canada – Continued
Suspension, para. 7.661.
1287A "latency period" is the period between exposure to an agent or process and the appearance of
symptoms. ( Merriam-Webster Medical Dictionary available at: <www.merriam-webster.com>)
1288Confounding factors are factors other than the one investigated which may also correlate with the
disease endpoint. (Replies of the scientific experts to Question 24 posed by the Panel, Panel Reports, Annex D,
para. 221)
1289Panel Report, US – Continued Suspension , para. 7.685; Panel Report, Canada – Continued
Suspension, para. 7.662.
1290Panel Report, US – Continued Suspension , paras. 7.687-7.690; Panel Report, Canada – Continued
Suspension, paras. 7.664-7.667 (quoting replies of the scien tific experts to Question 23 posed by the Panel,
Panel Reports, Annex D, paras. 210, 213, and 214).
1291Panel Report, US – Continued Suspension , paras. 7.691 and 7.692; Panel Report, Canada –
Continued Suspension, paras. 7.668 and 7.669 (quoting replies of the scientific experts to Question 23 posed by
the Panel, Panel Reports, Annex D, paras. 209 and 211).
1292Panel Report, US – Continued Suspension , para. 7.693; Panel Report, Canada – Continued
Suspension, para. 7.670 (quoting replies of the scientific experts to Question 24 posed by the Panel, Panel
Reports, Annex D, para. 220).

link or correlation between higher incidence of can cer and the consumption of residues of hormones
in treated meat
1293, and found that:
On the one hand, the comments of the experts suggest that
epidemiological studies have not been able to single out residues of
hormones in meat treated for growth promotion purposes as a cause
of cancer, and that this would be difficult. On the other hand, the
Panel notes that it is possible to assess long term effects through long
term studies of experimental animals, even if they involve much
higher doses than would be encountered in consumption of meat
from animals treated with growth promoting hormones. It has also
been possible to take into account the risk attached to latency through
the setting of ADI. The European Communities has not identified
any evidence quantitatively and qualita tively sufficient to call into
question the fundamental precep ts of existing knowledge and
evidence and the approach followed so far in order to integrate the
long latency period of cancer in risk assessment.
1294
642. Turning to the effects of the hormones on the immune system, the Panel noted the conclusion
contained in the 1999 Opinion that there is insuffici ent evidence as to the effects of the hormones on
the immune system. The Panel rejected the Euro pean Communities' contention that it was for the
responding parties to present evidence that adverse immune effects could not occur from residues of
hormone-treated meat, because all the responding pa rties had to prove was their assertion that the
relevant scientific evidence on these particular ri sks was sufficient to perform an adequate risk
assessment.1295 Next, the Panel observed that the experts identified potential adverse effects on the
immune system arising exclusively from oestrogens1296, and that there was no evidence to suggest that
those risks could not be addressed through a dose-response approach. 1297 The Panel also concluded
that the 1999 Opinion itself does not provide evidence of impact of any of the five hormones on the
immune system.
1298 For these reasons, the Panel found that "i t is not established that there exists a
critical mass of new evidence and/or information that calls into question the fundamental precepts of

1293Panel Report, US – Continued Suspension , paras. 7.695-7.697; Panel Report, Canada – Continued
Suspension, paras. 7.672-7.674 (quoting replies of the scien tific experts to Question 26 posed by the Panel,
Panel Reports, Annex D, paras. 241, 242, and 239).
1294Panel Report, US – Continued Suspension , para. 7.699; Panel Report, Canada – Continued
Suspension, para. 7.676.
1295Panel Report, US – Continued Suspension , para. 7.705; Panel Report, Canada – Continued
Suspension, para. 7.682.
1296Panel Report, US – Continued Suspension , para. 7.706; Panel Report, Canada – Continued
Suspension, para. 7.683.
1297Panel Report, US – Continued Suspension , para. 7.707; Panel Report, Canada – Continued
Suspension, para. 7.684.
1298Panel Report, US – Continued Suspension , para. 7.706; Panel Report, Canada – Continued
Suspension, para. 7.683 (referring to 1999 Opinion, pp. 51, 55, 60, and 66).

previous knowledge and evidence so as to make re levant, previously sufficient, evidence on hormone
effects on the immune system now insufficient."1299
643. Finally, as regards the effects on growth and reproduction , the Panel initially observed that
the European Communities had advanc ed no specific argument in relation to the insufficiency of the
evidence of adverse effects of the five hormones on growth and reproduction. Nevertheless, the Panel
decided to address this issue in light of the Eu ropean Communities' contention that the new data
revealed "important gaps, insu fficiencies and contradictions" 1300 in the relevant scientific evidence.
The Panel observed that Dr. Guttenplan initially identi fied a number of gaps in the scientific evidence
that could relate to growth and reproduction, but subsequently declared that it was possible to conduct
a risk assessment of the five hormones. 1301 Dr. Boobis, in turn, expressed the view that the scientific
studies do not "support the contention that they have identified important ne w gaps, insufficiencies
and contradictions in the scientific information" and that additional information obtained "was often
not definitive, sometimes it was not relevant, in some instances it confirmed or expanded on previous
knowledge".1302 Next, the Panel dismissed the opinions of Drs. Sippell and Guttenplan about
potential developmental effects of hormones in chil dren on the basis that these statements reflected
"doubts" but did not constitute "evidence of risks". 1303 Finally, the Panel considered that the evidence
referred to by the European Commun ities related only to oestradiol-17 β, and that the European
Communities had not substantiated its assertion that the scientific evidence was insufficient to
conduct a risk assessment with respect to the other five hormones. On this basis, the Panel concluded
that "it has not been established that there is a critical mass of new evidence ... so as to make relevant,
previously sufficient evidence now insufficient in relation to the growth and reproduction effects".1304
644. Next, the Panel turned to the sp ecific insufficiencies alleged in relation to each of the five
hormones individually.
645. In relation to progesterone, the Panel focused on the European Communities' allegation that

1299Panel Report, US – Continued Suspension , para. 7.708; Panel Report, Canada – Continued
Suspension, para. 7.685.
1300Panel Report, US – Continued Suspension , para. 7.709; Panel Report, Canada – Continued
Suspension, para. 7.686.
1301Panel Report, US – Continued Suspension , para. 7.710; Panel Report, Canada – Continued
Suspension, para. 7.687.
1302Panel Report, US – Continued Suspension , para. 7.711; Panel Report, Canada – Continued
Suspension, para. 7.688 (quoting replies of the scientific experts to Question 62 posed by the Panel, Panel
Reports, Annex D, para. 495).
1303Panel Report, US – Continued Suspension , para. 7.719; Panel Report, Canada – Continued
Suspension, para. 7.696 (quoting transcript of the Panel's joint meeting with scientific experts
on 27-28 September 2006, Panel Reports, Annex G, paras. 1061 and 1063).
1304Panel Report, US – Continued Suspension , para. 7.721; Panel Report, Canada – Continued
Suspension, para. 7.698.

the relevant scientific evidence on carcinogenic or genotoxic potential of this hormone was
insufficient, because the other in sufficiencies identified by the Eu ropean Communities had already
been addressed by the Panel in its analysis of the insufficiencies common to the five hormones.
1305
The Panel noted that the 2002 Opinion concluded that "[t]here is no evidence that progesterone or
testosterone have genotoxic potential". 1306 The Panel observed that Drs. Boisseau, Boobis, and
Guttenplan agreed that there w as no evidence that progesterone was genotoxic. The Panel also
referred to Dr. Boisseau's opinion that the sci entific evidence submitte d by the European
Communities did not support the conclusion that carci nogenic effects of progesterone are related to a
mechanism other than hormonal activity. 1307 The Panel noted further that IARC opinions had not
evaluated the carcinogenicity of residues of progesterone in beef, and quoted the opinions of
Drs. Boobis and Guttenplan that the relevant scien tific evidence on progesterone was sufficient to
conduct a risk assessment.
1308 The Panel concluded that it had not been established that the relevant
scientific evidence with respect to progesterone was insufficient within the meaning of Article 5.7 of
the SPS Agreement.
646. Turning to testosterone, the Panel noted that many of the insufficiencies in the relevant
scientific evidence had been addressed in common with the other four hormones. 1309 The Panel's
analysis therefore focused on the evidence of genot oxicity and carcinogenicity of testosterone. The
Panel observed that the 1999 Opinion stated that no information was available on DNA damage
induced by testosterone or its metabolites, a nd that "[w]hereas the evidence in favour of
carcinogenicity was considered sufficient for testosterone in experimental animals, data in humans are
limited".1310 According to the Panel, this statement had to be read in conjunction with the conclusion
that "the evidence regarding the role of testos terone in prostate cancer is currently weak". 1311 In the
Panel's view, this evidence did not meet the "cr itical mass" test that it articulated to assess
insufficiency within the meaning of Article 5.7. The Panel noted, moreover, Dr. Boisseau's opinion
that the scientific evidence submitted by the Eur opean Communities did not support the conclusion

1305Panel Report, US – Continued Suspension , para. 7.729; Panel Report, Canada – Continued
Suspension, para. 7.706.
1306Panel Report, US – Continued Suspension , para. 7.731; Panel Report, Canada – Continued
Suspension, para. 7.708 (quoting 2002 Opinion, section 4.3, p. 15).
1307Panel Report, US – Continued Suspension , paras. 7.738; Panel Report, Canada – Continued
Suspension, para. 7.715 (quoting replies of the scientific experts to Question 16 posed by the Panel, Panel
Reports, Annex D, para. 158).
1308Panel Report, US – Continued Suspension , paras. 7.740 and 7.741; Panel Report, Canada –
Continued Suspension, paras. 7.717 and 7.718.
1309Panel Report, US – Continued Suspension , para. 7.746; Panel Report, Canada – Continued
Suspension, para. 7.726.
1310Panel Report, US – Continued Suspension , para. 7.749; Panel Report, Canada – Continued
1311Panel Report, US – Continued Suspension , para. 7.749; Panel Report, Canada – Continued
Suspension, para. 7.729.

that carcinogenic effects of testosterone are rela ted to a mechanism other than hormonal activity. 1312
The Panel therefore found that it had not been estab lished that the relevant scientific evidence with
respect to testosterone was insufficient within the meaning of Article 5.7 of the SPS Agreement.
647. The Panel limited its analysis concerning trenbolone acetate to two distinct "insufficiencies"
that were identified by the European Communities in the scientific evidence: (i) the metabolism of
trenbolone acetate; and (ii) inadequate evidence of carcinogenicity in humans. 1313 Regarding the
metabolism of trenbolone, the Panel contrasted th e statement in the 2002 Opinion that "experiments
with ... trenbolone acetate suggested a more complex oxidative metabolism than previously
assumed"
1314 with Dr. Boobis' opinion that "these data do not affect the risk assessment of trenbolone
acetate."1315 In relation to the evidence on carcinogeni city of trenbolone, the Panel referred to
Dr. Boobis' opinion that "[t]hese data are insuffi cient ... to alter the conclusion that ... trenbolone
acetate has genotoxic potential in vivo"1316; Dr. Guttenplan's view that "[t]renbolone is either negative
or marginally active in in vitro genotoxic assays" 1317; and Dr. Boisseau's statement that "the
scientific evidence relied upon in the SCVPH Opinions does not support the conclusion that the
carcinogenic effects of trenbolone are related to a mechanism other than hormonal activity."
1318 The
Panel also noted Dr. Boobis' opinion that the info rmation available was sufficient for the European
Communities to conduct a risk assessment in relation to the six hormones. In addition, the Panel
observed that, although Dr. Guttenplan stated that no "accurate ADIs can be established [for
trenbolone] at this point"
1319, he later clarified that this "does not mean that you can't make a risk

1312Panel Report, US – Continued Suspension , paras. 7.752; Panel Report, Canada – Continued
Suspension, para. 7.732 (quoting replies of the scientific experts to Question 16 posed by the Panel, Panel
Reports, Annex D, para. 160).
1313Panel Report, US – Continued Suspension , para. 7.761; Panel Report, Canada – Continued
Suspension, para. 7.743.
1314Panel Report, US – Continued Suspension , para. 7.762; Panel Report, Canada – Continued
Suspension, para. 7.744 (quoting 2002 Opinion, section 7, p. 21).
1315Panel Report, US – Continued Suspension , para. 7.763; Panel Report, Canada – Continued
Suspension, para. 7.745 (quoting replies of the scientific experts to Question 62 posed by the Panel, Panel
Reports, Annex D, para. 480).
1316Panel Report, US – Continued Suspension , para. 7.770; Panel Report, Canada – Continued
Suspension, para. 7.752 (quoting replies of the scientific experts to Question 62 posed by the Panel, Panel
Reports, Annex D, para. 483).
1317Panel Report, US – Continued Suspension , para. 7.771; Panel Report, Canada – Continued
Suspension, para. 7.753 (quoting replies of the scientific experts to Question 21 posed by the Panel, Panel
Reports, Annex D, para. 200).
1318Panel Report, US – Continued Suspension , para. 7.775; Panel Report, Canada – Continued
Suspension, para. 7.757 (quoting replies of the scientific experts to Question 16 posed by the Panel, Panel
Reports, Annex D, para. 164).
1319Panel Report, US – Continued Suspension , para. 7.779; Panel Report, Canada – Continued
Suspension, para. 7.761 (quoting replies of the scientific experts to Question 61 posed by the Panel, Panel
Reports, Annex D, para. 457).

assessment, it just means that the accuracy of the risk assessment is different."
1320 Thus, the Panel
concluded that the relevant scientific evidence on trenbolone was not insufficient within the meaning
of Article 5.7.
648. As regards zeranol, the Panel began by reca lling the 1999 Opinion's conclusion that the
scientific evidence "gave equivocal results insufficient for an evaluation of the mutagenic/genotoxic
properties of zeranol" and that, as far as carcinogenici ty of zeranol was concerned, "there is clear
evidence for the induction of liver adenomas and carcinomas in one animal species, but no assessment
of the possible carcinogenicity of zeranol can be made." 1321 The Panel then analyzed the views
expressed by the experts on the scientific evidence relating to the mutagenic, genotoxic and
carcinogenic properties of zeranol, in particular Dr. Boisseau's remark that JECFA "concluded that the
'tumorigenic effect of zeranol was associated with its oestrogenic properties'"
1322 and the statement in
the 2002 Opinion that an in vitro study of zeranol in which it "did not induce genotoxicity or
mutagenicity."1323 Dr. Sippell opined that zeranol and its metabolites "have been shown to be as
potent as [oestradiol] ... in increasing the expression of estrogen-related genes in human breast cancer
cells."1324 However, referring to the same evidence, Dr. Boobis noted that in vitro studies have
limited relevance "to the situation in vivo , where kinetic and metabolic factors will influence the
magnitude of the response". 1325 Therefore, according to Dr. Boobis, "[t]hese data are insufficient to
support the conclusion that these hormones have genotoxic potential in vivo." 1326 Dr. Guttenplan also
noted that "[z]eranol can induce transformation of breast epithelial cells in culture with efficiency
similar to that of oestradiol, but the mechanism is now known, and it is negative or marginally active
in other assays." 1327 Dr. Boisseau opined that "the scientific evidence relied upon in the SCVPH

1320Panel Report, US – Continued Suspension , para. 7.780; Panel Report, Canada – Continued
Suspension, para. 7.762 (quoting transcript of the Panel's joint meeting with scientific experts
on 27-28 September 2006, Panel Reports, Annex G, para. 983).
1321Panel Report, US – Continued Suspension , para. 7.788; Panel Report, Canada – Continued
Suspension, para. 7.772 (referring to 1999 Opinion, sections 4.5.5 to 4.5.7, pp. 64 and 65).
1322Panel Report, US – Continued Suspension , para. 7.790; Panel Report, Canada – Continued
Suspension, para. 7.774 (quoting replies of the scientific experts to Question 16 posed by the Panel, Panel
Reports, Annex D, para. 165).
1323Panel Report, US – Continued Suspension , para. 7.791; Panel Report, Canada – Continued
Suspension, para. 7.775 (quoting 2002 Opinion, section 4.4.3, p. 16).
1324Panel Report, US – Continued Suspension , para. 7.792; Panel Report, Canada – Continued
Suspension, para. 7.776 (quoting replies of the scientific experts to Question 41 posed by the Panel, Panel
Reports, Annex D, para. 336).
1325Ibid. (quoting replies of the scientific experts to Question 62 posed by the Panel, Panel Reports,
Annex D, para. 475).
1326Panel Report, US – Continued Suspension , para. 7.793; Panel Report, Canada – Continued
Suspension, para. 7.777 (quoting replies of the scientific experts to Question 21 posed by the Panel, Panel
Reports, Annex D, para. 198).
1327Panel Report, US – Continued Suspension , para. 7.795; Panel Report, Canada – Continued
Suspension, para. 7.779 (quoting replies of the scientific experts to Question 21 posed by the Panel, Panel
Reports, Annex D, para. 200).

Opinions does not support the conclusion that the carcinogenic effects of zeranol are related to a
mechanism other than hormonal activity." 1328 Finally, the Panel also referred to Dr. Guttenplan's
opinion that a more recent study suggested a risk from zeranol, but "the results were obtained in
cultured cells and the relevance to human exposure to hormone-treated [meat] cannot be extrapolated
from this study because of a myriad of uncertainties in such extrapolation. The study does suggest
that additional tests of zeranol should be carried out." 1329 On this basis, the Panel concluded that "it is
not established that relevant scientific evidence is insufficient in relation to the carcinogenicity of
zeranol, within the meaning of Article 5.7 of the SPS Agreement."1330
649. Finally, in relation to MGA, the Panel focused on two distinct "insufficiencies" in the
scientific evidence: (i) whether only limited data were available on residues of MGA in treated cattle;
and (ii) whether the evidence for carcinogeni city of MGA in humans was inadequate. 1331 As a
preliminary remark, however, the Panel noted that no international standards for MGA existed, but
"intensive work" had been performed on MGA at the international level, particularly two risk
assessments by JECFA. 1332 The Panel observed that MGA was on Codex's priority list for
recalculation of Maximum Residue Levels ("MRLs"), and that the draft MRL for MGA was at Step 7
of the Codex elaboration procedure. The Panel stated that "the role of JECFA in the international risk
assessment process is such that some degree of relevance should be given to that work" 1333, and, on
this basis, concluded that the existence of assessme nts by JECFA "suggests that evidence has been at
one point sufficient."1334
650. As for the data on residues of MGA, whic h the European Communities suggested were
outdated, the Panel noted that both Drs. Boisseau a nd De Brabander recognized that nearly all studies
used by JECFA dated back to th e 1960s and 1970s. Neither of them, however, stated that those
studies were no longer valid. The Panel also recalled its earlier conclusion that the fact that a study is

1328Panel Report, US – Continued Suspension , para. 7.796; Panel Report, Canada – Continued
Suspension, para. 7.780 (quoting replies of the scientific experts to Question 16 posed by the Panel, Panel
Reports, Annex D, para. 166).
1329Panel Report, US – Continued Suspension , para. 7.797; Panel Report, Canada – Continued
Suspension, para. 7.781 (quoting replies of the scientific experts to Question 25 posed by the Panel, Panel
Reports, Annex D, para. 234).
1330Panel Report, US – Continued Suspension , para. 7.800; Panel Report, Canada – Continued
Suspension, para. 7.784.
1331Panel Report, US – Continued Suspension , para. 7.812; Panel Report, Canada – Continued
Suspension, para. 7.798.
1332Panel Report, US – Continued Suspension , para. 7.806; Panel Report, Canada – Continued
Suspension, para. 7.799.
1333Panel Report, US – Continued Suspension , para. 7.813; Panel Report, Canada – Continued
Suspension, para. 7.799.
1334Panel Report, US – Continued Suspension , para. 7.827; Panel Report, Canada – Continued
Suspension, para. 7.813.

old does not per se put in doubt the validity of the study.
1335 The Panel, furthermore, quoted opinions
by Drs. Boisseau and Boobis to the effect that new scientific studies did not undermine the MRLs for
MGA calculated by JECFA, because the latter were based on very conservative assumptions.1336
651. Turning to the evidence on the carcinogenicity in humans of MGA, the Panel noted that the
statement in the 2002 Opinion that "[t]he results [f or genotoxicity of MGA] were negative in several
experiments"1337 seemed to confirm JECFA's conclusions. The Panel also made reference to
Dr. Boobis' opinion that "[MGA was] negative in a range of tests for genotoxicity" 1338, and
Dr. Guttenplan's statement that "MGA is negative in genotoxic assays". 1339 On the potential
carcinogenicity of MGA, the Panel stressed that IARC has not assessed the specific risks of cancer
arising from the consumption of meat treated with MGA, and recalled Dr. Boisseau's view that "the
scientific evidence relied upon in the SCVPH Opinions does not support the conclusion that the
carcinogenic effects of [MGA] are related to a mechanism other than hormonal activity." 1340 The
Panel also referred to Dr. Boobis' opinion that the evidence was sufficient to conduct a risk
assessment in relation to all six hormones at issue, and Dr. Guttenplan's statements that "[JECFA's]
assessment for [MGA] seems sound" and that "[t] horough metabolic and estrogenic studies have been
carried out."1341 The Panel concluded that the relevant evidence for MGA was not insufficient within
the meaning of Article 5.7.1342
652. At the end of its analysis, the Panel said that it had asked the scientific experts whether the
scientific evidence relied upon by the European Communities supported the European Communities'
contention that the scientific studies initiated since 1997 had identified new important gaps,
insufficiencies and contradictions in the scien tific information and knowledge available on these

1335Panel Report, US – Continued Suspension, para. 7.816 (referring to ibid., para. 7.423 et seq.); Panel
Report, Canada – Continued Suspension, para. 7.802 (referring to ibid., paras. 7.414 et seq.).
1336Panel Report, US – Continued Suspension , paras. 7.817 and 7.818; Panel Report, Canada –
Continued Suspension, para. 7.803 and 7.804 (quoting replies of the scientific experts to Panel Questions 35 and
62, Panel Reports, Annex D, paras. 303 and 484).
1337Panel Report, US – Continued Suspension , para. 7.820; Panel Report, Canada – Continued
Suspension, para. 7.806 (quoting 2002 Opinion, section 4.5.3, p. 18).
1338Panel Report, US – Continued Suspension , para. 7.822; Panel Report, Canada – Continued
Suspension, para. 7.808 (quoting replies of the scientific experts to Question 21 posed by the Panel, Panel
Reports, Annex D, para. 198).
1339Panel Report, US – Continued Suspension , para. 7.823; Panel Report, Canada – Continued
Suspension, para. 7.809 (quoting replies of the scientific experts to Question 21 posed by the Panel, Panel
Reports, Annex D, para. 200).
1340Panel Report, US – Continued Suspension , para. 7.826; Panel Report, Canada – Continued
Suspension, para. 7.812 (quoting replies of the scientific experts to Question 16 posed by the Panel, Panel
Reports, Annex D, para. 162).
1341Panel Report, US – Continued Suspension , para. 7.829; Panel Report, Canada – Continued
Suspension, para. 7.815 (quoting replies of the scientific experts to Question 61 posed by the Panel, Panel
Reports, Annex D, para. 458).
1342Panel Report, US – Continued Suspension , para. 7.830; Panel Report, Canada – Continued
Suspension, para. 7.816.

hormones such that more scientific studies are nec essary before the risk to human health from the
consumption of meat from cattle treated with these hormones for growth-p romotion purposes can be
assessed. The Panel recalled its test that there mu st be a critical mass of new evidence and/or
information that calls into question the fundament al precepts of previous knowledge and evidence so
as to make relevant, previously sufficient eviden ce now insufficient and noted that the experts who
expressed themselves in detail on this matter confir med, both in general and for each of the five
hormones subject to a provisional ban, that such critical mass had not been reached.1343
653. Thus, the Panel found:
For all these reasons, we conclude that it has not been demonstrated
that relevant scientific evidence w as insufficient, within the meaning
of Article 5.7 of the SPS Agreement, in relation to any of the five
hormones with respect to which th e European Communities applies a
provisional ban.1344
654. Having made this finding, the Panel recalled that the four requirements outlined by the
Appellate Body in Japan – Agricultural Products II applied cumulatively.1345 The Panel added that,
"[s]ince we found that the first requirement (the me asure is imposed in respect to a situation where
'relevant scientific evidence is in sufficient') has not been satisfied, we do not find it necessary to
address any of the three other requirements."1346 The Panel concluded:
We therefore conclude that the [European Communities'] compliance
measure does not meet the require ments of Article 5.7 of the
SPS Agreement as far as the provisional ban on progesterone,
testosterone, zeranol, trenbolone acetate and melengestrol acetate is
concerned.
 1347
655. After setting out its conclusion, the Panel made the following clarification of its implications:
Having reached that conclusion, we want to make clear that we only
determined that it had not been est ablished that the existing relevant
scientific evidence was insufficient. This does not mean that no
measure can be imposed by the European Communities under the
SPS Agreement in relation to the five horm ones at issue. Indeed, our
determinations are without prejudice to the legality of any [European
Communities'] measure regardi ng these hormones, should the

1343Panel Report, US – Continued Suspension , para. 7.834; Panel Report, Canada – Continued
Suspension, para. 7.820.
1344Panel Report, US – Continued Suspension , para. 7.835; Panel Report, Canada – Continued
Suspension, para. 7.821.
1345Panel Report, US – Continued Suspension , para. 7.836; Panel Report, Canada – Continued
Suspension, para. 7.822.
1346Ibid.
1347Ibid.

European Communities decide to complete its risk assessments
pursuant to Article 5.1 of the SPS Agreement.
1348
D. Claims and Arguments on Appeal
656. The European Communities claims that the Panel erred in finding that the relevant scientific
evidence on the five hormones was not "insufficient" within the meaning of Article 5.7 of the SPS
Agreement and that, consequently, the provisional ban on the importation and marketing of meat
from cattle treated with the five hormones does not meet the requirements of that provision.
657. First, the European Communiti es argues that the Panel erred in finding that the European
Communities' chosen level of protection was not relevant for the determination of whether the
relevant scientific evidence on the five hormones was "insufficient" within the meaning of Article 5.7.
The European Communities emphasizes that Article 3.3 of the SPS Agreement permits it to adopt
SPS measures that result in a higher level of prot ection than the one "implie[d] or encapsulate[d]" 1349
in the relevant international standards, and for th is reason its intended leve l of protection must be
relevant for determining whether the scientific ev idence is "insufficient" within the meaning of
Article 5.7.
658. Secondly, the European Communities challenges the Panel's finding that the presumption of
consistency that applies under Article 3.2 of the SPS Agreement to measures that conform to
international standards "implies that these standa rds ... are based on risk assessments that meet the
requirements of the SPS Agreement" and that therefore "there was sufficient evidence for JECFA to
undertake the appropriate risk assessments." 1350 According to the European Communities, the
presumption that applies to measures that confor m to international standards does not necessarily
mean that the international standards themselves are based on a risk assessment within the meaning of
Article 5.1 because the international standard may not be based on a risk assessment, or it may be
based on an assessment that takes into account different factors or outdated scientific opinions.
659. Thirdly, the European Communiti es argues that the Panel erred in allocating to the European
Communities the burden of demonstrating that the provisional ban on meat and meat products treated
with the five hormones met the requirements of Article 5.7 of the SPS Agreement. In doing so, the
Panel erroneously interpreted Ar ticle 5.7 to be an exception to Article 5.1. The European
Communities maintains that Article 5.7 confers on WTO Members a "qualified right" 1351 to take

1348Panel Report, US – Continued Suspension , para. 7.837; Panel Report, Canada – Continued
Suspension, para. 7.823.
1350European Communities' appellant's submission, para. 387 (quoting Panel Report, US – Continued

provisional SPS measures in cases where they consid er that the relevant scientific evidence is
insufficient. Therefore, the United States and Ca nada bore the burden of demonstrating that this
condition had not been fulfilled by the European Communities. The Europ ean Communities asserts
that the Panel mistakenly shifted the burden of pr oof under Article 5.7 to the European Communities
by limiting its review exclusively to the "insufficiencies" in the scientific evidence that were identified
by the European Communities in its submissions.1352
660. Fourthly, the European Commun ities argues that the Panel erred in finding that, where
international standards for a substance exist, a "critical mass" of new scientific evidence that calls into
question the fundamental precepts of previous knowle dge is required to render the relevant scientific
evidence "insufficient" within the meaning of Article 5.7. 1353 The European Communities suggests
that, if a Member may legitimately follow a "resp ectable minority view" in its risk assessment, "it
must be incorrect and entirely disproportionate to exclude a priori that a respectable minority could
not make the available scien tific evidence insufficient."1354 Thus, the Panel's "critical mass" standard
imposed an excessively "high qu antitative and qualitative threshold" 1355 with respect to the new
scientific evidence that is required to render the relevant scientific evidence insufficient. According to
the European Communities, the quality of the scientific evidence is more important that the quantity,
and even a single study made by qualifie d and respectable scientists could be a priori sufficient to
conclude that the scientific relevant scientific ev idence is insufficient, provided that its merits are
particularly relevant for the circumstances of the risk assessment. 1356 The European Communities
also submits that the Panel's "critical mass" st andard effectively "preclude[d] [the] application" 1357 of
the precautionary principle in the interpretation of Articles 5.1 and 5.7, because it implies that the
relevant scientific evidence passes immediately from a state of insufficiency under Article 5.7 to a
state of complete knowledge under Article 5.1; there will be no transitional period in which
Article 5.7 could apply. 1358 Furthermore, the European Communities submits that the application of
the "critical mass" standard led the Panel to "ignore highly relevant scientific evidence" 1359, which
demonstrated that the relevant scientific eviden ce was insufficient to perform a risk assessment.
According to the European Commun ities, the relevant scientific evid ence was insufficient to perform
a risk assessment in the areas of: (i) effects of hormones on certain population groups; (ii) dose

1352European Communities' appellant's submissi on, para. 380 (referring to Panel Report, US –
1353Ibid., para. 409 (quoting Panel Report, US – Continued Suspension, para. 7.648; and Panel Report,
Canada – Continued Suspension, para. 7.626).
1354Ibid., para. 409.
1355Ibid., para. 412.
1356Ibid., para. 413.
1357Ibid., para. 427.
1358European Communities' statement at the oral hearing.

response; (iii) long latency periods for cancer and c onfounding factors; and (iv) adverse effects of
the five hormones on growth and reproduction. Th e European Communities also asserts that the
relevant scientific evidence was insufficient in relation to each of the five hormones assessed
individually.
661. Finally, the European Communities asserts th at the Panel failed to make an objective
assessment of the facts, as required by Article 11 of the DSU, in reaching its findings under
Article 5.7 of the SPS Agreement. The European Communities charges the Panel with ignoring Dr.
Cogliano's statement that "the data are not suffici ent" to conduct a "low-dose prediction of risk at
levels you might find in hormone-treated meat."
1360 The European Communities adds that the Panel
"arbitrarily chose between different scientific opinion s" instead of determining whether the European
Communities had "followed a scientifically plausible alternative" 1361 when adopting
Directive 2003/74/EC. Therefore, the Panel impermissibly engaged in a de novo review of the
scientific evidence in relation to the five hormones, in violation of Article 11of the DSU.
662. The United States responds that the Panel correctly found that the relevant scientific evidence
on the five hormones subject to the provisional ban was not "insufficient" within the meaning of
Article 5.7 of the SPS Agreement.
663. The United States submits that the Panel correctly interpreted Article 5.7, taking into account
the context provided by Articles 3.2 and 3.3 of the SPS Agreement. This is because, in light of the
presumption of consistency with the SPS Agreement that applies to measures which conform to
international standards under Article 3.2, the Panel was justified in fi nding that the existence of such
standards indicated that there ha d been sufficient scientific evid ence to conduct a risk assessment
within the meaning of Article 5.1 for the five hormones at issue. 1362 The United States also argues
that the Panel correctly concluded that the Eur opean Communities' desired level of protection was
irrelevant for the determination of whether the re levant scientific evidence on the five hormones was
"insufficient" within the meaning of Article 5. 7. The United States suggests that the European
Communities failed to demonstrate that its chosen le vel of protection is different from the level of
protection that the Codex standards for the hormones at issue are designed to achieve. 1363 The United
States adds that a risk assessment is a scientific pro cess aimed at identifying whether a risk exists and,

1360European Communities' appellant's submission, para. 279 (quoting transcript of the Panel's joint
meeting with the scientific experts, Panel Reports, Annex G, para. 871).
1361Ibid., para. 281.
1363Ibid., para. 71.

for this reason, risk assessors "need not have any pa rticular level of protection in mind in conducting
the risk assessment."1364
664. The United States also rejects the Europ ean Communities' assertion that the Panel
misallocated the burden of proof in its analysis unde r Article 5.7. The United States argues that the
Panel correctly noted that "one of the particularities of this case" 1365 was that the European
Communities' claim that the United States breached Article 22.8 of the DSU was premised on an
assertion that the European Communities had brought itself into conformity with the SPS Agreement.
Taking into account the European Communities' con cern that it should not be required to "prove a
negative", all the Panel initially required was that the European Communities established a prima
facie case of conformity with the SPS Agreement.1366 According to the United States, the Panel only
shifted the burden of proof to the United States once it had found that the European Communities had
established such a prima facie case, and subsequently found that the United States had rebutted the
European Communities' prima facie case of conformity with the SPS Agreement "by submitting
positive evidence that demonstrated a breach of the SPS Agreement".1367 The United States agrees
with the Panel that "the burden [of proof] shifted back and forth between the parties and eventually
'neutralized' each other since each party also submitted evidence in support of its allegations". 1368 The
United States further notes that "the Panel never d escribed or treated Article 5.7 as an exception to
Article 5.1"1369, and for this reason the European Communitie s' allegation that the Panel interpreted
Article 5.7 to be an exception to Article 5.1 is "speculation".1370
665. The United States maintains that the Panel did not err in finding that "a critical mass of new
evidence" is required to render previously suffici ent scientific evidence "ins ufficient" within the
meaning of Article 5.7. In the United States' view , the Panel's "critical mass" standard did not impose
a minimum quantitative requirement, because it refers to situations where "evidence becomes so
quantitatively and qualitatively sufficient to call into question the fundamental precepts of previous
knowledge and evidence", such that new scientific info rmation is "at the origin of a change in the
understanding of a scientific issue." 1371 The United States considers that it was "appropriate" for the
Panel to focus on the question of "wheth er the relevant scientific evidence had become
insufficient"1372, because the five hormones at issue had been studied intensively for decades,

1366Ibid.
1367Ibid., para. 93.
1369Ibid., para. 96.
1370Ibid.
1372Ibid., para. 80. (original emphasis)

international standards for four of them had ex isted for over 20 years, and because the European
Communities itself had argued in EC – Hormones that the relevant scientific evidence on the five
hormones was sufficient for it to conduct a risk asse ssment. Thus, there was "plentiful" evidence on
record demonstrating that the relevant scientific evidence "[was] and remains sufficient" to conduct a
risk assessment for the five hormones.
1373
666. Finally, the United States argues that the Panel did not fail to make an objective assessment of
the facts as required by Article 11 of the DSU in reaching its findings under Article 5.7 of the SPS
Agreement. The United States asserts that the Panel acted within the bounds of its discretion as the
trier of the facts by attributing to the different pieces of evidence a different weight and significance
than the one attributed by the European Communitie s. The United States reiterates that "there was
plentiful evidence in the record demonstra ting that the relevant scientific evidence" 1374 remains
sufficient to conduct a risk assessment for th ese five hormones, and therefore the Panel's
consideration of whether there was a "'critical mass of new evidence' was proper and well-
supported."
1375
667. Canada also argues that the Panel properly fo und that the relevant scientific evidence on the
five hormones subject to the provisional ban was not "insufficient" within the meaning of Article 5.7
of the SPS Agreement.
668. Canada submits that the Panel correctly found that the existence of international standards
"implies" that sufficient evidence has existed to complete a risk assessment, in light of the
presumption of compliance that applies to measures that conform with international standards under
Article 3.2.1376 According to Canada, the Panel accepted th at this presumption could be rebutted, as it
subsequently recognized that previously sufficient evidence could subsequently become "insufficient"
within the meaning of Article 5.7 when it is "unsettled" 1377 by new studies. Canada considers that the
Panel properly excluded from the scope of its analys is under Article 5.7 the level of protection chosen
by the European Communities. Canada asserts th at the European Communities' argument that the
"sufficiency" of scientific evidence depends on th e acceptable level of risk adopted by a Member 1378
undermines the "basic logic" of the SPS Agreement , according to which Article 5.7 operates as a

1374Ibid. (referring to comments by the United States on the replies of the scientific experts, Codex,
JECFA, and the IARC to questions posed by the Panel, Panel Reports, Annex F, paras. 47 and 48).
1375Ibid., para. 82.
1376Canada's appellee's submission, para. 118 (quoting Panel Report, Canada – Continued Suspension ,
para. 7.622).

"temporary 'safety valve'" 1379 in situations where there is insu fficient scientific evidence to allow a
Member to conduct a risk assessment that fulfils the requirements of Articles 2.2 and 5.1.
669. Canada maintains that the Panel did not err in allocating to the European Communities the
burden of proving the insufficiency of the scientific evidence under Article 5.7. Canada additionally
considers that the Panel correctly character ized Article 5.7 as a "qualified exemption"
1380 from the
obligation under Article 2.2 not to maintain SPS measures without sufficien t scientific evidence and
only shifted the burden of proof under Article 5.7 to the European Commun ities once it was satisfied
that Canada had sufficiently refuted the Europ ean Communities' allegation of compliance through
positive evidence of a breach of Article 5.7. Canada posits further that this allocation of the burden of
proof is consistent with the Appellate Body's ruling in US – Wool Shirts and Blouses , because it was
for the European Communities, as the party alle ging a breach of Article 22.8 of the DSU, to
demonstrate that its implementing measure complied with Article 5.7 of the SPS Agreement.1381
670. Moreover, Canada argues that the Panel did not err in finding that, in situations where
international risk assessments have been conducted for the substances at issue, a "critical mass" of
new evidence would be required to render the rele vant scientific evidence "insufficient" for the
purposes of Article 5.7. Canada dismisses the Eur opean Communities' argument that the "critical
mass" standard excludes a priori the possibility that a WTO Member base its risk assessment on
respectable minority views, because in su ch situations there is "inherently" 1382 sufficient evidence to
perform a risk assessment that provides a basis for the SPS measure. Canada asserts that Article 5.7
only applies to situations where there is insufficien t scientific evidence so that it is not possible to
conduct a risk assessment "at all", regardless of whether a measure is based on minority or
mainstream scientific opinions. 1383 Canada adds that the notion of "critical mass" used by the Panel
does not specify how much evidence would be needed to make insufficient scientific evidence that
was previously sufficient, and does not "exclude th e possibility that a new study or series of studies
could call into question the scientific assumpti ons underpinning the current understanding of a
scientific issue."1384 Thus, Canada submits, the Panel's "critical mass" standard "correctly sets a high
threshold"1385 reflecting the presumption in this dispute th at the available scientific evidence had been
sufficient to adopt the relevant international standards.

1381Ibid., para. 115 (referring to Appellate Body Report, US – Wool Shirts and Blouses , p. 14, DSR
1997:I, 323, at 335).
1382Ibid., para. 127.
1383Ibid., para. 128.
1384Ibid.
1385Ibid.

671. Canada also asserts that the Panel did not fail to conduct an objective assessment of the facts
under Article 11 of the DSU in reaching its findings under Article 5.7 of the SPS Agreement. Canada
observes that, as the trier of facts, the Panel had the discretion to determine what weight to attach to
the statements made by the experts in the course of the proceedings, and assess their expertise and
credibility. Canada rejects the European Commun ities' allegations that th e Panel "systematically
downplay[ed]"
1386 the expert opinions indicating that the sci entific evidence was in sufficient to carry
out a risk assessment. Such allegations fail to take into account the fact that, in addition to reviewing
the written answers by the experts to the Panel's questions, the Panel was able to "observe these
experts" during the meetings with them and was able to "arrive at an assessment of their respective
expertise and their credibility in particular areas". 1387 Therefore, Canada considers that the Panel's
reliance on the views of these experts was commensurate with its function as the trier of facts, and
consequently was consistent with Article 11 of the DSU.
672. Australia agrees with the Europ ean Communities that the existence of international standards
cannot be determinative of whether there is suffi cient evidence to conduct a risk assessment under the
first requirement of Article 5.7 of the SPS Agreement.1388 Australia also considers that the Panel's
interpretation of Article 5.7 failed to attribute significance to a Member's right under Article 3.3 of the
SPS Agreement to adopt measures that result in a higher le vel of protection than would be achieved
by measures based on the relevant international standards.1389
673. New Zealand disagrees with the European Communities' claims that the Panel erred in its
assessment of Directive 2003/74/EC under Article 5.7 of the SPS Agreement. New Zealand argues
that it was incumbent upon the European Communiti es, as the Member invoking Article 5.7, to
demonstrate that the requirements of that provision have been met. 1390 New Zealand submits that the
Panel correctly concluded that the European Communities has failed to meet this burden.1391
E. The Panel's Finding that the Relevant Sc ientific Evidence in Relation to the Five
Hormones Was Not "Insufficient" Within the Meaning of Article 5.7 of the SPS
Agreement
674. Under Article 2.2 of the SPS Agreement , WTO Members are required to "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

1386Canada's appellee's submission, para. 130 (referring to European Communities' appellant's
submission, paras. 427 and 429).
1387Ibid., para. 130.
1388Australia's third participant's submission, para. 55.
1389Ibid., para. 56.
1390New Zealand's third participant's submission, para. 3.58.
1391Ibid., para. 3.60.

evidence, except as provided for in paragraph 7 of Ar ticle 5." This requirement is made operative in
other provisions of the SPS Agreement , including Article 5.1, which requires SPS measures to be
"based on" a risk assessment. At the same time, Article 2.2 excludes from its scope of application
situations in which the relevant sci entific evidence is insufficient. In such situations, the applicable
provision is Article 5.7 of the SPS Agreement. Thus, the applicability of Articles 2.2 and 5.1, on the
one hand, and of Article 5.7, on the other hand, will depend on the sufficiency of the scientific
evidence. The Appellate Body has explained that the relevant scientific evidence will be considered
"insufficient" for purposes of Article 5.7 "if the bod y 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."1392 This means that where the
relevant scientific evidence is sufficient to perfo rm a risk assessment, as defined in Annex A of the
SPS Agreement, a WTO Member may take an SPS measure onl y if it is "based on" a risk assessment
in accordance with Article 5.1 and that SPS measure is also subject to the obligations in Article 2.2.
If the relevant scientific evidence is insufficient to perform a risk assessment, a WTO Member may
take a provisional SPS measure on the basis provided in Article 5.7, but that Member must meet the
obligations set out in that provision.
675. Having discussed the relationship between Article s 2.2, 5.1 and 5.7, we now focus on the
conditions for the application of a provisional SPS measure pursuant to the latter provision.
Article 5.7 provides:
In cases where relevant scientific ev idence is insufficient, a Member
may provisionally adopt sanitary or phytosanitary measures on the
basis of available pertinent info rmation, including that from the
relevant international organizati ons as well as from sanitary or
phytosanitary measures applied by other Members. In such
circumstances, Members shall seek to obtain the additional
information necessary for a more objective assessment of risk and
review the sanitary or phytosanitary measure accordingly within a
reasonable period of time.
676. The Appellate Body has explained that Article 5.7 sets out four obligations. Two of these
obligations set conditions that must be met before a provisional SPS measure is adopted. The other
two obligations are conditions for maintaining the provisional SPS measure once it has been taken.
These four obligations are:
(1) [the measure is] imposed in resp ect of a situation where "relevant
scientific information is insufficient";

(2) [the measure is] adopted "on the basis of available pertinent
information";
(3) [the Member that adopted th e measure] "seek[s] to obtain the
additional information necessary for a more objective assessment of
risk"; and
(4) [the Member that adopted the measure] "review[s] the ... measure
accordingly within a reasonable period of time."
1393
677. Article 5.7 begins with the requirement th at the "relevant scientific evidence" be
"insufficient". As explained earlier, the relevant scientific evidence is "insufficient" where "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 Ar ticle 5.1 and as defined in Annex A to the SPS
Agreement."1394 Under Article 5.1, WTO Members are al lowed to base SPS measures on divergent or
minority views provided they are from a respected and qualified source. 1395 Thus the existence of
scientific controversy in itself is not enough to c onclude that the relevant scientific evidence is
"insufficient". It may be possible to perform a risk assessment that meets the requirements of
Article 5.1 even when there are divergent views in the scientific community in relation to a particular
risk. By contrast, Article 5.7 is concerned with s ituations where deficiencies in the body of scientific
evidence do not allow a WTO Member to arrive at a sufficiently objective conclusion in relation to
risk. When determining whether such defici encies exist, a Member must not exclude from
consideration relevant scientific evidence from any qualified and respected source. Where there is,
among other opinions, a qualified and respected scientif ic view that puts into question the relationship
between the relevant scientific evidence and the conc lusions in relation to risk, thereby not permitting
the performance of a sufficiently objective assessment of risk on the basis of the existing scientific
evidence, then a Member may adopt provisional me asures under Article 5.7 on the basis of that
qualified and respected view.
678. WTO Members' right to take provisional measures in circumstances where the relevant
scientific information is "insufficient" is also subject to the requirement that such measures be
adopted "on the basis of available pertinent inform ation". Such information may include information
from "the relevant international organizations" or deriving from SPS measures applied by other WTO
Members. Thus, Article 5.7 contemplates situations where there is some evidentiary basis indicating
the possible existence of a risk, but not enough to permit the performance of a risk assessment.
Moreover, there must be a rational and objective relationship between the information concerning a
certain risk and a Member's provisional SPS measure. In this sense, Article 5.7 provides a "temporary

1393Appellate Body Report, Japan – Agricultural Products II, para. 89.
1395See supra, section VI.E.

'safety valve' in situations where some evidence of a risk exists but not enough to complete a full risk
assessment, thus making it impossible to meet the more rigorous standards set by Articles 2.2
and 5.1."1396
679. The second sentence of Article 5.7 requires that the available pertinent information which
provides a basis for a Member's provisional SPS me asure be supplemented with "the additional
information necessary for a more objective assessment of risk" within a "reasonable period of time".
As the Appellate Body noted, these two conditions "relate to the maintenance of a provisional [SPS]
measure and highlight the provisional nature of measures adopted pursuant to Article 5.7." 1397 The
requirement that the WTO Member "shall seek to obtain the additional in formation necessary for a
more objective assessment of risk" implies that, as of the adoption of the provisional measure, a WTO
Member must make best efforts to remedy the insu fficiencies in the relevant scientific evidence with
additional scientific research or by gathering inform ation from relevant intern ational organizations or
other sources.1398 Otherwise, the provisional nature of measures taken pursuant to Article 5.7 would
lose meaning. The "insufficiency" of the scientific evidence is not a perennial state, but rather a
transitory one, which lasts only until such time as the imposing Member procures the additional
scientific evidence which allows th e performance of a more objective assessment of risk. The
Appellate Body has noted that Article 5.7 does not set out "explicit prerequisites regarding the
additional information to be collected or a specific collection procedure". 1399 Nevertheless, the WTO
Member adopting a provisional SPS measure should be able to identify the insufficiencies in the
relevant scientific evidence, and the steps that it in tends to take to obtain the additional information
that will be necessary to address these deficiencies in order to make a more objective assessment and
review the provisional measure within a reasonable pe riod of time. The additional information to be
collected must be "germane" to conducti ng the assessment of the specific risk. 1400 A M e m b e r i s
required under Article 5.7 to seek to obtain additio nal information but is not expected to guarantee
specific results. Nor is it expected to predict the actual results of its efforts to collect additional
information at the time when it adopts the SPS measur e. Finally, the Member taking the provisional
SPS measure must review it within a reasonable period of time.1401

1397Appellate Body Report, Japan – Apples, footnote 318 to para. 176. (original emphasis)
1398Pursuant to Article 10.1 of the SPS Agreement, due account shall be taken of the special needs of
developing country Members in respect of their ability to procure the additional information for a more
objective assessment of risk.
1399Appellate Body Report Japan – Agricultural Products II, para. 92.
1400Ibid.
1401"[W]hat constitutes a 'reasonable period of time' ... depends on the specific circumstances of each
case, including the difficulty of obtaining additional information necessary for the review and the
characteristics of the provisional SPS measure." (Ibid., para. 93) (original emphasis)

680. These four conditions set out in Article 5.7, however, must be interpreted keeping in mind
that the precautionary principle finds reflection in this provision.
1402 As the Appellate Body has
emphasized:
a panel charged with determining, for instance, whether "sufficient
scientific evidence" exists to warra nt the maintenance by a Member
of a particular SPS measure may, of course, and should, bear in mind
that responsible, representative governments commonly act from the
perspectives of prudence and precaution where risks of irreversible,
e.g. life-terminating, damage to human health are concerned.
1403
In emergency situations, for example, a WTO Member will take a provisional SPS measure on the
basis of limited information and the steps it takes to comply with its obligations to seek to obtain
additional information and review the measure will be assessed in the light of the exigencies of the
emergency.
681. The European Communities argues that SPS measure s are either "based on" a risk assessment
under Article 5.1, or otherwise the relevant scientif ic evidence will be "insufficient" within the
meaning of Article 5.7, so that provisional SPS measu res may be justified. We do not agree. There
may be situations where the relevant scientific ev idence is sufficient to perform a risk assessment, a
WTO Member performs such a risk assessment, but does not adopt an SPS measure either because the
risk assessment did not confirm the risk, or the ri sk identified did not exceed that Member's chosen
level of protection. Also, there may be situations where there is no pertinent scientific information
available indicating a risk such that an SPS me asure would be unwarranted even on a provisional
basis.
1. Insufficiency and the Acceptable Level of Protection
682. The European Communities argues that the Pa nel failed to take into account that the
European Communities had chosen a higher level of protection when determining whether the
relevant scientific evidence is "insufficient" within the meaning of Article 5.7 of the SPS
Agreement.1404 According to the European Communities, the context provided by Article 3.3 of the
SPS Agreement, and the cross-referenc e to Article 5 contained therein, compels a panel to consider a
Member's chosen level of protection in examining whether the requirements of Article 5.7 have been
met. As we noted earlier, Article 3.3 permits that WTO Members adopt measures which result in a
higher level of protection than the one achieved by measures based on the relevant international
standards.

1403Ibid.
1404See European Communities' appellant's submission, paras. 397 and 398.

683. In their appellee's submissions, both the United States and Canada emphasize that risk
assessment is an "objective" process aimed at iden tifying and evaluating a certain risk, and that a
Member's appropriate level of protection is therefore entirely separate from the question of whether
scientific evidence is "insufficient" to perform a risk assessment.1405 At the oral hearing, however, the
United States and Canada recognized that the chosen level of protection may have a role to play in
framing the scope and methods of a risk assessment in the particular circumstances where a WTO
Member chooses a higher level of protection than th at which would be achieved by a measure based
on the international standard.
684. The Panel noted that the terms of Article 5.1 and Annex A of the SPS Agreement "do not
indicate that a Member's level of protection is per tinent to determine whether a risk assessment can be
performed or not."1406 The Panel quoted approvingly the reasoning of the panel in EC – Approval and
Marketing of Biotech Products , which stated that "[t]he protecti on goals of a legislator may have a
bearing on the question of which risks a Member deci des to assess .... [a]nd are certainly relevant to
the determination of the measure ... to be taken fo r achieving a Member's level of protection against
risk. Yet there is no apparent link between a legi slator's protection goals and the task of assessing the
existence and magnitude of potential risks."1407 The Panel concluded that:
The assessment [of] whether there is sufficient scientific evidence or
not to perform a risk assessment should be an objective process. The
level of protection defined by each Member may be relevant to
determine the measure to be select ed to address the assessed risk, but
it should not influence the perform ance of the risk assessment as
such.
Indeed, whether a Member considers that its population should be
exposed or not to a particular risk, or at what level, is not relevant to
determining whether a risk exists and what its magnitude is. A
fortiori, it should have no effect on whether there is sufficient
evidence of the existence and magnitude of this risk.
A risk-averse Member may be inc lined to take a protective position
when considering the measure to be adopted. However, the
determination of whether scientific evidence is sufficient to assess
the existence and magnitude of a ri sk must be disconnected from the
intended level of protection.1408

1405See United States' appellee's submission, paras. 72 and 73; and Canada's appellee's submission,
paras. 121 and 122.
1406Panel Report, US – Continued Suspension , para. 7.609; Panel Report, Canada – Continued
Suspension, para. 7.587.
1407Ibid. (quoting Panel Report, EC – Approval and Marketing of Biotech Products, para. 7.3238).
1408Panel Report, US – Continued Suspension , paras. 7.610-7.612; Panel Report, Canada – Continued
Suspension, paras. 7.588-7.590.

685. A WTO Member that adopts an SPS measure resulting in a higher level of protection than
would be achieved by measures based on international standards must nevertheless ensure that its SPS
measure complies with the other requirements of the SPS Agreement, in particular Article 5.
1409 This
includes the requirement to perform a risk assessment. 1410 At the same time, we recognize that, in
order to perform a risk assessment, a WTO Member may need scientific information that was not
examined in the process leading to the adoption of the international standard. We see no basis in
Articles 3.3 and 5.1 of the SPS Agreement to conclude that WTO Me mbers choosing a higher level
of protection than would be achieved by a measure based on an international standard must frame the
scope and methods of its risk asse ssment, including the scientific information to be examined, in the
same manner as the international body that performed the risk assessment underlying the international
standard. Thus, where the chosen level of protectio n is higher than would be achieved by a measure
based on an international standard, this may have some bearing on the scope or method of the risk
assessment.1411 In such a situation, the fact that the WT O Member has chosen to set a higher level of
protection may require it to perform certain research as part of its risk assessment that is different
from the parameters considered a nd the research carried out in the risk assessment underlying the
international standard.
686. For these reasons, we disagree with the Panel's finding that "the determination of whether
scientific evidence is sufficient to assess the existence and magnitude of a risk must be disconnected
from the intended level of protection."
1412 We emphasize, however, that whatever level of protection
a WTO Member chooses does not pre-determine the out come of its determination of the sufficiency
of the relevant scientific evidence. The determin ation as to whether available scientific evidence is
sufficient to perform a risk assessment must remain, in essence, a rigorous and objective process.1413
687. The European Communities refers to the chosen level of protection to support its argument
that the existence of JECFA risk assessments for the five hormones does not necessarily mean that the
relevant scientific evidence was sufficient for th e European Communities to perform its own risk
assessment. Before the Panel, th e European Communities explained that "the evidence which served
as the basis for the 1988 and 1999-2000 JECFA evalua tions is not sufficient 'to perform a definitive
risk assessment within the meaning of Article 5.7, in particular by the WTO Members applying a high

1409Article 3.3 of the SPS Agreement.
1410Appellate Body Report, EC – Hormones, paras. 176 and 177.
1411We noted earlier that, at the or al hearing, the United States a nd Canada recognized that the
acceptable level of risk may sometimes play a role, albeit a limited one, in respect of the risk assessment.
1412Panel Report, US – Continued Suspension , para. 7.612; Panel Report, Canada – Continued
Suspension, para. 7.590.
1413The Appellate Body has held in relation to risk assessments under Article 5.1 that the assessment
"should not be distorted by preconceived views on the nature and the content of the measure to be taken; nor
should it develop into an exercise tailored to and carried out for the purpose of justifying decisions ex post
facto." (Appellate Body Report, Japan – Apples, para. 208)

level of health protection of no risk from expos ure to unnecessary additional residues in meat of
animals treated with hormones for growth promotion'."1414 We turn to this issue next.
2. Relevance of International Standards under Article 5.7 of the SPS Agreement
688. The European Communities claims that the Pane l erred in finding that the existence of
international standards demonstrates "sufficiency" of scientific evidence to perform a risk assessment
within the meaning of Article 5.1 of the SPS Agreement , and thereby precludes adoption of
provisional measures under Article 5.7. Accord ing to the European Communities, the Panel
considered that the existence of internationa l standards established an "irrebuttable presumption" 1415
that the relevant scientific evidence in this case is not "insufficient" for the purposes of Article 5.7.
689. After recalling that international standards, guidelines or recommendations existed with
respect to progesterone, testosterone, trenbolone acetate, and zeranol, the Panel observed "the
important role given" 1416 to international standards by the SPS Agreement , and recalled that
Article 3.2 of the SPS Agreement provides that measures which confor m to international standards,
guidelines or recommendations shall be presumed to be consistent with the relevant provisions of the
SPS Agreement. On this basis, the Panel concluded that:
The presumption of consistency of measures conforming to
international standards, guidelines and recommendations with the
relevant provisions of the SPS Agreement implies that these
standards, guidelines or recommendations, particularly those referred
to in this case, are based on risk assessments that meet the
requirements of the SPS Agreement. This means, therefore, that there
was sufficient evidence for JECFA to undertake the appropriate risk
assessments.
1417
690. In relation to MGA, the Panel noted that, even though Codex has not adopted a standard for
this substance, "intensive work"1418 has been performed at the international level. The Panel observed
that JECFA has conducted two risk assessments of MGA in 2000 and 2004, and that MGA is
currently at Step 7 of the Codex international sta ndards elaboration procedure. The Panel concluded

1414Panel Report, US – Continued Suspension , para. 7.604; Panel Report, Canada – Continued
Suspension, para. 7.579 (quoting European Communities' second written submission, para. 149, and reply of the
European Communities to Question 31 posed by the Panel after the first substantive meeting, Panel Reports,
Annex B-1, paras. 167-172).
1416Panel Report, US – Continued Suspension , para. 7.643; Panel Report, Canada – Continued
Suspension, para. 7.621.
1417Panel Report, US – Continued Suspension , para. 7.644; Panel Report, Canada – Continued
Suspension, para. 7.622.
1418Panel Report, US – Continued Suspension , para. 7.813; Panel Report, Canada – Continued
Suspension, para. 7.799.

that "the role of JECFA in the international ri sk assessment process is such that some degree of
relevance should be given to that work."
1419
691. On appeal, the European Communities argues that, under the Panel's interpretation, "the mere
existence of an international standard would ipso jure make it impossible for a Member to adopt
measures under Article 5.7 of the SPS Agreement."1420 According to the European Communities, the
presumption of consistency that applies to measure s that conform to international standards under
Article 3.2 of the SPS Agreement 1421 does not necessarily lead to the conclusion that the risk
assessment underlying the international standards is consistent with the SPS Agreement; nor does this
presumption establish that scientific evidence underlyi ng the international standards is sufficient to
conduct a risk assessment under Article 5.1. This is so particularly where a Member chooses not to
conform to such international standards pursuant to Article 3.2 and introduces measures that result in
a higher level of SPS protection than would be achie ved by measures based on international standards
pursuant to Article 3.3.
692. As the preamble of the SPS Agreement recognizes, one of the primary objectives of the SPS
Agreement is to "further the use of harmonized san itary and phytosanitary measures between
Members, on the basis of international standard s, guidelines and recommendations developed by the
relevant internati onal organizations". 1422 This objective finds reflection in Article 3 of the SPS
Agreement, which encourages the harmonization of SPS measures on the basis of international
standards, while at the same time recognizing the WTO Members' right to determine their appropriate
level of protection. 1423 Article 3.1 of the SPS Agreement establishes that Members shall "base their

1419Panel Report, US – Continued Suspension , para. 7.813; Panel Report, Canada – Continued
Suspension, para. 7.799.
1421Article 3.2 provides:
Sanitary or phytosanitary measures which conform to international
standards, guidelines or recommendations shall be deemed to be necessary
to protect human, animal or plant life or health, and presumed to be
consistent with the relevant provisions of this Agreement and of
GATT 1994.
1422See also Appellate Body Report, EC – Hormones, para. 165.
1423As the Appellate Body explained in EC – Hormones:
In generalized terms, the object and purpose of Article 3 is to promote the
harmonization of the SPS measures of Members on as wide a basis as
possible, while recognizing and safeguarding, at the same time, the right and
duty of Members to protect the life and health of their people. The ultimate
goal of the harmonization of SPS measures is to prevent the use of such
measures for arbitrary or unjustifiable discrimination between Members or a
disguised restriction on internationa l trade, without preventing Members
from adopting or enforcing measures which are both "necessary to protect"
human life or health and "based on scientific principles", and without
requiring them to change their appropriate level of protection.

Ibid., para. 177)

[SPS] measures on international sta ndards, guidelines or recommendations, where they exist, except
as otherwise provided in this Agreement, and in particular in paragraph 3."
693. The relevant "international standards, guidelin es or recommendations" that are referred to in
Articles 3.1 and 3.2 are those set by the internationa l organizations listed in Annex A, paragraph 3 of
the SPS Agreement, which includes Codex as the relevant standard-setting organization for matters of
food safety.1424 As we noted above, Codex adopts interna tional standards for veterinary drug residues
based on evaluations performed by JECFA. In this case, Codex has adopted international standards
for testosterone, progesterone, trenbolone acetate, and zeranol, on the basis of evaluation performed
by JECFA.1425 In addition, Codex has initiated a standard-setting process for MGA, also on the basis
of JECFA's evaluation, but this process has not yet been concluded.
694. It is therefore undisputed that JECFA has perfo rmed risk assessments fo r the six hormones at
issue and that Codex has adopted international sta ndards for five of these hormones on the basis of
JECFA's risk assessments. The fact that JECFA has performed risk assessments for all six hormones
means that the relevant scientific evidence was in its estimation sufficient to do so. Article 3.2
provides that SPS measures which conform to intern ational standards shall be deemed necessary to
protect human, animal or plant life or health, and sha ll be presumed to be consistent with the relevant
provisions of the SPS Agreement and of the GATT 1994. This presumption, however, does not
apply where a Member has not adopted a measure th at conforms with an international standard.
Article 3.2 is inapplicable where a Member chooses a level of protection that is higher than would be
achieved by a measure based on an international st andard. The presumption in Article 3.2 cannot be
interpreted to imply that there is sufficient scien tific evidence to perform a risk assessment where a
Member chooses a higher level of protection.
695. This is borne out by Article 5.7, which provides that WTO Members may adopt provisional
SPS measures "on the basis of available pertinent information, including that from the relevant
international organizations as well as from sanitary or phytosanitary measures applied by other
Members". There is no indication in Article 5.7 that a WTO Member may not take a provisional SPS
measure wherever a relevant international organi zation or another Member has performed a risk
assessment. Information from relevant internati onal organizations may not necessarily be considered
"sufficient" to perform a risk assessment, as it ma y be part of the "available pertinent information"

1424Paragraph 3(a) of Annex A of the SPS Agreement reads:
... for food safety, the standards, guidelines and recommendations
established by the Codex Alimentarius Commission relating to food
additives, veterinary drug and pesticid e residues, contaminants, methods of
analysis and sampling, and codes and guidelines of hygienic practice.
1425See supra, footnote 933.

which provides the basis for a provisional SPS measu re under Article 5.7. Moreover, scientific
evidence that may have been relied upon by an international body when performing the risk
assessment that led to the adoption of an international standard at a certain point in time may no
longer be valid, or may become insufficient in th e light of subsequent sci entific developments.
Therefore, the existence of a risk assessment performed by JECFA does not mean that scientific
evidence underlying it must be considered to be sufficient within the meaning of Article 5.7.
696. In our view, it is reasonable for a WTO Member challenging the consistency with Article 5.7
of a provisional SPS measure adopted by another Me mber to submit JECFA's risk assessments and
supporting studies leading to the adoption of intern ational standards as evidence that the scientific
evidence is not insufficient to perfo rm a risk assessment. However, such evidence is not dispositive
and may be rebutted by the Member taking the provisional SPS measure.
697. The European Communities argues that the Panel considered th e existence of international
standards as establishing an "irrebuttable presumption"
1426 that the relevant scien tific evidence in this
case is not "insufficient" for the purposes of Article 5. 7. As we pointed out above, the existence of an
international standard does not create a legal presump tion of sufficiency for purposes of Article 5.7.
The Panel recognized that "[i]t cannot be excluded that new scientific evidence or information call
into question existing evidence", and acknowledged th e possibility that "different risk assessments
reach different interpretations of the same scientific evidence." 1427 The Panel examined the specific
points raised by the European Communities concerni ng the insufficiencies it saw in the scientific
evidence considered in JECFA's risk assessment. There would not have been a need for the Panel to
undertake such an assessment if it had considered that the existence of international standards
established an irrebuttable presumption that the re levant scientific evidence was not insufficient
within the meaning of Article 5.7. Thus we find no fault with the Panel to the extent that it treated the
evidence underlying JECFA's risk assessment as havi ng probative value for determining whether the
relevant scientific evidence was insufficient. In our view, the existence of risk assessments conducted
by JECFA in relation to the five hormones at issue has probative value, but is not dispositive, of the
question of whether the relevant scientific evidence on those hormones is "insufficient" within the
meaning of Article 5.7.
698. The Panel relied on the existence of internationa l standards to adopt a "critical mass" test for
determining when scientific information that was previously considered sufficient becomes

1427Panel Report, US – Continued Suspension , para. 7.645; Panel Report, Canada – Continued
Suspension, para. 7.623.

insufficient for purposes of Article 5.7 of the SPS Agreement . The European Communities also
challenges this test on appeal. We examine this issue in the section that follows.
3. The Panel's "Critical Mass" Standard for Determining "Insufficiency" under
Article 5.7 of the SPS Agreement
699. The European Communities asserts that the Pa nel's "critical mass" standard imposed an
excessively "high quantitative and qualitative threshold" with respect to the new evidence that is
required to render "insufficient" scientific eviden ce that was previously considered sufficient. 1428
According to the European Communities, the quality of the scientific evidence is more important than
the quantity, and therefore even a single study could be considered a priori sufficient to question the
sufficiency of previous scientific evidence. 1429 The European Communities adds that the Panel's
"critical mass" standard effectively precluded the application of the precautionary principle in the
interpretation of Articles 5.1 and 5.7, because th e scientific evidence would pass immediately from a
state of insufficiency under Article 5.7 to a state of sufficiency under Article 5.1.1430
700. Both the United States and Canada accept that evidence which at some point in time was
sufficient to perform a risk assessment could b ecome insufficient at a later point in time. 1431 T h e
United States said this could happen, for example, if there was new pathway for a risk for which the
information was insufficient. 1432 Canada gave as an example th e situation in which there is new
scientific data that identifies new adverse effect s or adverse effects at lower exposure levels. 1433
Another example given by Canada is the identification of new sources of exposure.1434 The Panel also
recognized that:
... there could be situations where existing scientific evidence can be
put in question by new studies and information. There could even be
situations where evidence which supported a risk assessment is
unsettled by new studies which do not constitute sufficient relevant
scientific evidence as such to su pport a risk assessment but are
sufficient to make the existing, previously relevant scientific
evidence insufficient.
1435 (footnote omitted)

1429Ibid., para. 413.
1430Ibid., para. 427.
1431Panel Report, US – Continued Suspension , para. 7.617; Panel Report, Canada – Continued
Suspension, para. 7.593.
1434In addition, Canada mentioned the situation where there is a change in the basic understanding of a
biological event that is triggered by the chemical under assessment. (Panel Report, Canada – Continued
Suspension, para. 7.593)
1435Panel Report, US – Continued Suspension , para. 7.620; Panel Report, Canada – Continued
Suspension, para. 7.598.

701. We agree that scientific progress may lead a WT O Member and international organizations to
reconsider the risk assessment underlying an SPS measure. In some cases, new scientific
developments will permit a WTO Member to conduct a new risk assessment with the sufficient degree
of objectivity. There may be situations, however, where the new scientific developments themselves
do not permit the performance of a new risk assessment that is sufficiently objective. Such a situation
would fall within the scope of Article 5.7 of the SPS Agreement.
702. The Appellate Body has explained that "'relevant scientific evidence' will be 'insufficient'
within the meaning 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."
1436 The body of scientific evidence
underlying a risk assessment can always be supplem ented with additional info rmation. Indeed, the
nature of scientific inquiry is such that it is always possible to conduct more research or obtain
additional information. The possibility of conduc ting further research or of analyzing additional
information, by itself, should not mean that the relevant scientific evidence is or becomes insufficient.
703. Moreover, as the Panel noted, science continuously evolves. 1437 It may be useful to think of
the degree of change as a spectrum. On one extrem e of this spectrum lies the incremental advance of
science. Where these scientific advances are at the margins, they would not support the conclusion
that previously sufficient evidence has become insufficient. At the other extreme lie the more radical
scientific changes that lead to a paradigm shift. Such radical change is not frequent. Limiting the
application of Article 5.7 to situations where scientific advances lead to a paradigm shift would be too
inflexible an approach. WTO Members should be permitted to take a provisional measure where new
evidence from a qualified and respected source puts into question the relationship between the pre-
existing body of scientific eviden ce and the conclusions regarding the risks. We are referring to
circumstances where new scientific evidence casts doubts as to whether the previously existing body
of scientific evidence still permits of a sufficiently objective assessment of risk.
704. The Panel next discussed its understanding of "i nsufficiency" in the specific circumstances
where international standards exist for the particular substance. It concluded:
We therefore conclude that if relevant evidence already exists, not
any degree of insufficiency will satisfy the criterion under Article 5.7
that "relevant scientific evidence is insufficient". Having regard to
our reasoning above, particularly with respect to scientific
uncertainty and the existence of inte rnational standards, we consider

1437Panel Report, US – Continued Suspension , para. 7.645; Panel Report, Canada – Continued
Suspension, para. 7.623.

that, depending on the existing relevant evidence, there must be a
critical mass of new evidence and/or information that calls into
question the fundamental precepts of previous knowledge and
evidence so as to make relevant, previously sufficient, evidence now
insufficient. In the present case wh ere risk assessments have been
performed and a large body of quality evidence has been
accumulated, this would be possi ble only if it put into question
existing relevant evidence to the point that this evidence is no longer
sufficient to support the conclusions of existing risks assessments.
1438
(original emphasis; footnote omitted)
705. The Panel's statement that "there must be a critical mass of new evidence and/or information
that calls into question the fundamental precepts of previous knowledge and evidence so as to make
relevant, previously sufficient, evidence now insuffi cient" could be understood as requiring that the
new scientific evidence lead to a pa radigm shift. As we have said, su ch an approach is too inflexible.
Although the new evidence must call into question the relationship between the body of scientific
evidence and the conclusions concerning risk, it need not rise to the level of a paradigm shift.
706. Some of the Panel's statements intended to e xplain what it meant by "critical mass" similarly
can be understood as requiring a paradigm shift, which is too high a threshold. At the interim review
stage, the European Communities requested that th e Panel identify the provenance of the "critical
mass" standard and explain how it should be r econciled with the Appellate Body's findings in EC –
Hormones. The Panel responded as follows:
The Panel used the term "critical mass" in full knowledge of its
meaning.294 It used it in the sense of a situation where evidence
becomes quantitatively and qualitatively sufficient to call into
question the fundamental precepts of previous knowledge and
evidence. The Panel does not mean that there must be sufficient
evidence to perform a new risk assessment. Otherwise, Article 5.7 of
the SPS Agreement would become meaningless. It used the term
"critical mass" very much in its common scientific usage, i.e. the new
scientific information and evidence must be such that they are at the
origin of a change in the understanding of a scientific issue. We do
not see in what respect this approach by the Panel, which applies to
the specific situation in this case (i .e. one where a party alleges that
previously sufficient scientific ev idence has become insufficient)
would be contrary to the findings of the Appellate Body in EC –
Hormones.
1439 (original emphasis)
294In mathematics and physics "critical" is defined as "constituting or
relating to a point of transition from one state, etc. to another". "Critical
size" or "critical mass" are defined as the minimum size or mass of a body
of a given fissile material which is capable of sustaining a nuclear chain

1438Panel Report, US – Continued Suspension , para. 7.648; Panel Report, Canada – Continued
Suspension, para. 7.626.
1439Panel Report, US – Continued Suspension , para. 6.141; Panel Report, Canada – Continued
Suspension, para. 6.133.

reaction (Shorter Oxford English Dictionary, 5th edition (1993), p. 558). In
other words, the Panel assessed whether it had been provided with the
minimum evidence necessary to conc lude that knowledge has become
quantitatively and qualitatively sufficient to call into question the
fundamental precepts of previous knowledge and evidence.
707. In the reasoning quoted above, the Panel agai n required that the scientific evidence be
"sufficient to call into question the fundamental pr ecepts of previous knowledge and evidence". The
Panel's explanation that "the new scientific information and evidence must be such that they are at the
origin of a change in the understanding of a scientific issue" also connotes a paradigm shift.
708. We earlier observed that the existence of an international standard for which a risk assessment
was conducted could be offered as evidence in suppor t of an assertion that the relevant scientific
evidence is not insufficient within the meaning of Article 5.7 of the SPS Agreement . It is an
evidentiary issue in the sense that the scientific information underlyi ng the international standard has
probative value as to the sufficien cy of the scientific evidence needed for conducting a risk
assessment at a discrete point in time. However, in circumstances where a Member adopts a higher
level of protection than that reflected in the intern ational standard, the legal test that applies to the
"insufficiency" of the evidence under Article 5.7 is not made stricter. Thus, it is incorrect to use
JECFA's risk assessments as a legal benchmark for assessing insufficiency as the Panel did in this
case.
709. In the interim review, the Panel expressly recognized that it used JECFA's risk assessments as
a "benchmark":
[I]t is correct that the Panel considered that, in order to determine
whether relevant scientific evid ence was insufficient within the
meaning of Article 5.7 of the SPS Agreement, it had to take the
results of the risk assessments made by JECFA as a "benchmark" of
the existence of sufficient scientific evidence. This is in line with the
findings of the Appellate Body in Japan – Apples that the relevant
scientific evidence will be insufficient within the meaning 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, as well as with the presumption of
compliance under Article 3.2 of the SPS Agreement.
1440 (footnote
omitted)
710. We recall that the presumption in Article 3.2 is inapplicable where a WTO Member adopts an
SPS measure that results in a higher level of protection than that reflected in an international standard.
For this reason, Article 3.2 did not provide a basis for the Panel's use of the JECFA risk assessments

1440Panel Report, US – Continued Suspension , para. 6.60; Panel Report, Canada – Continued
Suspension, para. 6.55.

as the legal benchmark against which the insufficien cies in the relevant scientific evidence identified
by the European Communities had to be evalua ted. As the Appellate Body explained in EC –
Hormones:
The presumption of consistency w ith relevant provisions of the SPS
Agreement that arises under Article 3.2 in respect of measures that
conform to international standards may well be an incentive for
Members so to conform their SPS measures with such standards. It
is clear, however, that a decision of a Member not to conform a
particular measure with an intern ational standard does not authorize
imposition of a special or generalized burden of proof upon that
Member, which may, more often than not, amount to a penalty.
1441
(original emphasis)
711. The particular insufficiencies in the relevant scientific evidence identif ied by the European
Communities had to be evaluated on their own terms. As indicated earlier, the scientific evidence
underlying the risk assessments conducted by JECFA has probative value as to the sufficiency of the
scientific evidence needed to perform an assessment of risks in relation to the five hormones;
however, it was by no means dispositive of that qu estion, in particular where a WTO Member has
elected to adopt an SPS measure that does not conform to the international standard.
712. For these reasons, we reverse the Panel's finding that, where international standards exist,
"there must be a critical mass of new evidence and/or informa tion that calls into question the
fundamental precepts of previous knowledge and evidence so as to make relevant, previously
sufficient, evidence now insufficient" within the meaning of Article 5.7.1442
4. The Panel's Allocation of the Burden of Proof under Article 5.7 of the SPS
Agreement
713. We turn now to the European Communities' clai m that the Panel erred by allocating to the
European Communities the burden of demonstrati ng that Directive 2003/74/EC met the requirements
of Article 5.7 of the SPS Agreement in relation to the provisional ban on the five hormones at issue.
The European Communities argues that, by limiting its re view to the "insufficiencies" in the scientific
evidence identified by the European Communities, the Panel erroneously shifted to the European
Communities the burden of proof under Article 5.7 of the SPS Agreement .1443 In doing so, the

1442Panel Report, US – Continued Suspension , para. 7.648; Panel Report, Canada – Continued
Suspension, para. 7.626. (original emphasis)
1443European Communities' appellant's submission, paras. 380-382.

European Communities submits that the Panel misc onstrued Articles 5.1 and 5.7 to stand on a rule-
exception relationship
1444, even though Article 5.7 confers to WTO Members a "qualified right" 1445 to
take provisional measures under certain conditions. In such circumstances, the United States and
Canada should have borne the onus of demonstrating that the cond itions provided under Article 5.7
had not been met.1446
714. In particular, the European Communities challenges the following statement by the Panel:
Whereas, in the application of the burden of proof in relation to
Article 5.7 of the SPS Agreement , it should be for the party
challenging the applicability of Article 5.7 to make a prima facie case
that the relevant scientific evidence regarding the five hormones is
sufficient, it is also for the Europ ean Communities, in application of
the principle that it is for each party to prove its allegations, to
support its own allegations with appropriate evidence. This also has
to be considered in the light of th e fact that, even though in this case
the European Communities is the co mplainant, it also argues as part
of its allegations under Article 22.8 of the DSU that its implementing
measure complies with Article 5.7 of the SPS Agreement. Moreover,
we recall the consequence of the presumption of consistency with the
SPS Agreement and GATT 1994 of measures which conform to
international standards, guidelines and recommendations on the risk
assessments on which such measures are based. Since, in that
context, the European Communities argues that the relevant scientific
evidence is insufficient, we consid er that it is for the European
Communities to identify the issu es for which such evidence is
insufficient.
Therefore, we do not consider that, as Panel, we have any obligation
to go beyond the insufficiencies identified by the European
Communities. ... we deem it appr opriate to limit our review
exclusively to the "insufficien cies" expressly identified by the
European Communities in its submissions to the Panel.
1447 (footnotes
omitted)
715. The United States and Canada assert that the Pa nel correctly allocated the burden of proof
under Article 5.7 of the SPS Agreement.1448 The United States and Canada point out that the Panel
only shifted the burden of proof to the European Communities once it was satisfied that the United
States and Canada had sufficiently refuted the European Communities' allegation of compliance
through positive evidence of a breach of Article 5.7. 1449 Canada argues that the Panel correctly

1445Ibid., para. 368.
1446Ibid., para. 379.
1447Panel Report, US – Continued Suspension , paras. 7.652 and 7.653; Panel Report, Canada –
Continued Suspension, paras. 7.629 and 7.630.
1448United States' appellee's submission, para. 98; Canada's appellee's submission, para. 115.
1449United States' appellee's submission, para. 93; Canada's appellee's submission, para. 115.

identified Article 5.7 as a "qualified exemption" to Article 2.21450, while the United States dismisses as
speculative the European Communities' contention that the Panel treated Article 5.7 as an exception to
Article 5.1.1451
716. In section IV.E, we explained how we see the allocation of the burden of proof in a post-
suspension situation in which the parties disagr ee as to whether an implementing measure brings
about substantive compliance. The European Comm unities had to provide a clear description of its
implementing measure, and an adequate explana tion regarding how this measure rectifies the
inconsistencies found in the original proceedings. We recall that the definitive import ban that was
the subject of EC – Hormones and found to be inconsistent with Article 5.1 has been replaced, under
Directive 2003/74/EC, by a provisional ban relating to the five other hormones. The import ban
applies to the same products: meat from cattle treated with progesterone, testosterone, trenbolone
acetate, zeranol and MGA. The European Communiti es replaced the original definitive ban with a
provisional ban and invoked Article 5.7 as an altern ative justification to Article 5.1. Thus, the
European Communities had to provide an adequate explanation of how the provisional ban taken
under Article 5.7 rectifies the inconsistencies found in EC – Hormones . Such explanation had to
include, inter alia , an identification of the insufficiencies in the relevant scientific evidence that
precluded the European Communities from performi ng a sufficiently objective risk assessment.
Accordingly, we do not consider that the Panel e rred by limiting its review to the insufficiencies
identified by the European Communities.
717. Having said that, we referred above 1452 to the Panel's discussion of how it would allocate the
burden of proof for purposes of its analysis under Articles 5.1 and 5.7 of the SPS Agreement and we
identified several flaws in the Panel's approach, whic h we need not repeat here. We also explained
how the Panel should have allocated the burden of proof in relation to the European Communities'
contention that Directive 2003/74/EC meets the re quirements of Articles 5.1 and 5.7 of the SPS
Agreement. To the extent that the Panel did not allocate the burden of proof in its analysis of whether
Directive 2003/74/EC met the requirements of Article 5.7 of the SPS Agreement according to the
principles outlined above, we find that the Panel has erred.
718. Accordingly, we find that the Panel erred in the allocation of the burden of proof in its
examination of the consistency of Directive 2003/74/EC with Article 5.7 of the SPS Agreement.

1452See supra, para. 579.

5. The Panel's Application of Article 5.7 of the SPS Agreement

719. We turn finally to the European Communities' claim that the Panel incorrectly applied
Article 5.7 of the SPS Agreement. On appeal, the European Co mmunities asserts that the Panel
"systematically downplay[ed]"1453 and ignored "highly rele vant scientific evidence" 1454 which "go[es]
against the evaluations of the JECFA or support the position of the European Communities and that in
fact the scientific evidence was indeed insufficient" 1455 to perform a risk assessment, particularly in
the following areas: (a) effects of hormones on certain population groups; (b) dose response;
(c) bioavailability; (d) long late ncy periods for cancer and conf ounding factors; and (e) adverse
effects on growth and reproduction. 1456 The European Communities al so points to several errors
committed by the Panel when determining whether the evidence concerning the risks posed by each of
the five hormones individually was insufficient to conduct a risk assessment under Article 5.7.1457
720. The United States responds that the scientific ev idence on record, including the statements of
the experts, support the conclusion that the releva nt scientific evidence on the five hormones is and
remains sufficient to c onduct a risk assessment. 1458 Canada argues that the European Communities'
allegations are without merit, and considers that the Panel properly weighed the scientific evidence
before it. 1459
721. As we noted in subsection 3, the Panel's "c ritical mass" test imposed an excessively high
threshold in terms of the change in the scientific evidence that would make previously sufficient
evidence insufficient. Rather than requiring that the new evidence call into question the relationship
between the body of scientific evidence and the conc lusions concerning risk, the Panel's test required
a paradigm shift to the extent the evidence needed to call into question the "fundamental precepts of
previous knowledge and evidence" on the five hormon es. This erroneous threshold led the Panel to
fail to attribute significance to evidence that c ould cast doubt as to whether the relevant scientific
evidence still permits of a sufficiently objective asse ssment of risk. One such example is the Panel's
analysis of the European Communities' contention th at the relevant scientific evidence concerning the
effects of the hormones on certain categories of the population, in pa rticular pre-pubertal children,
was "insufficient" within the meaning of Article 5.7 of the SPS Agreement.

1454Ibid., para. 447.
1455Ibid., para. 427.
1456Ibid., paras. 430-436.
1457Ibid., paras. 437-447.

722. Before the Panel, the Europ ean Communities argued that the development of more sensitive
detection methods had identified lowe r endogenous levels of oestradiol in pre-pubertal children than
previously assumed by the detection method referred to in JECFA's risk assessments. According to
the European Communities, this suggested that indi viduals that have the lo west endogenous levels of
sex hormones, such as pre-pubertal children and post -menopausal women, might be at an increased
risk for adverse health effects that might be associated with exposure to exogenous sources of both
oestrogens and testosterone.1460
723. The new detection method was examined in a scientific study conducted by Klein et al.
(1994), and was reviewed by the European Communities in the 1999 Opinion. The Panel described
the Klein study, and the conclusions the European Communities derived from it, as follows:
The 1999 Opinion specifies that the hormone levels on which it relies
were determined by radio-immunoassays (RIA) and that the use of
these assays has frequently been associated with production of
variable results, particularly when used to detect low levels of
endogenous hormones. The 1999 Opinion notes that Klein et al.
(1994) developed an ultrasensitive assay (100-fold more sensitive
than RIAs) which identified values of oestradiol considerably lower
than the range of oestradiol levels found through RIAs for
prepubertal children.
1461 (footnote omitted)
724. In its analysis, the Panel recalled its earlier finding that, in order to determine that the
evidence on the five hormones was "ins ufficient" within the meaning of Article 5.7, there must be "a
critical mass of new evidence and/or information that calls into question the fundamental precepts of
knowledge and evidence so as to make relevant, prev iously sufficient, evidence now insufficient." 1462
On this basis the Panel concluded that its task w as to examine "whether th e more sensitive detection
methods which identified lower horm onal levels in prepubertal child ren than thought until now are
such as to call into question the range of physiological levels of the sex hormones in humans currently
believed to exist." 1463 The Panel referred to Dr. Sippell's testimony, which characterized the
development of ultra-sensitive detection methods as a "quantum leap in [oestrogen] assay
methodology"1464 The Panel noted Dr. Sippell's statement that "[t]he risk to children arising from
hormones that are naturally present in meat as comp ared to residues of hormonal growth promoters

1460See Panel Report, US – Continued Suspension, para. 7.664; and Panel Report, Canada – Continued
Suspension, para. 7.641.
1461Panel Report, US – Continued Suspension , para. 7.665; Panel Report, Canada – Continued
Suspension, para. 7.642.
1462Panel Report, US – Continued Suspension , para. 7.666; Panel Report, Canada – Continued
Suspension, para. 7.643.
1463Ibid.
1464Panel Report, US – Continued Suspension , para. 7.667; Panel Report, C anada – Continued
Suspension, para. 7.644 (quoting replies of the scientific experts to Question 40 posed by the Panel, Panel
Reports, Annex D, para. 328).

has, to my knowledge, been estimated for [oestradiol-17 β] only".
1465 The Panel then observed that
the 2000 Opinion stated that such new detection methods had not been validated 1466, and quoted
Dr. Boobis' opinion questioning the validity of the new study presented by the European
Communities.1467 On this basis, the Panel concluded that:
We note that the evidence presented relates only to oestradiol, but
that the claim we are examining with regard to the insufficiencies of
the evidence are with respect to the five other hormones at issue, not
oestradiol. We note furthermore that the 2002 Opinion concludes
that these more sensitive detection methods have not yet been
validated.
On the basis of the above, we ar e not convinced that the studies
discussed by the experts call into question the fundamental precepts
of previous knowledge and eviden ce so as to make relevant,
previously sufficient evidence now insufficient in relation to the
effect of the five hormones on pre-pubertal children. Particularly, it
has not been established that the data regarding the effects of
hormones on which the JECFA assessments are based are insufficient
in light of new evidence relating to the other five hormones at
issue.
1468
725. In concluding that it is "not convinced" that the ultra-sensitive assay study referred to by the
European Communities "call[s] into question the fundamental precepts of previous knowledge" in
relation to the effect of the five hormones on pre- pubertal children, the Panel applied an excessively
high threshold in relation to the new scientific evidence which is required to render previously
sufficient scientific evidence "insufficient" within the meaning of Artic le 5.7. Irrespective of whether
the Panel was itself persuaded by the Klein study, the Panel erred to the extent that it considered that a
paradigmatic shift in the scientific knowledge was re quired in order to render the scientific evidence
relied by JECFA now "insufficient" within the meaning of Article 5.7. The "insufficiency"
requirement in Article 5.7 does not imply that ne w scientific evidence must entirely displace the
scientific evidence upon which an international sta ndard relies. It suffices that new scientific
developments call into question whether the body of scientific evidence still permits of a sufficiently
objective assessment of risk.

1465Panel Report, US – Continued Suspension , para. 7.668; Panel Report, C anada – Continued
Suspension, para. 7.645 (quoting replies of the scientific experts to Question 41 posed by the Panel, Panel
Reports, Annex D, para. 335).
1466Panel Report, US – Continued Suspension , para. 7.669; Panel Report, C anada – Continued
Suspension, para. 7.646 (referring to 2000 Opinion, p. 3).
1467Ibid. (referring to replies of the scientific experts to Question 40 posed by the Panel, Panel Reports,
Annex D, paras. 325 and 326).
1468Panel Report, US – Continued Suspension , paras. 7.670 and 7.671; Panel Report, C anada –
Continued Suspension, paras. 7.647 and 7.648.

726. The Panel seemed to rely on two pieces of evidence in coming to the conclusion that the ultra-
sensitive detection method discussed in the Klein study had not yet been validated: a statement to that
effect in the 2002 Opinion 1469, and the testimony of Dr. Boobis, who questioned the validity of the
Klein study. 1470 However, the Panel record shows that at least some of the scientific experts
considered that the Klein study could possibly cast doubt as to whether the body of scientific evidence
relied on by JECFA still permitted of a sufficiently objective assessment of risks posed by the five
hormones in relation to pre-pubertal children.
727. Dr. Sippell seemed to agree with the Europ ean Communities' position that the relevant
scientific evidence on the effects of hormones in pr e-pubertal children was not "sufficient" to conduct
a risk assessment under Article 5.1. Dr. Sippell ob served that "[w]e just don't have yet everywhere
where it would be necessary the methodology, the analytical tools to m easure as sensitively as we
should do it, and therefore I think that the data available are insufficient." 1471 Dr. Sippell also
explained that:
... it is difficult to calculate the exact [hormone] production rates in
prepubertal children. ... [JECFA va lues] have been based on the, so
to speak, traditional levels measured by radio immuno assays, and
usually by radio immuno assays without prior extraction. We all
know that the sensitivity of such procedures is not enough compared
with more modern techniques ... the extractive procedures involving
radio immuno assays, but even more modern molecular base
techniques like recombinant cell bioassays, of oestrogen, oestradiol
or oestrogen activity. And these ... are significantly below the levels
previously thought, and by that the production rate is now
significantly lower. And this of course implies that any risk from
exogenous sources, for example, beef treated with hormones, treated
with oestradiol-17β, is much higher.
1472
728. Dr. De Brabander concurred, stating that "I ca nnot say that the [JECFA] data are bad ... I just
say you don't know that they are good, and you ha ve to check them with modern analytical
methods."1473 Dr. Guttenplan espoused a similar view , noting that "more accurate methods of
analysis could now be used to measure the effect of eating hormone-treated beef on blood levels of
estrogen in children and post-menopausal women."1474 He also observed that "in boys the [oestrogen]

1469Panel Report, US – Continued Suspension , para. 7.670; Panel Report, Canada – Continued
1470Panel Report, US – Continued Suspension , para. 7.669; Panel Report, Canada – Continued
Suspension, para. 7.646 (quoting replies of the scientific experts to Question 40 posed by the Panel, Panel
Reports, Annex D, paras. 325 and 326).
1471Transcript of the Panel's joint meeting with scientific experts on 27-28 September 2006, Panel
Reports, Annex G, para. 891.
1472Ibid., para. 557.
1473Ibid., para. 675.
1474Replies of the scientific experts to Question 52 posed by the Panel, Panel Reports, Annex D,
para. 413.

levels are even lower, and there I think we have to worry about developmental effects ... I still think
that these could be investigated epidemiologically or in or some type of study. We might ... need a
surrogate, perhaps saliva or urine, but I think it is perhaps the most important issue to address is the
sensitivity of children."
1475
729. Dr. Boobis, who as the Panel noted questioned the validity of the ultra-sensitive recombinant
assay used in the Klein study, also testified that the levels of oestradiol endogenously produced in pre-
pubertal children may be lower than previously th ought. In response to direct questioning by the
United States, Dr. Boobis explained that:
.... having looked at these data is that, first of all, the recombinant
assay has not yet been validated adequately, but secondly there is
evidence, when one looks at these data, to suggest that the circulating
levels of oestradiol in male ch ildren are lower than previously
thought, I would accept that, but I would not think they are as low as
in the original publication by Klein et al , because there have been
numerous publications since then using a variety of assays which
suggest that the levels are certainly higher than those very low levels
first reported.
1476
730. Although the Panel was correct in observing that the Klein study only examined endogenous
levels of oestradiol, lower leve ls of endogenous production of horm ones in humans played a key role
in the European Communities' conclusion that no safe threshold level or ADI could be established for
any of the six hormones assessed. The 1999 Opinion st ates that, in the light of "uncertainties in the
estimates of endogenous hormone pr oduction rates and metabolic cleara nce capacity, particularly in
prepubertal children, no threshold level and theref ore no ADI can be established for any of the [six]
hormones."
1477 For this reason, the Panel should have explored further the question of what relevance,
if any, the study relied on by the European Communities examining endogenous levels of oestradiol
could have in relation to potentia l adverse health effects relating to the other five hormones. During
the course of the oral hearing, the European Comm unities argued that some scientists agree with its
position that measurements of the endogenous levels of natural horm ones are relevant for synthetic
hormones that share similar toxicological properties and effects.

1475Transcript of the Panel's joint meeting with scientific experts on 27-28 September 2006, Panel
Reports, Annex G, para. 1061.
1476Ibid., para. 572.
14771999 Opinion, pp. 72 and 73. The 1999 Opinion also concludes that: "For all six hormones
endocrine, developmental, immunological, neurobioloical, immunotoxic, genotoxic, and carcinogenic effects
could be envisaged. Of the various susceptible risk groups, prepubertal children is the group of greatest
concern. Again the available data do not enable a quantitative estimate of the risk".

731. In sum, the Panel erred in its interpretati on and application of Article 5.7 of the SPS
Agreement by adopting an incorrect legal test to assess the European Communities' explanations
concerning the insufficiencies in the relevant scientific evidence.
732. The European Communities argu es further that the Panel fa iled to conduct an objective
assessment of the facts of the case, as required by Article 11 of the DSU, in its analysis under
Article 5.7. Having determined that the Panel inco rrectly interpreted and app lied Article 5.7 of the
SPS Agreement , we do not find it necessary to address the European Communities' claim that the
Panel acted inconsistently with Article 11 of the DSU.
F. Conclusions
733. We found above that the Panel drew too rigi d a distinction between the chosen level of
protection and the "insufficiency" of the releva nt scientific evidence under Article 5.7 of the SPS
Agreement.1478 We also reversed the Panel's finding that, where international standards exist, a
"critical mass of new evidence and/or information th at calls into question the fundamental precepts of
previous knowledge and evidence" is required to re nder the relevant scientific evidence "insufficient"
within the meaning of Article 5.7. 1479 We found, moreover, that the Panel erred in the allocation of
the burden of proof. 1480 Finally, we found that the Panel incorrectly interpreted and applied
Article 5.7 in determining whether the relevant sci entific evidence in relation to the five hormones
was "insufficient" within the meaning of that provision. 1481 In addition, we have found that the
Panel's analysis was compromised because its cons ultations with Drs. Boisseau and Boobis infringed
the European Communities' due process rights.1482
734. In the light of these errors, we reverse the Panel's finding that "it has not been demonstrated
that relevant scientific evidence was insufficien t, within the meaning of Article 5.7 of the
SPS Agreement, in relation to any of the five hormon es with respect to which the European
Communities applies a provisional ban." 1483 As a consequence of its finding, the Panel also
concluded that "the [European Communities'] comp liance measure does not meet the requirements of
Article 5.7 of the SPS Agreement as far as the provisional ban on pr ogesterone, testosterone, zeranol,
trenbolone acetate and melengestrol acetate is concerned." 1484 Because it is premised on the Panel's

1478See supra, para. 686.
1479See supra, para. 712.
1480See supra, para. 718.
1481See supra, para. 731.
1482See supra, section V.
1483Panel Report, US – Continued Suspension , para. 7.835; Panel Report, Canada – Continued
Suspension, para. 7.821.
1484Panel Report, US – Continued Suspension , para. 7.836; Panel Report, Canada – Continued
Suspension, para. 7.822.

earlier finding concerning the "insufficiency" of the relevant scientific info rmation, which we have
reversed, the Panel's conclusion cannot stand.
735. Given the numerous flaws that we identified in the Panel's analysis, and the highly contested
nature of the facts, we do not consider it possibl e to complete the analysis. Thus, we make no
findings on the consistency or in consistency of the European Co mmunities' provisional SPS measure
relating to progesterone, testosterone, zeranol, trenbolone acetate and MGA.
VIII. Findings and Conclusions
736. For the reasons set out in this Report, the Appellate Body:
(a) As regards the DSU:
(i) finds
 that the Panel did not err in statin g that proceedings under Article 21.5
of the DSU are open to not only the original complainant 1485, because they
may be initiated by original complainants and original respondents;
(ii) upholds the Panel's finding that "it has jurisdiction to consider the
compatibility of the [European Communities'] implementing measure with
the SPS Agreement as part of its review of the claim raised by the European
Communities with respect to Article 22.8 of the DSU"
1486;
(iii) because it has not been established that the measure found to be inconsistent
with the SPS Agreement in the EC – Hormones dispute has been
removed1487, upholds the Panel's finding that "the European Communities has
not established a violation of Articles 23.1 and 3.7 of the DSU as a result of
a breach of Article 22.8"1488;
(iv) reverses the Panel's finding that, "by maintaining its suspension of
concessions even after the notification of [Directive 2003/74/EC]", Canada is
"seeking redress of a violation with resp ect to [this Directive], within the
meaning of Article 23.1 of the DSU"
1489; and

1486Ibid., para. 7.376.
1487See subparagraphs (c) and (d) infra.
1488Panel Report, Canada – Continued Suspension, para. 7.842(b). (original emphasis)

(v) reverses the Panel's findings that Canada "made a 'determination' within the
meaning of Article 23.2(a) in relati on to Directive 2003/74/EC" on the basis
of statements made at DSB meetings and the fact that the suspension of
concessions continued subsequent to the notification of
Directive 2003/74/EC
1490, and that Canada "failed to make any such
determination consistent with the findings contained in the panel or Appellate
Body report adopted by the DSB or an arbitration award rendered under the
DSU", in breach of Article 23.2(a).1491
(b) As regards the Panel's consultations with the scientific experts, finds that the Panel
infringed the European Communities' due process rights, because the institutional
affiliation of Drs. Boisseau and Boobis compromised their appointment and thereby
the adjudicative independence and impartiality of the Panel. Accordingly, the Panel
failed to comply with its duties under Article 11 of the DSU.
(c) As regards the consistency with Article 5.1 of the SPS Agreement of the European
Communities' import ban on meat from cattle treated with oestradiol-17 β for growth-
promotion purposes, which is applied pursuant to Directive 2003/74/EC:
(i) finds that the Panel erred in its interpreta tion and application of Article 5.1 in
relation to risks of misuse and abuse in the administration of hormones to
cattle for growth-promotion purposes;
(ii) finds
 that the Panel did not err in requiring the European Communities to
evaluate specifically the risks arising from the presence of residues of
oestradiol-17β in meat or meat products from cattle treated with the hormone
for growth-promotion purposes;
(iii) finds
 that the Panel did not err in its interpretation of Article 5.1 and
paragraph 4 of Annex A of the SPS Agreement as regards quantification of
risk;
(iv) finds that the Panel erred in the alloca tion of the burden of proof in its
assessment of the consistency of Directive 2003/74/EC with Article 5.1 of the
SPS Agreement;

(v) finds
 that the Panel applied an incorrect standard of review in examining
whether the European Communities' risk assessment satisfied the
requirements of Article 5.1 and pa ragraph 4 of Annex A of the SPS
Agreement, and thereby failed to comply with its duties under Article 11 of
the DSU; and
(vi) reverses the Panel's finding that the European Communities' import ban
relating to oestradiol-17 β is not based on a risk assessment as required by
Article 5.1 of the SPS Agreement1492; however, the Appellate Body is unable
to complete the analysis and ther efore makes no findings as to the
consistency or inconsistency of the import ban relating to oestradiol-17 β
with Article 5.1 of the SPS Agreement.
(d) As regards the consistency with Article 5.7 of the SPS Agreement of the European
Communities' provisional import ban on meat from cattle treated with testosterone,
progesterone, trenbolone acetate, zeranol, and MGA, for growth-promotion purposes,
which is applied pursuant to Directive 2003/74/EC:
(i) reverses
 the Panel's finding that "the determination of whether scientific
evidence is sufficient to assess the existe nce and magnitude of a risk must be
disconnected from the intended level of protection"1493;
(ii) reverses the Panel's finding that, where intern ational standards exist, "there
must be a critical mass of new evidence and/or information that calls into
question the fundamental precepts of pr evious knowledge and evidence so as
to make relevant, previously sufficient, evidence now insufficient"1494;
(iii) finds that the Panel erred in the alloca tion of the burden of proof in its
examination of the consistency of Dir ective 2003/74/EC with Article 5.7 of
the SPS Agreement;
(iv) finds that the Panel erred in its interpreta tion and application of Article 5.7 of
the SPS Agreement by adopting an incorrect legal test in determining
whether the relevant scientific evidence was "insufficient";

1492Panel Report, Canada – Continued Suspension, paras. 7.541, 7.548 and 7.549.
1493Ibid., para. 7.590.

(v) does not find it necessary to address th e European Communities' claim that
the Panel acted inconsistently with Article 11 of the DSU; and
(vi) reverses the Panel's finding that the provisional import ban relating to
testosterone, progesterone, trenbolone acetate, zeranol, and MGA does not
meet the requirements of Article 5.7 of the SPS Agreement
1495; however, the
Appellate Body is unable to complete the analysis and therefore makes no
findings as to the consistency or incons istency of the European Communities'
provisional import ban with Article 5.7 of the SPS Agreement.
737. Because we have been unable to complete th e analysis as to whether Directive 2003/74/EC
has brought the European Comm unities into substantive complia nce within the meaning of
Article 22.8 of the DSU, the recommendations and rulings adopted by the DSB in EC – Hormones
remain operative. In the light of the obliga tions arising under Article 22.8 of the DSU, we
recommend that the Dispute Settlement Body requ est Canada and the European Communities to
initiate Article 21.5 proceedings without delay in order to resolve their disagreement as to whether the
European Communities has removed the me asure found to be inconsistent in EC – Hormones and
whether the application of the suspension of concessions by Canada remains legally valid.

1495Panel Report, Canada – Continued Suspension, paras. 7.821 and 7.822.

Signed in the original in Geneva this 19th day of September 2008 by:

David Unterhalter
Presiding Member

 _________________________ _________________________
 Georges Abi-Saab Lilia Bautista
 Member Member

ANNEX I

2 June 2008
 (08-2559)
 Original: English

UNITED STATES – CONTINUED SUSPENSION OF OBLIGATIONS IN THE
EC – HORMONES DISPUTE

Notification of an Appeal by the European Communities

under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 29 May 2008, from the Delegation of the European
Commission, is being circulated to Members.

 Notification of an Appeal by the European Communities under Article 16.4 and Article 17 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and under
Rule 20.1 of the Working Procedures for Appellate Review.

1. Pursuant to Article 16.4 and Article 17 of the DSU and to Rule 20.1 of the Working
Procedures for Appellate Review, the European Communities submits its Notice of Appeal on certain
issues of law covered in the Reports of the Panels in DS320, United States – Continued Suspension of
Obligations in the EC – Hormones Dispute and DS321, and certain legal interpretati ons developed by the Panels
in those Reports.
2. The European Communities seeks review by the Appellate Body of the following errors of
law and legal interpretation contained in the Reports of the Panels:
(a) The Panels incorrectly interpreted and app lied the words "recourse to dispute settlement in
accordance with the rules and procedures of th is Understanding" in Article 23.2(a) of the
DSU in the presence of an implementation measure in a post-retaliation situation. This is due
principally to the Panels' incorrect interpreta tion of Article 21.5 of the DSU. The Panels'
errors are contained in particular in paragra phs 7.246 to 7.249 and 7.346 to 7.359 of the Panel
Report in DS320 and paragraphs 7.239 to 7.242 and 7.344 to 7.357 of the Panel Report in
DS321.
(b) The Panels erred in failing to make a proper finding of violation of Article 23.1 read together
with Article 22.8 and 3.7 of the DSU when stating that "to the extent the measure found to be

inconsistent with the SPS Agreement in the EC – Hormones dispute … has not been removed
by the European Communities, [the United States and Canada] have not breached Article 22.8
of the DSU; and to the extent that Artic le 22.8 has not been breached, the European
Communities has not established a violation of Articles 23.1 and 3.7 of the DSU as a result of
a breach of Article 22.8". This error is due to the Panels' incorrect interpretation of
Article 22.8 of the DSU and in particular the words "the measure found to be inconsistent
with a covered agreement has been removed" therein. The Panels' conclusion and the
corresponding reasoning are contained in paragr aphs 7.857 and 7.252 to 7.386 of the Panel
Report in DS320 and paragraphs 7.842 and 7.245 to 7.383 of the Panel Report in DS321.
(c) The Panels went beyond their terms of reference and assumed the function of Article 21.5
DSU panels contrary to Articles 7 and 21.5 of the DSU. This appears in particular in
paragraph 8.3 of the two Pane l Reports and paragraphs 7.1 50 to 7.182, 7.270 to 7.291
and 7.360 to 7.379 of the Panel Report in DS320 and paragraphs 7.137 to 7.164, 7.286
to 7.307 and 7.358 to 7.376 of the Panel Report in DS321.
(d) The Panels failed to respect the fundament al principle of due process when selecting and
taking the advice of scientific experts under Articles 13.2 of the DSU and 11.2 of the SPS
Agreement with the result that the Panels failed to make an objective assessment of the matter
before them in breach of Article 11 of the DSU. This appears in particular in paragraphs 7.55
to 7.99 and 6.21 to 6.25 and the subsequent analysis of the Panel under the SPS Agreement in
paragraphs 7.387 to 7.846 of the Panel Report in DS320 and paragraphs 7.53 to 7.96 and the
subsequent analysis of the Panel under the SPS Agreement in paragraphs 7.384 to 7.831 of the
Panel Report in DS321.
(e) The Panels failed to correctly determine and apply the standard of review under in particular
Articles 5.1 and 5.7 of the SPS Agreement in breach thereof and in breach of Article 11 of the
DSU. The Panels seriously mischaracterised and misinterpreted the evidence on which the
European Communities based itself and conducted a de novo review of the matter before them
and inter alia failed to take into account or properly evaluate the scientific basis of the
European Communities' measure. They also failed to attach proper legal relevance to genuine
uncertainties and scientific controversies on the matter before them and arbitrarily chose
between the opinions of their experts and those pr esented by the other parties to the disputes.
The Panels also relied incorrectly on the opinion s of Codex Alimentarius and JECFA. This
appears inter alia in paragraphs 7.412 to 7.427 and pa ragraphs 7.435 to 7.846 of the Panel
Report in DS320 and paragraphs 7.403 to 7.418 and paragraphs 7.426 to 7.831 of the Panel
Report in DS321.
(f) The Panels failed to correctly determine and apply the burden of proof under the SPS
Agreement and in particular Articles 5.1 and 5.7 thereof . The Panels imposed the burden of
proof on the European Communities to prove the consistency of its measure with the SPS
Agreement and in particular Articles 5.1 and 5.7 thereof. This appears in particular in
paragraphs 7.380 to 7.386 and pa ragraphs 7.435 to 7.846 of the Panel Report in DS320 and
paragraphs 7.377 to 7.383 and paragraphs 7.426 to 7.831 of the Panel Report in DS321.
(g) The Panels incorrectly interpre ted and applied Article 5.1 of the SPS Agreement and failed to
make an objective assessment of the matter before them in breach of Article 11 of the DSU.
The Panels erroneously adopted an overly restri ctive notion of "an assessment, as appropriate
to the circumstances, of the risk" under Article 5.1 of the SPS Agreement as informed by
Article 5.2 thereof, ignored that the EC ri sk assessments had focussed on and addressed the
particular risk at stake and required that th e risk be quantified. The Panels' erroneous
assessments arose out of its application of an in appropriate standard of review, as set out in
paragraph (e) above. In particular, it arbitrarily chose between the opinions of their scientific
experts in their review of the matter before them. This appears in particular in

paragraphs 7.435 to 7.579 of the Panel Report in DS320 and paragraphs 7.426 to 7.549 of the
Panel Report in DS321.
(h) The Panels incorrectly interpre ted and applied Article 5.7 of the SPS Agreement and failed to
make an objective assessment of the matter before them in breach of Article 11 of the DSU.
The Panels incorrectly interpreted the relationshi p of Article 5.7 with the other provisions of
the SPS Agreement and in particular Articles 3.2, 3.3 and 5.1 thereof and adopted and applied
an erroneous criterion of critical mass of new scientific evidence and/or information for the
purposes of applying Article 5.7. The Pa nels' erroneous assessments arose out of its
application of an inappropriate standard of review, as set out in pa ragraph (e) above. In
particular, it arbitrarily chose between the opinions of its scientific experts in their review of
the matter before them. This appears in particul ar in paragraphs 7.580 to 7.837 of the Panel
Report in DS320 and paragraphs 7.550 to 7.823 of the Panel Report in DS321.
(i) The Panels erred in making a suggestion that insufficiently clarifies the implications of their
findings contrary to Article 3.7 and 19.1 of the DSU. This appears in particular in
paragraphs 8.2 and 8.3 of the Panel Reports.

ANNEX II

16 June 2008
 (08-2784)
 Original: English

UNITED STATES – CONTINUED SUSPENSION OF OBLIGATIONS IN THE
EC – HORMONES DISPUTE

Notification of an Other Appeal by the United States

under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 10 June 2008, from the Delegation of the United States, is
being circulated to Members.

Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") and Rule 23 of the Working Procedures for Appellate Review , the
United States hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the Report of the Panel on United States – Continued Suspension of Obligations in the
EC – Hormones Dispute (WT/DS320/R) ("Panel Report") and certa in legal interpretations developed
by the Panel.

1. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
United States breached Article 23.1 of the DSU (e.g ., Panel Report, paras. 7.250, 7.856(a)). This
conclusion is in error and is based on erroneous fi ndings on issues of law and legal interpretations,
including the Panel's findings that, by maintaining its suspension of concessions after the notification
by the European Communities ("EC") of Directive 2003/74/EC, the United States was seeking the
redress of a violation of obligations under a c overed agreement without having recourse to, and
abiding by, the rules and procedures of the DSU (e.g ., Panel Report, paras. 7.215, 7.856(a)), and the
Panel's interpretation and understanding of the legal basis for the U.S. suspension of concessions (e.g.,
Panel Report, paras. 7.209-7.214).

2. The United States also seeks review of the Pa nel's conclusion that the United States breached
DSU Article 23.2(a) (e.g., Panel Report, paras. 7.245, 7.856(b)). This conclusion is in error and is
based on erroneous findings on issues of law and le gal interpretations, including the Panel's findings
that the United States made a determination to the effect that a violation had occurred without
recourse to dispute settlement in accordance with the rules and procedures of the DSU (e.g., Panel
Report, paras. 7.239, 7.856(b)), on the basis of U.S. statements made at the meetings of the Dispute
Settlement Body on November 1 and December 7, 2003 (e.g., Panel Report paras. 7.223-7.230) and/or
the continuation of the U.S. suspension of concessions after the EC's notification of
Directive 2003/74/EC (e.g., Panel Report paras. 7.226, 7.230, 7.232).

3. The United States seeks review of the Panel's suggestion that the United States should have
recourse to the rules and procedures of the DSU wi thout delay (e.g., Panel Report paras. 6.45, 8.3)
and the Panel's conclusion that it was restricted from a direct determination of the compatibility of
Directive 2003/74/EC with the covered agreements (e.g., Panel Report paras. 7.162-7.164, 7.360,
7.855, 8.3). The suggestion and conclusion are in error and based on erroneous findings on issues of
law and related legal interpretati ons. However, the Appellate Body would not need to review the
suggestion and conclusion if it reverses the Panel's findings an d conclusions on DSU Articles 23.1
and 23.2(a).

ANNEX III

16 June 2008
 (08-2783)
 Original: English

Notification of an Other Appeal by Canada

under Article 16.4 and Article 17 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU),
and under Rule 23(1) of the Working Procedures for Appellate Review

 The following notification, dated 10 June 200 8, from the Delegation of Canada, is being
circulated to Members.

 Pursuant to paragraph 4 of Article 16 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (the "DSU") and paragra ph 1 of Rule 23 of the Working
Procedures for Appellate Review , the Government of Canada here by submits its Notice of Other
Appeal concerning certain other issues of law covered in the Panel Report on (WT/DS321/R) and certain legal
interpretations developed by the Panel.

 In the view of the Government of Canada, th e Panel erred in interpreting Article 23 of the
DSU in isolation from Article 22.8 of the DSU a nd committed an error in law by applying, in
particular, Article 23.1 and 23.2(a) of the DSU to th e situation of post-retaliation in this case. These
errors are contained in paragraphs 7.162 to 7.164, 7.189 to 7.244 and 7.841 of the Panel Report.

 The Government of Canada is also of the view that the Panel erred in finding that by
continuing to suspend concessions vis-à-vis the European Communities following its notification to
the Dispute Settlement Body of Directive 2003/74/ EC Canada was: (i) seeking the redress of a
violation of obligations under a covered agreement without having recourse to, and abiding by, the
rules and procedures of the DSU in violation of Article 23.1 of the DSU; and (ii) making a
determination to the effect that a violation had occurred without having recourse to dispute settlement
in accordance with the rules and procedures of the DS U, in violation of Article 23.2(a) of the DSU.
These errors are due to the Panel's misinterpretati on of the legal basis for Canada's suspension of
concessions. The Panel's findings and corresponding reasoning are contained in paragraphs 7.841 and
7.189 to 7.244 of its report.

 In the alternative, should the Appellate Body confirm the findings of the Panel in respect of
DSU Article 23.1 and 23.2(a) in relation to Canada, the Government of Canada submits that the Panel
erred in stating that it did not have jurisdiction to determine the compatibility of Directive 2003/74/EC
with the covered agreements and by making the suggestion that Cana da should have recourse to the

rules and procedures of the DSU without delay in order to implement its findings under Article 23 of
the DSU. These statements are contained in paragr aph 8.3 of the Panel Report and are contrary to
Articles 3.3, 3.7, 19.2 and 22.8 of the DSU.

 The Government of Canada respectfully request s the Appellate Body to reverse the findings
and conclusions of the Panel referred to above a nd to modify accordingly the recommendations of the
Panel.

ANNEX IV –

PROCEDURAL RULING OF 10 JULY TO ALLOW
PUBLIC OBSERVATION OF THE ORAL HEARING

10 July 2008

United States – Continued Suspension of Obligations in the EC – Hormones Dispute
AB-2008-5

AB-2008-6

Procedural Ruling

1. On 3 June 2008, Canada, the European Co mmunities, and the United States each filed a
request to allow public observation of the oral hearing in these proceedings. 1 The participants argued
that nothing in the Understanding on Rules and Procedures Governing the Settlement of Disputes (the
"DSU") or the Working Procedures for Appellate Review (the " Working Procedures") precludes the
Appellate Body from authorizing public observation of the oral hearing. On 4 June 2008, we invited
the third participants to comment in writing on the requests of Canada, th e European Communities,
and the United States. In particular, we asked third parties to provide their views on the permissibility
of opening the hearing under the DSU and the Working Procedures, and, if they so wished, on the
specific logistical arrangements proposed in the requests. We received comments on 12 June 2008
from Australia, Brazil, China, India, Mexico, Ne w Zealand, Norway, and the Separate Customs
Territory of Taiwan, Penghu, Kinmen, and Matsu. Australia, New Zealand, Norway, and the Separate
Customs Territory of Taiwan, Penghu, Kinmen, and Matsu expressed their support for the request of
the participants. Brazil, China, India, and Me xico requested the Appellate Body to deny the
participants' request. According to these third participants, the or al hearing forms part of the
proceedings of the Appellate Body and, therefore, is subject to the requirement of Article 17.10 of the
DSU that "[t]he proceedings of the Appellate Body shall be conf idential." On 16 June 2008, we
invited Canada, the European Communities, and the United States to comment on the submissions
made by the third participants. We also invited third participants who wish ed to do so to submit
comments on the submissions made by the other third participants. Additional comments from
Canada, the European Communities, and the United St ates were received on 23 June 2008. We held
an oral hearing with the participants and third pa rticipants on 7 July 2008 exclusively dedicated to
exploring the issues raised by the request of the par ticipants. The participants and third participants
were invited to submit by close of business, 8 July 2008, additional comments relating specifically to
the technical modalities proposed by the particip ants for public observation. Comments were
received from Brazil, China, India, and Mexico, as well as Canada, the European Communities, and
the United States.

2. We consider it necessary that a ruling is made by us on the request of the participants without
delay. Accordingly, we give a ruling with concise reasons. These reasons may be further elaborated
in the Appellate Body report.

1The participants expressed a preference for simu ltaneous, closed-circuit television broadcast to
another room. As alternatives, they mentioned delayed television broadcast and having a separate session for
the third participants who elect not to participate in the open hearing.

3. The participants have different views on the scope of the term "proceedings" in Article 17.10
of the DSU. The European Communities argues th at the term "proceedings" in Article 17.10 should
be interpreted narrowly as referring to the Appellate Body's internal work and does not include its oral
hearing.2 The United States refers to the Recomme ndations by the Preparatory Committee for the
WTO. The United States contends that the Pr eparatory Committee viewed Article 17.10 as focused
on the deliberations of the Appellate Body. 3 Canada concedes that the term "proceedings" covers the
oral hearing. A similar view has been put forward by Brazil, China, India, and Mexico. We consider
the term "proceedings" to mean the entire proces s by which an appeal is prosecuted, from the
initiation of an appeal to the circulation of the Appe llate Body report, including the oral hearing. This
is also how the Appellate Body understood the term in Canada – Aircraft .4 Having agreed with this
broad interpretation of the term "proceedings", we now consider the precise meaning and scope of the
confidentiality requirement in Article 17.10.

4. The third participants that object to the re quest to allow public observation argue that the
confidentiality requirement in Article 17.10 is abso lute and permits of no de rogation. We disagree
with this interpretation because Article 17.10 must be read in context, particularly in relation to
Article 18.2 of the DSU. The second sentence of Article 18.2 expressly provides that "[n]othing in
this Understanding shall preclude a party to a dis pute from disclosing statements of its own positions
to the public". Thus, under Article 18.2, the parti es may decide to forego confidentiality protection in
respect of their statements of position. With th e exception of India, the participants and third
participants agreed that the term "statements of its own positions" in Article 18.2 extends beyond the
written submissions referred to in the first sentence of Article 18.2, and includes oral statements and
responses to questions posed by the Appellate Body at the oral hearing. The third sentence of
Article 18.2 states that "Members shall treat as confidential information submitted by another Member
to the panel or the Appellate Body which that Member has designated as confidential." This
provision would be redundant if Article 17.10 were in terpreted to require abso lute confidentiality in
respect of all elements of appellate proceedings. There would be no need to require, pursuant to
Article 18.2, that a Member designate certain in formation as confidential. The last sentence of
Article 18.2 ensures that even such designation by a Member does not put an end to the right of
another Member to make disclosure to the pub lic. Upon request, a Member must provide a non-
confidential summary of the information contained in its written submissions that it designated as
confidential, which can then be disclosed to th e public. Thus, Article 18.2 provides contextual
support for the view that the confidentiality rule in Article 17.10 is not absolute. Otherwise, no
disclosure of written submissions or other statem ents would be permitted during any stage of the
proceedings.

5. In practice, the confidentiality requirement in Article 17.10 has its limits. Notices of Appeal
and Appellate Body reports are discl osed to the public. Appellate Bo dy reports contain summaries of
the participants' and third participants' written and oral submissions and frequently quote directly from
them. Public disclosure of Appellate Body reports is an inherent and necessary feature of our rules-
based system of adjudication. Consequently, u nder the DSU, confidentiality is relative and time-
bound.

2European Communities' request for an open hearing, para. 9. Norway also argued for a narrower
understanding of the term "proceedings".
3United States' comments on the third participants' submissions regarding open hearings, paras. 5 and 6
(referring to Establishment of the Appellate Body: Recommendations by the Preparatory Committee for the
WTO approved by the Dispute Settlement Body on 10 February 1995 (WT/DSB/1), para. 9).
4Appellate Body Report, Canada – Aircraft, para. 143. However, we note that that case did not involve
a request to lift confidentiality; rather, that dispute co ncerned a request for additional confidentiality protection
for business confidential information.

6. In our view, the confidentiality requiremen t in Article 17.10 is more properly understood as
operating in a relational manner.
5 There are different sets of relationships that are implicated in
appellate proceedings. Among them are the following relationships. First, a relationship between the
participants and the Appellate Body. Secondly, a relationship between the third participants and the
Appellate Body. The requirement that the proceedi ngs of the Appellate Body are confidential affords
protection to these separate relationships and is intend ed to safeguard the inter ests of the participants
and third participants and the adj udicative function of the Appellate Body, so as to foster the system
of dispute settlement under conditions of fairness, im partiality, independence and integrity. In this
case, the participants have jointly requested author ization to forego confidentiality protection for their
communications with the Appellate Body at the oral hearing. The request of the participants does not
extend to any communications, nor touches upon the re lationship, between the third participants and
the Appellate Body. The right to confidentiality of third participants vis-à-vis the Appellate Body is
not implicated by the joint request. The question is thus whether the request of the participants to
forego confidentiality protection sa tisfies the requirements of fairness and integrity that are the
essential attributes of the appellate process and defi ne the relationship between the Appellate Body
and the participants. If the request meets these st andards, then the Appellate Body would incline
towards authorizing such a joint request.

7. We note that the DSU does not specifically provide for an oral hearing at the appellate stage.
The oral hearing was instituted by the Appellate Body in its Working Procedures, which were drawn
up pursuant to Article 17.9 of the DSU. The conduct and organization of the oral hearing falls within
the authority of the Appellate Body ( compétence de la compétence ) pursuant to Rule 27 of the
Working Procedures. Thus, the Appellate Body has the power to exercise control over the conduct of
the oral hearing, including authorizing the lifting of confidentiality at the joint request of the
participants as long as this does not adversely affect the rights and interests of the third participants or
the integrity of the appellate process. As we observed earlier, Article 17.10 also applies to the
relationship between third participants and the Appe llate Body. Nevertheless, in our view, the third
participants cannot invoke Article 17.10, as it applies to their relationship with the Appellate Body, so
as to bar the lifting of confidentiality protection in the relationship between th e participants and the
Appellate Body. Likewise, authorizing the partic ipants' request to forego confidentiality, does not
affect the rights of third participants to preserve the confidentiality of their communications with the
Appellate Body.

8. Some of the third participants argued that the Appellate Body is itself constrained by
Article 17.10 in its power to authorize the lifting of confidentiality. We agree that the powers of the
Appellate Body are themselves circumscribed in that certain aspects of confidentiality are incapable
of derogation—even by the Appellate Body—whe re derogation may undermine the exercise and
integrity of the Appellate Body's adjudicative functi on. This includes the situation contemplated in
the second sentence of Article 17.10, which provides that "[t]he reports of the Appellate Body shall be
drafted without the presence of the parties to the di spute and in the light of the information provided
and the statements made." As noted by the partic ipants, the confidentiality of the deliberations is
necessary to protect the integrity, impartiality, and independence of the appellate process. In our
view, such concerns do not arise in a situation wher e, following a joint request of the participants, the
Appellate Body authorizes the lifting of the confidentia lity of the participants' statements at the oral
hearing.

9. The Appellate Body has fostered the active pa rticipation of third parties in the appellate
process in drawing up the Working Procedures and in appeal practice. Article 17.4 provides that third
participants "may make written submissions to, a nd be given an opportunity to be heard by, the
Appellate Body." In its Working Procedures, the Appellate Body has given full effect to this right by
providing for participation of third participants during the entirety of the oral hearing, while third

5This relational view of rights and obligations of confidentiality is consistent with the approach
followed in domestic jurisdictions with respect to similar issues, such as privilege.

parties meet with panels only in a separate session at the first substantive meeting. Third participants,
however, are not the main parties to a dispute. Rather, they have a systemic interest in the
interpretation of the provisions of the covered agreements that may be at issue in an appeal. Although
their views on the questions of legal interpretation that come before the Appellate Body are always
valuable and thoroughly considered, these issues of legal interpretation are not inherently confidential.
Nor is it a matter for the third participants to de termine how the protection of confidentiality in the
relationship between the participants and the Appellate Body is best dealt with. In order to sustain
their objections to public observation of the oral hear ing, third participants would have to identify a
specific interest in their relationship with the Appella te Body that would be adversely affected if we
were to authorize the participants' request—in this case, we can discern no such interests.

10. The request for public observation of the oral hearing has been made jointly by the three
participants, Canada, the European Communities, and the United States. As we explained earlier, the
Appellate Body has the power to authorize a joint request by the participants to lift confidentiality,
provided that this does not affect the confidentiality of the relationship between the third participants
and the Appellate Body, or impair the integrity of the appellate process. The participants have
suggested alternative modalities that allow for public observation of the oral hearing, while
safeguarding the confidentiality protection enjoyed by the third participants. The modalities include
simultaneous or delayed closed-circuit television broadcasting in a r oom separate from the room used
for the oral hearing. Finally, we do not see the public observation of the oral hearing, using the means
described above, as having an adverse impact on the integrity of the adjudicative functions performed
by the Appellate Body.

11. For these reasons, the Division authorizes the public observation of the oral hearing in these
proceedings on the terms set out below. Accordingly, pursuant to Rule 16(1) of the Working
Procedures, we adopt the following additional procedures for the purposes of these appeals:

(a) The oral hearing will be open to public ob servation by means of simultaneous closed-
circuit television. The closed-circuit tele vision signal will be shown in a separate
room to which duly-registered delegates of WTO Members and members of the
general public will have access.
(b) Oral statements and responses to questions by third participants wishing to maintain
the confidentiality of their submissions will not be subject to public observation.
(c) Any third participant that has not alread y done so may request authorization to
disclose its oral statements and responses to questions on the basis of paragraph (a),
set out above. Such requests must be recei ved by the Appellate Body Secretariat no
later than 5:30 p.m. on 18 July 2008.
(d) An appropriate number of seats will be reserved for delegates of WTO Members in
the room where the closed-circuit broadcast will be shown.
(e) Notice of the oral hearing will be provid ed to the general public through the WTO
website. WTO delegates and members of the general public wishing to observe the
oral hearing will be required to register in advance with the WTO Secretariat.
(f) Should practical considerations not allow si multaneous broadcast of the oral hearing,
deferred showing of the video recording will be used in the alternative.