EUROPEAN COMMUNITIES – MEASURES AFFECTING ASBESTOS AND ASBESTOS-CONTAINING PRODUCTS AB-2000-11
Document: Report of the Appellate Body
Date: 12 March 2001
Document codes: WT/DS135/AB/R
Complainant: Canada
Respondent: EU
Third parties: Brazil, Zimbabwe, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. 2  Technical Barriers to Trade (TBT)Art. 2, 5  Sanitary and Phytosanitary Measures (SPS)Art. III, XI, XXIII:1(b)  GATT 1994

EUROPEAN COMMUNITIES – MEASURES AFFECTING ASBESTOS
AND ASBESTOS-CONTAINING PRODUCTS
AB-2000-11
Report of the Appellate Body

APPELLATE BODY
European Communities – Measures
Affecting Asbestos and Asbestos-Containing
Products
Canada, Appellant/Appellee
European Communities, Appellant/Appellee
Brazil, Third Participant
United States, Third Participant
AB-2000-11
Present:
Feliciano, Presiding Member
Bacchus, Member
Ehlermann, Member
I. Introduction
1. Canada appeals certain issues of law and legal interpretations developed in the Panel Report
in European Communities – Measures Affecting Asbestos and Asbestos-Containing Products (the
"Panel Report").1 The Panel was established to consider claims made by Canada regarding French
Decree No. 96-1133 concerning asbestos and products containing asbestos ( décret no.
96-1133 relatif à l’interdiction de l’amiante, pris en application du code de travail et du code de la
consommation
 ) ("the Decree"), which entered into force on 1 January 1997. 2
2. Articles 1 and 2 of the Decree set forth prohibitions on asbestos and on products containing
asbestos fibres, followed by certain limited and temporary exceptions from those prohibitions:
Article 1
I. For the purpose of protecting workers, and pursuant to
Article L. 231-7 of the Labour Code, the manufacture, processing,
sale, import, placing on the domestic market and transfer under any
title whatsoever of all varieties of asbestos fibres shall be prohibited,
regardless of whether these substances have been incorporated into
materials, products or devices.

1, 18 September 2000.
2Journal officiel, 26 December 1996.

II. For the purpose of protecting consumers, and pursuant to
Article L. 221.3 of the Consumer Code, the manufacture, import,
domestic marketing, exportation, possession for sale, offer, sale and
transfer under any title whatsoever of all varieties of asbestos fibres or
any product containing asbestos fibres shall be prohibited.
III. The bans instituted under Articles I and II shall not prevent
fulfilment of the obligations arising from legislation on the
elimination of wastes.
Article 2
I. On an exceptional and temporary basis, the bans instituted
under Article 1 shall not apply to certain existing materials, products
or devices containing chrysotile fibre when, to perform an equivalent
function, no substitute for that fibre is available which:
- On the one hand, in the present state of scientific
knowledge, poses a lesser occupational health risk
than chrysotile fibre to workers handling those
materials, products or devices;
- on the other, provides all technical guarantees of
safety corresponding to the ultimate purpose of the
use thereof.
II. The scope of application of paragraph I of this Article shall
cover only the materials, products or devices falling within the
categories shown in an exhaustive list decreed by the Ministers for
Labour, Consumption, the Environment, Industry, Agriculture and
Transport. To ascertain the ju stification for maintaining these
exceptions, the list shall be re-examined on an annual basis, after
which the Senior Council for the Prevention of Occupational Hazards
and the National Commission for Occupational Health and Safety in
Agriculture shall be consulted.
The remaining operative provisions of the Decree contain additional rules governing the grant of an
exception (Articles 3 and 4), the imposition of penalties for violation of the prohibition in Article 1
(Article 5), and the temporary exclusion of certain "vehicles" and "agricultural and forestry
machinery" from aspects of the prohibition (Article 7). Further factual aspects of this dispute are set
forth in paragraphs 2.1 – 2.7 of the Panel Report, and the Decree is reproduced in its entirety as
Annex I in the Addendum to the Panel Report.

3
3. Canada claimed that the Decree is inconsistent with a number of obligations of the
European Communities under Article 2 of the Agreement on Technical Barriers to Trade (the
"TBT Agreement "), Articles III and XI of the General Agreement on Tariffs and Trade 1994 (the
"GATT 1994"), and that, under Article XXIII:1(b) of the GATT 1994, the Decree nullified or

3WT/DS135/R/Add.1, pp. 3-6.

impaired advantages accruing to Canada directly or indirectly under the Marrakesh Agreement
Establishing the World Trade Organization (the "WTO Agreement "), or impeded the attainment of an
objective of that Agreement.
4
4. In the Panel Report, circulated to WTO Members on 18 September 2000, the Panel concluded
that:
(a) … the "prohibition" part of the Decree does not fall within the
scope of the TBT Agreement. The part of the Decree relating
to "exceptions" does fall within the scope of the TBT
Agreement. However, as Canada has not made any claim
concerning the compatibility with the TBT Agreement of the
part of the Decree relating to exceptions, the Panel refrains
from reaching any conclusion with regard to the latter.
(b) … chrysotile asbestos fibres as such and fibres that can be
substituted for them as such are like products within the
meaning of Article III:4 of the GATT 1994. Similarly, the
Panel concludes that the asbestos-cement products and the
fibro-cement products for which sufficient information has
been submitted to the Panel are like products within the
meaning of Article III:4 of the GATT 1994.
(c) With respect to the products found to be like, the Panel
concludes that the Decree violates Article III:4 of the
GATT 1994.
(d) However, … the Decree, insofar as it introduces a treatment of
these products that is discriminatory under Article III:4, is
justified as such and in its implementation by the provisions of
paragraph (b) and the introductory clause of Article XX of the
GATT 1994.
(e) Finally, … Canada has not established that it suffered non-
violation nullification or impairment of a benefit within the
meaning of Article XXIII:1(b) of the GATT 1994.

5
5. Having found that the Decree is subject to, and inconsistent with, the obligations set forth in
Article III:4 of the GATT 1994, the Panel did not deem it necessary to examine the claims of Canada
under Article XI of the GATT 1994.
6

4Panel Report, paras. 1.1 and 1.2. In its request for the establishment of a panel (WT/DS/135/3,
9 October 1998), Canada also claimed that the Decree is inconsistent with the obligations of the European
Communities under Articles 2 and 5 of the Agreement on the Application of Sanitary and Phytosanitary
Measures (the "SPS Agreement "). However, Canada did not pursue this claim in its written or oral arguments
before the Panel.
5Panel Report, para. 9.1.
6Ibid., para. 8.159.

6. On 23 October 2000, Canada notified the Dispute Settlement Body (the "DSB") of its
decision to appeal certain issues of law covered in the Panel Report and certain legal interpretations
developed by the Panel, pursuant to Article 16.4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes (the "DSU"), and filed a Notice of Appeal with the
Appellate Body pursuant to Rule 20 of the Working Procedures for Appellate Review (the
"Working Procedures
 ").
7 On 16 November 2000, Canada filed an appellant's submission.
8 O n
21 November 2000, the European Communities filed an other appellant's submission.
9 O n
1 December 2000, Canada and the European Communities each filed an appellee's submission.
10 On
the same day, Brazil and the United States each filed a third participant's submission.
11
7. On 21 November 2000, the Appellate Body received a letter from Zimbabwe indicating its
interest in attending the oral hearing in this appe al. Zimbabwe participated in the proceedings before
the Panel as a third party which had notified its interest to the DSB under Article 10.2 of the DSU, but
it did not file a third participant's submission in the appeal. No participant or third participant
objected to Zimbabwe's request. On 15 December 2000, the Members of the Division hearing this
appeal informed Zimbabwe, the participants and third participants, that Zimbabwe would be allowed
to attend the oral hearing as a passive observer.
8. On 20 December 2000, the Appellate Body informed the DSB that, due to the exceptional
workload of the Appellate Body, and in light of the agreement of the participants, Canada and the
European Communities, the Appellate Body Report in this appeal would be circulated to WTO
Members no later than Monday, 12 March 2001.

12
9. The oral hearing in the appeal was held on 17 and 18 January 2001.
13 The participants and
the third participants presented oral arguments and responded to questions put to them by Members of
the Division hearing the appeal.

7WT/DS135/8, 23 October 2000.
8Pursuant to Rule 21(1) of the Working Procedures.
9Pursuant to Rule 23(1) of the Working Procedures.
10Pursuant to Rules 22 and 23(3) of the Working Procedures.
11Pursuant to Rule 24 of the Working Procedures.
12WT/DS135/10, 20 December 2000.
13Pursuant to Rule 27 of the Working Procedures.

II. Arguments of the Participants and the Third Participants
A. Claims of Error by Canada – Appellant
1. TBT Agreement
10. Canada requests that the Appellate Body reverse the Panel's findings and conclusions on the
definition of the term "technical regulation", hold that the Decree as a whole falls within the scope
of the TBT Agreement, and find that the Decree is inconsistent with paragraphs 1, 2, 4 and 8 of
Article 2 of the TBT Agreement.
11. Canada asserts that the Panel erred in law in failing to examine Canada's allegations under the
TBT Agreement. The Panel wrongly split the Decree into two and considered the prohibitions and
exceptions in the Decree to be separate measures for the purposes of determining whether the Decree
is a technical regulation within the meaning of the TBT Agreement. Canada believes that the Panel's
analysis is arbitrary, contrary to the internal co herence of the Decree, and allows the applicability of
the TBT Agreement to be determined by the way in which a Member drafts its legislation.
12. Canada argues that the Panel also erred in its interpretation of the definition of "technical
regulation" in Annex 1 to the TBT Agreement, in particular, in articulating two criteria that must be
satisfied before a measure can be a "technical regulation": (i) the measure must concern identifiable
products; and (ii) the measure must identify the technical characteristics that products must have to
be marketed in the territory of the Member taking the measure. This interpretation adds requirements
to the definition of "technical regulation" that have no basis in the text of the TBT Agreement, and
are inconsistent with the object and purpose of that Agreement, namely to restrain non-tariff barriers
to trade that may be disguised as technical regulations. In addition, with respect to the first criterion,
requiring a measure to relate to identifiable products to constitute a technical regulation could lead to
arbitrary results in practice. As for the second criterion, Canada alleges that it is too narrow and
would exclude from characterization as "technical regulations", and thereby insulate from the
disciplines of the TBT Agreement, measures regulating activities other than the marketing of
products, such as measures relating to transportation of products, disposal of hazardous waste, and use
of special equipment to repair certain products.
13. Canada challenges the Panel's conclusion that the TBT Agreement does not apply to a
general prohibition like the one in the Decree. The Panel relied on a false distinction between general
prohibitions, which it considered fall exclusively under the GATT 1994, and technical regulations,
which are subject to the disciplines of the TBT Agreement. In fact, a technical regulation can have
the effect on trade of a general prohibition.

14. Canada maintains that, had the Panel viewed the Decree as a unified measure, and correctly
interpreted the term "technical regulation", the Panel would have concluded that the Decree is a
technical regulation within the meaning of the TBT Agreement. However, even if the general
prohibition contained in the Decree were not characterized as a technical regulation, the Panel
nevertheless erred in failing to examine Canada's claims under the TBT Agreement, given that the
Panel also found that the TBT Agreement applies to the part of the Decree concerning exceptions,
and that Canada's claims related to the Decree as a whole. Canada therefore requests the Appellate
Body to reverse the Panel's conclusions on the applicability of the TBT Agreement to the Decree, and
to assess the compatibility of the Decree with that Agreement. Canada argues that, as in
United States – Import Prohibition of Certain Shrimp and Shrimp Products (" United States –
Shrimp"), "the facts on the record of the panel proceedings" allow the Appellate Body "to undertake
the completion of the analysis required to resolve this dispute."

14
15. Canada argues that the Decree is inconsistent with Article 2.1 of the TBT Agreement. Since
the principle of national treatment in Article 2.1 is a specific, particular expression of Article III:4 of
the GATT 1994, the interpretation of the words "like products" in Article 2.1 must be identical to the
interpretation of the same words in Article III:4. The meaning of "like products" in Article III:4 is
relevant context and, in the view of Canada, both Article III:4 of the GATT 1994 and Article 2.1 of
the TBT Agreement have the same object and purpose, namely to avoid protectionism and to provide
equality of competitive conditions for imported products in relation to domestic products. Thus,
Canada maintains, the findings of "likeness", and of less favourable treatment, made by the Panel
pursuant to Article III:4 of the GATT 1994 must be extended to Article 2.1 of the TBT Agreement.
16. In Canada's view, the Decree is inconsistent with Article 2.2 of the TBT Agreement. Canada
insists, first, that there is no rational connection between the Decree and France's objective of
protecting human health since: (i) it is friable materials containing amphiboles which pose a risk to
human health; (ii) the manipulation of chrysotile-cement products and other high-density products
containing chrysotile asbestos fibres does not pose a danger to human health; and (iii) the Decree
exposes the French public to substitute fibres, the health risks of which are still poorly understood.
Canada adds, second, that the Decree has effects that are more trade-restrictive than necessary to
achieve its objective, in particular, because: (i) the manipulation of chrysotile-cement products and
other high-density products containing chrysotile asbestos fibres does not create a risk to human
health; and (ii) there is a less trade-restrictive alternative that protects human health, namely the
"controlled use" of chrysotile-cement products an d other high-density products containing chrysotile
asbestos fibres. What must be demonstrated under Article 2.2 of the TBT Agreement is the same as

14Appellate Body Report, WT/DS58/AB/R, adopted 6 November 1998, para. 124.

what must be demonstrated under Article XX(b) of the GATT 1994. In this regard, according to
Canada, the reports of the panel and the Appellate Body in United States − Standards for
Reformulated and Conventional Gasoline ("United States – Gasoline ") establish that a less trade-
restrictive alternative can only be ruled out if it is shown to be impossible to implement.
15 However,
France did not demonstrate, and the Panel did not find, that it is impossible to implement "controlled
use". Furthermore, Canada contends, it would be less trade-restrictive to ban products containing
chrysotile asbestos fibres on the basis of a product-by-product demonstration of the ineffectiveness
and unfeasibility of "controlled use", rather than on the basis of the existence of substitute products.
17. Canada also argues that the Decree is inconsistent with Article 2.4 of the TBT Agreement,
because there are relevant international standards on the "controlled use" of chrysotile, which
constitute an effective and appropriate means to achieve France's objective of protecting human
health. In any event, the French government acted inconsistently with Article 2.4 because it did not
use international standards as a basis for the Decree. Lastly, Canada considers that the Decree is
inconsistent with Article 2.8 of the TBT Agreement because it institutes a prohibition based on the
descriptive characteristics of products, rather than on requirements in terms of performance.
2. Article XX(b) of the GATT 1994 and Article 11 of the DSU
18. Canada requests that the Appellate Body reverse the Panel's findings and conclusions under
Article XX(b) of the GATT 1994 and find that th e Decree is not justified under that provision.
Canada also asks the Appellate Body to find that the Panel did not make an "objective assessment of
the matter", as required under Article 11 of the DSU, because it failed to assess the scientific data in
accordance with the principle of the balance of probabilities, and failed to assess the facts objectively.
19. Canada argues that the Panel erred in finding that there is a risk to human health associated
with the manipulation of chrysotile-cement products. Canada identifies seven factors it claims the
Panel mistakenly relied on in reaching this conclusion: (i) a statement by Dr. Henderson that
"building workers now count among those most exposed to chrysotile fibres and hence to the risk of
mesothelioma"

16; (ii) an "anecdotal" statement by Dr. Henderson concerning "cases of
mesothelioma in patients who had been only incidentally exposed, without any relation to their
occupational activity"

17; (iii) the opinion of experts that it has not been established that there is a

15Panel Report, WT/DS2/R, adopted 20 May 1996, as modified by the Appellate Body Report,
WT/DS2/AB/R, DSR 1996:I, 29.
16Panel Report, para. 8.191.
17Ibid., para. 8.191 and footnote 147.

threshold below which exposure does not constitute a risk for mesothelioma or lung cancer; (iv) the
"Charleston study"
18; (v) "statistical data" adduced by Dr. Henderson, which, according to the Panel,
confirmed "the impact of chrysotile on mechanics exposed to that material in a car brake maintenance
context" despite a contrary study on automobile brake maintenance relied on by Canada

19; (vi) the
use of the no-threshold linear relationship model as a basis for concluding that there is a "real risk"
and "an undeniable public health risk" associated with exposure to chrysotile asbestos fibres at low or
intermittent levels

20; and (vii) data supplied by the European Communities concerning intermittent
manipulation and a reference by Dr. Henderson to a Japanese study as a basis for concluding that the
manipulation of chrysotile-cement using inappropriate tools could cause exposure levels above
statutory limits.

21 Canada sets forth detailed explanations as to why none of these factors supports the
Panel's conclusion.
20. Canada also contends that the Panel erred in its application of the test of "necessity" under
Article XX(b) of the GATT 1994. Canada accepts the Panel's view that the extent of the risk to
human health is relevant to the assessment of "necessity". However, Canada disputes that there is any
risk involved in the manipulation of such products, highlights that the evidence relied on by the Panel
certainly could not form the basis for a finding that the health risk was so high that it could justify
strict measures, and argues that the Panel failed to comply with its obligation to quantify this type of
risk. In Canada's view, these errors distorted the Panel's analysis of the test of necessity and led it to
take a much too restrictive approach to its consideration of reasonably available alternatives to the
Decree.
21. Canada asserts that, in its examination of whether less restrictive international trade
alternatives can achieve the level of protection inherent in the Decree, the Panel erred in accepting
that such level of protection is a halt to the spr ead of the risk associated with chrysotile asbestos
fibres. This premise does not take account of the risk associated with the use of substitute fibres, of
the absence in France of any regulatory framework for "controlled use" of such fibres, or of the false
sense of security created among the French public due to the absence of such a framework. The Panel
also erred in law in finding that there was no re asonably available alternative to the Decree that is
consistent or less inconsistent with the GATT 1994. In this regard, Canada makes the same
arguments that it made above with respect to Article 2.2 of the TBT Agreement, and emphasizes that
the Panel was overly strict in its examination of the alternatives, considering that France could have

18Panel Report, paras. 8.192 and 8.193.
19Ibid., para. 8.192 and footnote 154.
20Ibid., paras. 8.202 and 8.203.
21Ibid., para. 8.191.

adopted a measure establishing bans on specific products containing chrysotile asbestos fibres, based
on demonstrations of the ineffectiveness and unfeasibility of the "controlled use" of each product.
22. Canada submits that the Panel failed to discharge its responsibility to make an objective
assessment of the matter when it declined to take a position on the opinions expressed by the scientific
community. For Canada, the principle of the balance of probabilities, or the preponderance of
evidence, requires the trier of fact to take a positi on as to the respective weight of the evidence. Had
the Panel properly applied this principle, it would not have been able to conclude that the Decree was
justified under Article XX(b) of the GATT 1994, in view of the multiple studies submitted by Canada
showing, for example, that there is no increased risk among garage and brake mechanics, or among
construction workers, resulting from the manipulation of chrysotile asbestos. Canada adds that the
Panel also failed to make an objective assessment of the matter before it because, in its determinations
on the "controlled use" of chrysotile, it relied extensively on the opinions of the experts consulted,
who in fact did not possess expertise in the area of "controlled use".
B. Arguments of the European Communities – Appellee
1. TBT Agreement
23. The European Communities urges the Appellate Body to reject Canada's appeal on the
TBT Agreement. The Panel correctly concluded that the "prohibition part" of the Decree is not a
technical regulation within the meaning of Annex 1.1 to the TBT Agreement. Canada's arguments
with respect to the "exceptions part" of the Decree are legally irrelevant, since it would be impossible
for the Appellate Body to complete the legal anal ysis due to the lack of sufficient and undisputed
facts. The European Communities adds that the claims made by Canada under the TBT Agreement
should, in any event, be denied.
24. The European Communities sees no error in the Panel's separation of the prohibitions part of
the Decree from the exceptions part. The exceptions are ancillary to the prohibitions, and separating
the two parts for the purpose of their legal characterization under the TBT Agreement in no way
affects the internal coherence of the Decree. In this case, the issue before the Panel was whether the
prohibitions laid down in the Decree constitute a technical regulation, not whether, in the abstract, a
general ban may be a technical regulation. The European Communities also considers that the Panel
correctly interpreted the term "technical regulation", and that the interpretation suggested by Canada
would deprive other GATT 1994 provisions, such as Article XI, of effect.
25. The European Communities agrees with the Panel' s treatment of the exceptions part of the
Decree, and insists that, having made no specific violation claim regarding the narrowness of the

exceptions throughout these proceedings, Canada cannot now argue that the exceptions violate the
TBT Agreement. The European Communities argues that the Appellate Body is in any case prevented
from addressing Canada's claims under the TBT Agreement because to do so would require the
Appellate Body to make findings of a factual and technical nature which, in the absence of undisputed
facts and findings in the record, it cannot do on appeal. The Appellate Body could not simply use the
findings of the Panel under Articles III:4 and XX of the GATT 1994 as a basis for an analysis under
the TBT Agreement. While the two sets of rules are related, they are not "part of a logical
continuum"

22, and are not sufficiently closely related as to allow the Appellate Body to extrapolate
the findings of the Panel under Article III:4 and Article XX(b) of the GATT 1994 into the sphere of
the TBT Agreement. Should the Appellate Body examine Canada's claims under the TBT Agreement,
the European Communities argues that these claims should be dismissed and refers, in this regard, to
its arguments with respect to Article XX(b) of the GATT 1994, and to the arguments it made before
the Panel with regard to Articles 2.1, 2.2, 2.4 and 2.8 of the TBT Agreement.
2. Article XX(b) of the GATT 1994 and Article 11 of the DSU
26. The European Communities submits that the Panel' s finding that the violation of Article III:4
is justified under Article XX(b) of the GATT 1994 is legally sound and correct. Canada's arguments
on this issue amount to a request that the Appellate Body make new factual and scientific findings on
appeal, contrary to the limits on the scope of appellate review set out in Article 17.6 of the DSU.
27. The European Communities believes that the Panel concluded that the ban on asbestos was
"necessary" based on a series of objective and verifiable findings, made after a detailed and careful
evaluation of the factual and scientific evidence presented. In assessing whether the ban was
"necessary", the Panel was not obliged to undertake a "quantitative" assessment of the identified risk.
Neither the ordinary meaning of the terms "necessary to protect" in Article XX(b) nor the concept of
risk assessment mandate such an approach. An assessment of risk may be made either in quantitative
or qualitative terms. The European Communities adds that the Panel correctly found that, after the
European Communities had established a prima facie case for the existence of a health risk in
connection with the use of chrysotile, Canada bore the burden of refuting that case by showing the
absence of such a health risk.
28. On the issue of whether another measure was reasonably available, the European
Communities submits that Canada cannot, on appeal, make arguments based on the health risks
associated with the substitute products for asbestos, or on the safety of the "controlled use" of

asbestos, as both arguments seek to have the Appellate Body revisit factual findings made by the
Panel on the basis of the evidence submitted and the opinions advanced by the experts consulted.
29. With respect to the alleged inconsistency with Article 11 of the DSU, the European
Communities considers that Canada's claim that the Panel committed a fundamental error in its
appreciation of the facts seems to be based solely on the fact that the Panel based itself exclusively on
the opinions of the experts consulted in this case. In this regard, the European Communities
emphasizes that Canada did not object to the selection of the experts by the Panel, that Canada
proposed one of those experts itself, and that the experts themselves answered a question on
"controlled use" rather than professing a lack of expertise on the issue. As for Canada's argument that
the Panel erred in law in failing to evaluate the scientific evidence in accordance with the principle of
preponderance of the evidence, the Panel's approach does not seem inconsistent with such a principle
and, in any case, the principle of preponderance of the evidence is inapposite in the context of risk
assessment since such an approach would preclude Members from basing their regulatory decisions
on diverging scientific opinions. The European Communities refuses to accept that the evidence
relied on by the Panel – representing the unanimous views of the four experts consulted and of all
international institutions that have evaluated asbestos – reflects, as Canada seems to suggest, a
divergent, minority scientific point of view on asbestos.
C. Claims of Error by the European Communities – Appellant
1. "Like Products" in Article III:4 of the GATT 1994
30. The European Communities requests the Appellate Body to reverse the Panel's findings that
chrysotile asbestos fibres are "like" polyvinyl alcohol ("PVA"), cellulose and glass fibres, and that
chrysotile-cement products are "like" fibro-cement products, as well as the Panel's consequent finding
that, with respect to the products found to be "like", the Decree violates Article III:4 of the
GATT 1994.
31. The Panel's interpretation of the term "like products" in Article III:4, is of serious concern to
the European Communities; is contrary to the ordi nary meaning of Article III:4, read in context and
in light of its object and purpose; and is inconsistent with established case law. As the Appellate
Body has previously found, the first paragraph of Article III defines the object and purpose of the
whole of Article III, namely, to provide equality of competitive conditions for imported products in
relation to domestic products. In the view of the European Communities, the Panel, however,
erroneously analyzed the term "like products" in ligh t of the objective of ensuring market access for
products, and, in so doing, adopted an exclusively co mmercial approach to the comparison of "like"
products and erroneously expanded the scope of application of Article III:4.

32. The European Communities submits that this erroneous focus on market access led the Panel
to exclude from its "like" product analysis the very reason why the Decree singles out asbestos fibres,
namely, the fact that asbestos fibres are carcinogenic. While Article III:4 protects expectations
concerning the competitive relationship between imported and domestic products, the impact of a
measure on such expectations is not relevant in determining "likeness", but only later in the
Article III:4 analysis, for the purposes of establishing whether the measure discriminates between
imported and domestic products. For the European Communities, the decisive criterion for
determining the "likeness" of products must be whether the basis for the regulatory distinction
between products denies to imported products the treatment accorded to domestic products that are
the subject of the relevant measure.
33. The European Communities contends that, because the Panel ignored the basis for the
regulatory treatment set forth in the Decree, it compared the wrong products in its analysis of
"likeness". The Decree prohibits all carcinogenic asbestos fibres , and it denies competitive
opportunities to all such fibres equally. Thus, the prohibited carcinogenic asbestos fibres are not
"like" the three substitute fibres because the application of the French regulatory distinction between
them does not alter or affect the competitive opportunities of those substitute fibres. The European
Communities concludes that, instead of comparing the products claimed by Canada to be "like"
products (PVA, cellulose and glass fibres) with the category of products prohibited by the French
Decree at issue (all carcinogenic asbestos fibres), the Panel erroneously compared the allegedly "like"
products with an arbitrary third category of products, namely "fibres with certain industrial
applications".

23
34. The European Communities challenges the Panel's conclusion that, in view of the relationship
between Articles III and XX(b) of the GATT 1994, it is not appropriate to take the "risk" criterion into
account either when examining the properties, nature and quality of the product, or when examining
other criteria of "likeness".

24 The Panel found that the health, safety or other concerns that lead
regulators to apply different treatment to products may only be taken into account in the analysis
under Article XX, not in the analysis under Article III:4 of the GATT 1994. The Panel's approach
misconstrues the relationship between Articles III:4 and XX of the GATT 1994, requires the
"likeness" of two products to be determined solely on the basis of commercial factors and, in the view
of the European Communities, entails a serious curtailment of national regulatory autonomy. If non-
commercial considerations may only be considered at the Article XX stage of the analysis, then the
list of policy purposes for which regulators may distinguish between products is unduly limited to the

23European Communities' other appellant's submission, para. 29.
24Panel Report, para. 8.132.

categories listed in Article XX. The application of a "risk" criterion in the analysis of "likeness"
under Article III would not, as the Panel suggests, make the other criteria of "likeness" "totally
redundant"

25, since all relevant criteria, including the "risk" criterion, must be considered in the
assessment of "likeness".
35. The European Communities contends that th e Panel committed a number of errors in its
application of the four criteria used to assess "likeness", and placed excessive importance on the
criterion of end-use. The Panel failed to follow th e approach used in previous case law, and ignored
the fact that Article III:4 of the GATT 1994, unlike Article III:2 and its accompanying Interpretive
Note, does not contain the phrase "directly competitive or substitutable" products. The Panel's
analysis of "end-use" is inadequately reasoned, in particular since the Panel failed to identify the small
number of identical or similar end-uses for chrysotile asbestos, PVA, cellulose and glass fibres and
ignored that, overall, the end-uses for asbestos and its substitutes are very different. The European
Communities adds that the Panel relied on its conclusions on end-use in its analysis of the properties,
nature and quality of the products, as well as their tariff classification, and, in effect disregarded these
other criteria.
2. Article XXIII:1(b) of the GATT 1994
36. The European Communities appeals the Panel's findings on Article XXIII:1(b) of the
GATT 1994 in paragraphs 8.262, 8.264, 8.273 and 8.274 of the Panel Report, but not the Panel's
conclusion that Canada did not establish nullification or impairment of a benefit within the meaning
of Article XXIII:1(b). The Panel's reasoning is inconsistent with the proper interpretation of the
GATT 1994, past practice, and relevant case law. Historically, the non-violation remedy was
conceived as a legal instrument designed to prevent the circumvention of tariff concessions. Only
three non-violation complaints have succeeded. All previous non-violation complaints have related to
measures imposed for commercial purposes, and all such complaints would today most likely be
resolved as violation complaints under the expanded WTO competence, reflected in the covered
agreements. The European Communities urges the Appellate Body to accept that the concept of non-
violation nullification and impairment is an exceptional one, as WTO Members have recognized, and
should be applied with utmost circumspection.
37. The European Communities challenges, in particular, the Panel's conclusion that
"Article XXIII:1(b) applies to a measure whether it is consistent with the GATT because the GATT
does not apply to it or is justified by Article XX."

26 In so finding, the Panel wrongly implied that

25Panel Report, para. 8.131.
26Ibid., para. 8.264.

Article XXIII:1(b) of the GATT 1994 protects the expectation that, once a tariff concession has been
made for a product, the regulatory framework applicable to that product will not be adapted in
response to new scientific knowledge concerning health risks. In the view of the European
Communities, the Panel's interpretation wrongly expanded the coverage of Article XX III:1(b) in a
manner that has grave systemic implications.
38. The European Communities urges the Appellate Body to reject, as a matter of legal principle,
the possibility of finding nullification or impairment under Article XXIII:1(b) with respect to health
and safety regulations, or with respect to measures that fall under any of the other grounds listed in
Article XX, or under provisions such as Articles XIX and XXI of the GATT 1994. Article XXIII:1(b)
cannot apply in cases involving health measures, since the legitimacy of an exporting Member's
expectation that the health measure will not be taken cannot be assessed without examining the health
measure itself and the balance of interests underlying that law. The participants in the Uruguay
Round knew that the value of the concessions negotiated in that Round could be adversely affected by
measures taken to protect, inter alia, human, animal or plant life or health, or a national security
interest. Therefore, the European Communities concludes, if a Member takes a measure that is
consistent with the GATT 1994, it does not disturb the balance of rights and obligations under the
GATT 1994, and no redress is available under Article XXIII:1(b).
D. Arguments of Canada – Appellee
1. "Like Products" in Article III:4 of the GATT 1994
39. Canada requests the Appellate Body to dismiss the European Communities' appeal relating to
Article III:4 of the GATT 1994. Canada is of the view that the Panel correctly separated the analysis
of "likeness" from the issue of whether the competitive opportunities afforded to imports on the
domestic market have been upset. In its appeal, the European Communities confounds these two
distinct questions and attaches undue significance to the Panel's statement regarding the importance of
"market access" under Article III:4 of the GATT 1994.
40. Canada considers that the Panel properly applied the criteria set out in the case law for
determining whether products are "like". The European Communities appears to confuse the concept
of "likeness" under Article III:4 of the GATT 1994 with "likeness" under Article III:2. "Likeness",
however, under Article III:4 is different from, and broader than, "likeness" under the first sentence of
Article III:2, and the Panel's approach properly reflects this distinction. In assessing the "likeness" of
the fibres, the Panel recognized that the criteria of "properties" and "end-use" are interdependent, and
analyzed them accordingly. Canada does not accept that the Panel created a hierarchy among the
traditional "likeness" criteria, but, even so, this would not be an error of law, since "likeness" must be

approached on a case-by-case basis, and it is within a panel's discretion to establish a hierarchy among
the criteria in any given case. Finally, Canada notes, the appeal of the European Communities focuses
on the Panel's conclusion that chrysotile asbestos fibres are "like" PVA, cellulose and glass fibres, and
the criticisms that the European Communities makes of this conclusion cannot be extended to the
Panel's separate conclusion that chrysotile-cement products are "like" fibro-cement products.
41. Canada submits that the Panel correctly decided that the "dangerousness" of a product is not a
factor to be considered in determining "likeness" a nd that to introduce a criterion of this nature into
the analysis of "likeness" would nullify the effect of Article XX(b) of the GATT 1994. The object
and purpose of Article III of the GATT 1994 is to provide equality of competitive conditions for
imported and domestic products, and the four traditional criteria of "likeness" all relate to the state of
commercial competition between such products. The "dangerousness" of products is unrelated to
such commercial competition. Furthermore, to intr oduce such factors into the analysis of "likeness"
under Article III:4 would lead to unpredictability as to the scope of that provision, and imply that
determining the "likeness" of products requires complex scientific analysis for which panels have no
special expertise. Canada adds that even if the "dangerousness" of a product were relevant to the
determination of "likeness", it would not necessarily follow that chrysotile asbestos fibres are not
"like" the substitute fibres. Since Article XX of the GATT 1994 was specially designed to balance the
interest of promoting international trade with leg itimate societal interests, it is a more appropriate
framework than Article III for taking account of these types of considerations. Canada also stresses
that, contrary to the argument of the European Communities, such an approach does not lead to a
curtailment of national regulatory autonomy, becau se the list in Article XX covers a broad range of
interests on the basis of which a Member may justify a measure.
42. Canada also submits that, in its appeal, the European Communities errs in asserting that the
examination of "likeness" must be done on the basis of the regulatory distinction in question, and in
claiming that the Panel should only have compared chrysotile asbestos fibres with carcinogenic fibres,
rather than with other fibres that serve similar indu strial uses. Such an approach is inconsistent with
the proper interpretation of Article III:4. In seeking to focus the analysis on the reason for any given
regulatory distinction, the European Communities would allow national regulatory authorities to
predetermine the scope of Article III:4 through the distinctions they choose to make. Such an
approach is also inconsistent with the object and purpose of Article III:4, which aims to discipline
measures that have trade-restrictive effects, even when those measures are not aimed at restricting
trade. Finally, in Canada's view, the Panel correctly compared chrysotile asbestos fibres with the
fibres with which they compete in certain industrial applications, since such a comparison is
consistent with the aim of providing equality of competitive conditions, and since the Decree itself
makes no reference to carcinogenic fibres.

2. Article XXIII:1(b) of the GATT 1994
43. Canada requests the Appellate Body to reject the European Communities' appeal with respect
to Article XXIII:1(b) of the GATT 1994. Canada suggests, first, that the Appellate Body should
apply the principle of judicial economy and refrain from ruling on these grounds of appeal. Canada
argues that a ruling by the Appellate Body in respect of Article XXIII:1(b) of the GATT 1994 would
not further the objective of dispute settlement, as set forth in Article 3.7 of the DSU, namely to secure
a positive solution to a dispute. There is no dispute concerning Article XXIII:1(b) because neither
party has appealed the Panel's conclusions on this issue. Canada also refers to Article 3.2 of the DSU
and cautions the Appellate Body against "mak ing law" by clarifying provisions of the
WTO Agreement outside the context of resolving a particular dispute.

27
44. Should the Appellate Body address the interpretation of Article XXIII:1(b) of the
GATT 1994, Canada invites it to affirm the Panel's reasoning, in particular the Panel's recognition that
there may be particularly exceptional cases in which a measure justified under Article XX(b) would
nonetheless nullify or impair benefits within the meaning of Article XXIII:1(b). Article XX(b)
and XXIII:1(b) may be applied simultaneously, since Article 26.1 of the DSU does not require the
withdrawal of a measure that nullifies or impairs benefits within the meaning of Article XXIII:1(b).
As regards the concept of legitimate expectations, Canada rejects as artificial, and without any textual
basis, the distinction that the European Communities seeks to draw between pure trade measures and
measures linked to the protection of health.
E. Arguments of the Third Participants
1. Brazil
(a) TBT Agreement
45. Brazil believes that the Panel erred in its findings regarding the scope of the TBT Agreement.
Brazil argues that the Panel erred in dividing the Decree into two separate parts in determining
whether the TBT Agreement applies to the Decree. This division was arbitrary and inconsistent with
the logic and objectives of the Decree, which deals with the same products in both the prohibition and
the exception parts. Furthermore, Brazil is particularly concerned by the findings of the Panel in
paragraphs 8.38, 8.39, 8.43, 8.49, 8.57, 8.60, 8.61 and 8.71 of the Panel Report, and by the serious
systemic implications of the finding that a general prohibition does not constitute a technical
regulation within the meaning of Annex 1.1 of the TBT Agreement. Contrary to the Panel's

27Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and
Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, DSR 1997:I, 323, at 340.

interpretation, nothing in the TBT Agreement specifies that a product must be "identifiable", or that a
measure must relate to one, or more than one product, in order to be a technical regulation. Such a
narrow interpretation unduly excludes from the scope of the TBT Agreement a wide range of
measures affecting products that could potentially represent barriers to trade. Brazil also contests the
Panel's finding that a technical regulation must include specifications to be met in order for a product
to be authorized for marketing. Brazil adds that, in its view, both France and the European
Communities conceded, when they notified the Decree under the TBT Agreement, that the measure is
a technical regulation.
2. United States
(a) TBT Agreement
46. The United States argues that the Panel erred in its interpretation of the phrase "technical
regulation" in Annex 1 to the TBT Agreement, and, in consequence, improperly excluded from the
scope of the TBT Agreement technical regulations that apply generally to products. Specifically, the
United States contends that the Panel erred in finding that the phrase "product characteristics" in the
definition of "technical regulation" refers to characteristics of "one or more given products", rather
than characteristics of products generally.
47. Should the Appellate Body find that the TBT Agreement applies to the Decree and decide to
complete the analysis of Canada's claims under that Agreement, the United States submits that the
Appellate Body should find that the Decree is consistent with the TBT Agreement. Asbestos and
asbestos-containing products, on the one hand, and substitute fibres and asbestos-free products, on the
other, are not "like products" within the meaning of Article 2.1 of the TBT Agreement for the same
reasons that they are not "like products" for the purposes of Article III:4 of the GATT 1994. The test
to be applied under Article 2.2 of the TBT Agreement is very similar to the test to be applied under
Article XX(b) and the introductory clause to Article XX. However, unlike Article XX of the
GATT 1994, where the burden was on the European Communities to present a prima facie case that
the Decree was justified, under Article 2.2 of the TBT Agreement, it is for Canada to make a
prima facie case that the Decree creates an unnecessary barrier to trade, and it has not done so. The
Decree is also consistent with Article 2.4 of the TBT Agreement, since the international standards
identified by Canada are neither relevant to, nor an effective or appropriate means of achieving,
France's public health objective. Lastly, the United States argues that the Decree is consistent with
Article 2.8 of the TBT Agreement, since it would be inappropriate to express the technical regulation
in any way other than as a prohibition on the use of asbestos.

(b) "Like Products" in Article III:4 of the GATT 1994
48. The United States submits that the Panel erred in concluding that asbestos fibres and
substitute fibres are "like products" under Article III:4 of the GATT 1994. The Panel erred in law in
concluding that, in examining the properties, nature and quality of asbestos, it could not take into
account the fact that asbestos differs from other fibres because it splits longitudinally into narrow, or
thin, fibres, and has a high potential to release particles that possess certain characteristics, and in
concluding that, in examining consumer tastes and habits, it could not take account of the proven
carcinogenic nature of asbestos. In so proceeding, the Panel ignored the single most important
distinguishing feature between asbestos and its substitutes. The Panel also wrongly inflated the
significance of another factor – the end uses of products concerned. In the view of the United States,
the application of a proper "like product" analysis should lead the Appellate Body to find that asbestos
is not "like" its substitute fibres, and that asbestos-containing products are not "like" asbestos-free
products and, therefore, conclude that the Decree does not violate Article III:4 of the GATT 1994.
(c) Article XX(b) of the GATT 1994 and Article 11 of the DSU
49. Should the Appellate Body resort to Article XX(b) of the GATT 1994, the United States
urges the Appellate Body to find that the Decree is permissible under Article XX(b). Canada's appeal
on this issue is based on criticism of the Panel's findings with respect to the scientific information
before it, and that Canada erroneously asserts that Article 11 of the DSU requires the Panel to decide
which scientific view is the correct one. However, the role of a panel, under Article 11 of the DSU, is
to make an objective assessment of the facts before it, and to evaluate whether there is a rational or
objective relationship between the measure at issue and the scientific basis asserted for the measure.
The United States argues that the Panel acted consistently with this mandate in finding that the Decree
is necessary to protect human health, and the Appellate Body should not disturb this finding.
III. Preliminary Procedural Matter
50. On 27 October 2000, we wrote to the parties and the third parties indicating that we were
mindful that, in the proceedings before the Panel in this case, the Panel received five written
submissions from non-governmental organizations, two of which the Panel decided to take into
account.

28 In our letter, we recognized the possibility that we might receive submissions in this
appeal from persons other than the parties and the third parties to this dispute, and stated that we were
of the view that the fair and orderly conduct of this appeal could be facilitated by the adoption of
appropriate procedures, for the purposes of this appeal only, pursuant to Rule 16(1) of the

28Panel Report, paras. 6.1-6.4 and 8.12-8.14.

Working Procedures, to deal with any possible submissions received from such persons. To this end,
we invited the parties and the third parties in this appeal to submit their comments on a number of
questions. These related to: whether we should adopt a "request for leave" procedure; what
procedures would be needed to ensure that the parties and third parties would have a full and adequate
opportunity to respond to submissions that might be received; and whether we should take any
other points into consideration if we decided to adopt a "request for leave" procedure. On
3 November 2000, all of the parties and third parties responded in writing to our letter of 27 October.
Canada, the European Communities and Brazil considered that issues pertaining to any such
procedure should be dealt with by the WTO Members themselves. The United States welcomed
adoption of a request for leave procedure, and Zimbabwe indicated that it had no specific reasons to
oppose adoption of a request for leave procedure. Without prejudice to their positions, Canada, the
European Communities and the United States each made a number of suggestions regarding any such
procedure that might be adopted.
51. On 7 November 2000, and after consultations among all seven Members of the Appellate
Body, we adopted, pursuant to Rule 16(1) of the Working Procedures , an additional procedure,
for the purposes of this appeal only , to deal with written submissions received from persons other
than the parties and third parties to this disput e (the "Additional Procedure"). The Additional
Procedure was communicated to the parties and third parties in this appeal on 7 November 2000. On
8 November 2000, the Chairman of the Appellate Body informed the Chairman of the Dispute
Settlement Body, in writing, of the Additional Procedure adopted, and this letter was circulated, for
information, as a dispute settlement document to the Members of the WTO.

29 In that communication,
the Chairman of the Appellate Body stated that:
… This additional procedure has been adopted by the Division hearing
this appeal for the purposes of this appeal only pursuant to Rule 16(1)
of the Working Procedures for Appellate Review , and is not a new
working procedure drawn up by the Appellate Body pursuant to
paragraph 9 of Article 17 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes. (original emphasis)
The Additional Procedure was posted on the WTO website on 8 November 2000.
52. The Additional Procedure provided:

29WT/DS135/9, 8 November 2000.

1. In the interests of fairness and orderly procedure in the
conduct of this appeal, the Division hearing this appeal has decided to
adopt, pursuant to Rule 16(1) of the Working Procedures for
Appellate Review , and after consultations with the parties and third
parties to this dispute, the following additional procedure for purposes
of this appeal only.
2. Any person, whether natural or legal, other than a party or a
third party to this dispute, wishing to file a written brief with the
Appellate Body, must apply for leave to file such a brief from the
Appellate Body by noon on Thursday, 16 November 2000.
3. An application for leave to file such a written brief shall:
(a) be made in writing, be dated and signed by the
applicant, and include the address and other contact
details of the applicant;
(b) be in no case longer than three typed pages;
(c) contain a description of the applicant, including a
statement of the membership and legal status of the
applicant, the general objectives pursued by the
applicant, the nature of the activities of the applicant,
and the sources of financing of the applicant;
(d) specify the nature of the interest the applicant has in
this appeal;
(e) identify the specific issues of law covered in the
Panel Report and legal interpretations developed by
the Panel that are the subject of this appeal, as set
forth in the Notice of Appeal (WT/DS135/8) dated
23 October 2000, which the applicant intends to
address in its written brief;
(f) state why it would be desirable, in the interests of
achieving a satisfactory settlement of the matter at
issue, in accordance with the rights and obligations of
WTO Members under the DSU and the other covered
agreements, for the Appellate Body to grant the
applicant leave to file a written brief in this appeal;
and indicate, in particular, in what way the applicant
will make a contribution to the resolution of this
dispute that is not likely to be repetitive of what has
been already submitted by a party or third party to
this dispute; and
(g) contain a statement disclosing whether the applicant
has any relationship, direct or indirect, with any party
or any third party to this dispute, as well as whether it
has, or will, receive any assistance, financial or
otherwise, from a party or a third party to this dispute
in the preparation of its application for leave or its
written brief.

4. The Appellate Body will review and consider each application
for leave to file a written brief and will, without delay, render a
decision whether to grant or deny such leave.
5. The grant of leave to file a brief by the Appellate Body does
not imply that the Appellate Body will address, in its Report, the legal
arguments made in such a brief.
6. Any person, other than a party or a third party to this dispute,
granted leave to file a written brief with the Appellate Body, must file
its brief with the Appellate Body Secretariat by noon on Monday,
27 November 2000.
7. A written brief filed with the Appellate Body by an applicant
granted leave to file such a brief shall:
(a) be dated and signed by the person filing the brief;
(b) be concise and in no case longer than 20 typed pages,
including any appendices; and
(c) set out a precise statement, strictly limited to legal
arguments, supporting the applicant's legal position
on the issues of law or legal interpretations in the
Panel Report with respect to which the applicant has
been granted leave to file a written brief.
8. An applicant granted leave shall, in addition to filing its
written brief with the Appellate Body Secretariat, also serve a copy of
its brief on all the parties and third parties to the dispute by noon on
Monday, 27 November 2000.
9. The parties and the third parties to this dispute will be given a
full and adequate opportunity by the Appellate Body to comment on
and respond to any written brief filed with the Appellate Body by an
applicant granted leave under this procedure. (original emphasis)
53. The Appellate Body received 13 written submissions from non-governmental organizations
relating to this appeal that were not submitted in accordance with the Additional Procedure.

30 Several
of these were received while we were considering the possible adoption of an additional procedure.
After the adoption of the Additional Procedure, each of these 13 submissions was returned to its
sender, along with a letter informing the sender of the procedure adopted by the Division hearing this

30Such submissions were received from: Asbestos Information Association (United States);
HVL Asbestos (Swaziland) Limited (Bulembu Mine); South African Asbestos Producers Advisory Committee
(South Africa); J & S Bridle Associates (United Kingdom ); Associação das Indústrias de Produtos de Amianio
Crisótilo (Portugal); Asbestos Cement Industries Lim ited (Sri Lanka); The Federation of Thai Industries,
Roofing and Accessories Club (Thailand); Korea Asbestos Association (Korea); Senac (Senegal); Syndicat
des Métallos (Canada); Duralita de Centroamerica, S.A. de C.V. (El Salvador); Asociación Colombiana de
Fibras (Colombia); and Japan Asbestos Association (Japan).

appeal and a copy of the Additional Procedure. Only one of these associations, the Korea Asbestos
Association, subsequently submitted a request for leave in accordance with the Additional Procedure.
54. By letter dated 15 November 2000, Canada and the European Communities jointly requested
that they be provided with copies of all applications filed pursuant to the Additional Procedure, and of
the decision taken by the Appellate Body in respect of each such application. All such documents
were subsequently provided to the parties and third parties in this dispute.
55. Pursuant to the Additional Procedure, the Appellate Body received 17 applications requesting
leave to file a written brief in this appeal. Six of these 17 applications were received after the
deadline specified in paragraph 2 of the Additional Procedure and, for this reason, leave to file a
written brief was denied to these six applicants.

31 Each such applicant was sent a copy of our
decision denying its application for leave because the application was not filed in a timely manner.
56. The Appellate Body received 11 applications for leave to file a written brief in this appeal
within the time limits specified in paragraph 2 of the Additional Procedure.
32 We carefully reviewed
and considered each of these applications in accordance with the Additional Procedure and, in each
case, decided to deny leave to file a written brief. Each applicant was sent a copy of our decision
denying its application for leave for failure to comply sufficiently with all the requirements set forth
in paragraph 3 of the Additional Procedure.
57. We received a written brief from the Foundation for International Environmental Law and
Development, on its behalf and on behalf of Ba n Asbestos (International and Virtual) Network,
Greenpeace International, International Ban Asbestos Secretariat, and World Wide Fund for Nature,
International, dated 6 February 2001. As we had already denied, in accordance with the Additional

31Applications from the following persons were received by the Division after the deadline specified in
the Additional Procedure for receipt of such applications: Association of Personal Injury Lawyers (United
Kingdom); All India A.C. Pressure Pipe Manufacturer's Association (India); International Confederation of
Free Trade Unions/European Trade Union Confederatio n (Belgium); Maharashtra Asbestos Cement Pipe
Manufacturers' Association (India); Roofit Industri es Ltd. (India); and Society for Occupational and
Environmental Health (United States).
32Applications from the following persons were received by the Division within the deadline specified
in the Additional Procedure for receipt of such applications: Professor Robert Lloyd Howse (United States);
Occupational & Environmental Diseases Association (United Kingdom); American Public Health Association
(United States); Centro de Estudios Comunitarios de la Universidad Nacional de Rosario (Argentina); Only
Nature Endures (India); Korea Asbestos Association (Korea); International Council on Metals and the
Environment and American Chemistry Council (United States); European Chemical Industry Council
(Belgium); Australian Centre for Environmental Law at the Australian National University (Australia);
Associate Professor Jan McDonald and Mr. Don Anton (Australia); and a joint application from Foundation for
Environmental Law and Development (United Kingdom), Center for International Environmental Law
(Switzerland), International Ban Asbestos Secretariat (United Kingdom), Ban Asbestos International and Virtual
Network (France), Greenpeace International (The Netherlands), World Wide Fund for Nature, International
(Switzerland), and Lutheran World Federation (Switzerland).

Procedure, an application from these organizations for leave to file a written brief in this appeal
33, we
did not accept this brief.
IV. Issues Raised in this Appeal
58. This appeal raises the following issues:
(a) whether the Panel erred in its interpretation of the term "technical regulation" in
Annex 1.1 of the TBT Agreement in finding, in paragraph 8.72(a) of the Panel
Report, that "the part of the Decree relating to the ban on imports of asbestos and
asbestos-containing products" does not constitute a "technical regulation";
(b) whether the Panel erred in its interpretation and application of the term "like
products" in Article III:4 of the GATT 1994 in finding, in paragraph 8.144 of the
Panel Report, that chrysotile asbestos fibres are "like" PVA, cellulose and glass fibres,
and in finding, in paragraph 8.150 of the Panel Report, that cement-based products
containing chrysotile asbestos fibres are "like" cement-based products containing
polyvinyl alcohol, cellulose and glass fibres;
(c) whether the Panel erred in finding that the measure at issue is "necessary to protect
human … life or health" under Article XX(b) of the GATT 1994, and whether, in
carrying out its examination under Article XX(b) of the GATT 1994, the Panel failed
to make an objective assessment of the matter under Article 11 of the DSU; and
(d) whether the Panel erred in its interpretation of Article XXIII:1(b) of the GATT 1994
in finding that that provision applies to a measure which falls within the scope of
application of other provisions of the GATT 1994, and in finding that
Article XXIII:1(b) applies to measures which pursue health objectives.
V. TBT Agreement
59. Before the Panel, Canada claimed that the measure at issue is inconsistent with Articles 2.1,
2.2, 2.4 and 2.8 of the TBT Agreement. Each of these provisions applies solely to "technical
regulations". Thus, a threshold issue in the examination of Canada's claims under the TBT Agreement
is whether the measure at issue is a "technical regulation".

33These organizations, together with the Center for International Environmental Law and the Lutheran
World Federation, filed a joint application for leave to file a written brief. We decided to deny leave to these
applicants to file a written brief. See supra, para. 56 and footnote 32.

60. In addressing this threshold issue, the Panel examined the nature and structure of the measure
to assess how the TBT Agreement might apply to it. For this examination, the Panel decided that it
would be appropriate to examine the measure in two stages. First, the Panel examined "the part of the
Decree prohibiting the marketing of asbestos and asbestos-containing products"; next, the Panel
analyzed the "exceptions" in the Decree.

34 The Panel concluded that the part of the Decree containing
the prohibitions is not a "technical regulation", and that, therefore, the TBT Agreement does not
apply to this part of the Decree.
35 However, the Panel also concluded that the part of the Decree
containing the exceptions does constitute a "technical regulation", and that, therefore, the
TBT Agreement applies to that part of the Decree. On this basis, the Panel decided not to examine
Canada's claims under the TBT Agreement because, it said, those claims relate solely to the part of
the Decree containing the prohibitions, which, in the Panel's view, does not constitute a "technical
regulation", and, therefore, the TBT Agreement does not apply.

36
61. In concluding that the part of the Decree containing the prohibitions is not a "technical
regulation", the Panel found that:
a measure constitutes a "technical regulation" if:
(a) the measure affects one or more given products;
(b) the measure specifies the technical characteristics of the
product(s) which allow them to be marketed in the Member
that took the measure;
(c) compliance is mandatory.

37
62. Canada appeals the Panel's finding that the TBT Agreement does not apply to the part of the
Decree relating to the prohibitions on imports of asbestos and asbestos-containing products.
According to Canada, the Panel erred in consider ing the part of the Decree relating to those
prohibitions separately from the part of the Decree relating to the exceptions to those prohibitions,
and, therefore, the Panel should have examined the Decree as a single, unified measure.
Furthermore, Canada argues that the Panel erred in its interpretation of a "technical regulation", as
defined in Annex 1.1 to the TBT Agreement, because, in Canada's view, a general prohibition can be
a "technical regulation".

34Panel Report, heading (a) on p. 404 and heading (b) on p. 411.
35Ibid., para. 8.72(a).
36Ibid., para. 8.72.
37Ibid., para. 8.57.

63. We start with the measure at issue. It is clear from Canada's request for the establishment of a
panel that Canada's complaint concerns Decree 96-1133 as a whole.
38 The Decree, in essence,
consists of prohibitions on asbestos fibres and on products containing asbestos fibres (Article 1),
coupled with limited and temporary exceptions from the prohibitions for certain "existing materials,
products or devices containing chrysotile fibre" (Article 2). The remaining operative provisions of the
Decree contain additional rules governing the grant of an exception (Articles 3 and 4) and the
imposition of penalties for violation of the prohibitions in Article 1 (Article 5). Furthermore, certain
used "vehicles" and "agricultural and fore stry machinery" are entirely excluded, until
31 December 2001, from certain aspects of the prohibitions in Article 1, namely, from the
prohibitions on "possession for sale, offering for sale and transfer under any title" (Article 7).

39
64. In our view, the proper legal character of the measure at issue cannot be determined unless the
measure is examined as a whole. Article 1 of the Decree contains broad, general prohibitions on
asbestos and products containing asbestos. However, the scope and generality of those prohibitions
can only be understood in light of the exceptions to it which, albeit for a limited period, permit,
inter alia, the use of certain products containing asbestos and, principally, products containing
chrysotile asbestos fibres. The measure is, therefore, not a total prohibition on asbestos fibres,
because it also includes provisions that permit, for a limited duration, the use of asbestos in certain
situations. Thus, to characterize the measure simply as a general prohibition, and to examine it as
such, overlooks the complexities of the measure, which include both prohibitive and permissive
elements. In addition, we observe that the exceptions in the measure would have no autonomous legal
significance in the absence of the prohibitions. We, therefore, conclude that the measure at issue is to
be examined as an integrated whole, taking into account, as appropriate, the prohibitive and the
permissive elements that are part of it.
65. Accordingly, we reverse the Panel's two-stage in terpretive approach of examining, first, the
application of the TBT Agreement to the prohibitions contained in the measure and, second and
separately, its application to the exceptions contained in the measure.

38WT/DS135/3. In its request for the establishment of a panel, Canada stated:
… the Government of Canada requested consultations with the European
Communities concerning certain measures taken by France prohibiting
asbestos and products containing asbestos, and concerning the general
asbestos regulations in force in France. These measures and regulations
include, but are not limited to, Decree No. 96-1133 … (emphasis added)
Canada requested that the Panel "find that Decree No. 96-1133 " is inconsistent with the European
Communities' WTO obligations. (emphasis added) See, further, Canada's request for consultations,
WT/DS135/1, G/SPS/GEN/72, G/TBT/D/15, which also identifies the measure at issue as Decree No. 96-1133.
39The full text of the Decree is reproduced in Annex I in the Addendum to the Panel Report. Articles 1
and 2 of the Decree are reproduced in paragraph 2 of this Report.

66. We turn now to the term "technical regulation" and to the considerations that must go into
interpreting the term. Article 1.2 of the TBT Agreement provides that, for the purposes of this
Agreement, the meanings given in Annex 1 apply. Annex 1.1 of the TBT Agreement defines a
"technical regulation" as a:
Document which lays down product characteristics or their related
processes and production methods, including the applicable
administrative provisions, with which compliance is mandatory . It
may also include or deal exclusively with terminology, symbols,
packaging, marking or labelling requirements as they apply to a
product, process or production method. (emphasis added)
67. The heart of the definition of a "technical regulation" is that a "document" must "lay down" –
that is, set forth, stipulate or provide – "product characteristics". The word "characteristic" has a
number of synonyms that are helpful in understanding the ordinary meaning of that word, in this
context. Thus, the "characteristics" of a product include, in our view, any objectively definable
"features", "qualities", "attributes", or other "distinguishing mark" of a product. Such "characteristics"
might relate, inter alia , to a product's composition, size, shape, colour, texture, hardness, tensile
strength, flammability, conductivity, density, or viscosity. In the definition of a "technical regulation"
in Annex 1.1, the TBT Agreement itself gives certain examples of "product characteristics" –
"terminology, symbols, packaging, marking or labelling requirements". These examples indicate that
"product characteristics" include, not only features and qualities intrinsic to the product itself, but also
related "characteristics", such as the means of identification, the presentation and the appearance of a
product. In addition, according to the definition in Annex 1.1 of the TBT Agreement, a "technical
regulation" may set forth the "applicable administrative provisions" for products which have certain
"characteristics". Further, we note that the definition of a "technical regulation" provides that such a
regulation "may also include or deal exclusively with terminology, symbols, packaging, marking or
labelling requirements". (emphasis added) The use here of the word "exclusively" and the disjunctive
word "or" indicates that a "technical regulation" may be confined to laying down only one or a few
"product characteristics".
68. The definition of a "technical regulation" in Annex 1.1 of the TBT Agreement also states that
"compliance
 " with the "product characteristics" laid down in the "document" must be " mandatory ".
A "technical regulation" must, in other words, regulate the "characteristics" of products in a binding
or compulsory fashion. It follows that, with respect to products, a "technical regulation" has the effect
of prescribing or imposing one or more "characteristics" – "features", "qualities", "attributes", or
other "distinguishing mark".

69. "Product characteristics" may, in our view, be prescribed or imposed with respect to products
in either a positive or a negative form. That is, the document may provide, positively, that products
must possess certain "characteristics", or the document may require, negatively, that products must
not possess certain "characteristics". In both cases, the legal result is the same: the document "lays
down" certain binding "characteristics" for products, in one case affirmatively, and in the other by
negative implication.
70. A "technical regulation" must, of course, be applicable to an identifiable product, or group of
products. Otherwise, enforcement of the regulation will, in practical terms, be impossible. This
consideration also underlies the formal obligation, in Article 2.9.2 of the TBT Agreement, for
Members to notify other Members, through the WTO Secretariat, "of the products to be covered
 " by
a proposed "technical regulation". (emphasis added) Clearly, compliance with this obligation requires
identification of the product coverage of a technical regulation. However, in contrast to what the
Panel suggested, this does not mean that a "technical regulation" must apply to " given" products
which are actually named, identified or specified in the regulation.

40 (emphasis added) Although
the TBT Agreement clearly applies to "products" generally, nothing in the text of that Agreement
suggests that those products need be named or otherwise expressly identified in a "technical
regulation". Moreover, there may be perfectly sound administrative reasons for formulating a
"technical regulation" in a way that does not expressly identify products by name, but simply makes
them identifiable – for instance, through the "characteristic" that is the subject of regulation.
71. With these considerations in mind, we examine whether the measure at issue is a "technical
regulation". Decree 96-1133 aims primarily at the re gulation of a named product, asbestos. The first
and second paragraphs of Article 1 of the Decree impose a prohibition on asbestos fibres, as such.
This prohibition on these fibres does not, in itself , prescribe or impose any "characteristics" on
asbestos fibres, but simply bans them in their natural state. Accordingly, if this measure consisted
only of a prohibition on asbestos fibres, it might not constitute a "technical regulation".

40Panel Report, para. 8.57. We note that the Panel stated that a "technical regulation" must apply to
"identifiable" products (Panel Report, para. 8.38; emphasis added). However, the Panel went on to state that a
"technical regulation" must apply to " given" products (Panel Report, para. 8.57; emphasis added). The Panel
also noted that the measure does not "identify by name nor even by function or category" the products covered
by the measure (Panel Report, para. 8.40; emphasis added). Thus, in parts of the Panel Report, the Panel
appears to require that a "technical regulation" apply to given products rather than identifiable products.

72. There is, however, more to the measure than this prohibition on asbestos fibres. It is not
contested that asbestos fibres have no known use in their raw mineral form.
41 Thus, the regulation of
asbestos can only be achieved through the regulation of products that contain asbestos fibres. This,
too, is addressed by the Decree before us. An integral and essential aspect of the measure is the
regulation of " products containing asbestos fibres ", which are also prohibited by Article 1,
paragraphs I and II of the Decree. It is important to note here that, although formulated negatively –
products containing asbestos are prohibited – the measure, in this respect, effectively prescribes or
imposes certain objective features, qualities or "characteristics" on all products. That is, in effect,
the measure provides that all products must not contain asbestos fibres. Although this prohibition
against products containing asbestos applies to a large number of products, and although it is, indeed,
true that the products to which this prohibition applies cannot be determined from the terms of the
measure itself, it seems to us that the products covered by the measure are identifiable: all products
must be asbestos free; any products containing asbestos are prohibited. We also observe that
compliance with the prohibition against products containing asbestos is mandatory and is, indeed,
enforceable through criminal sanctions.

42
73. Articles 2, 3 and 4 of the Decree also contain certain exceptions to the prohibitions found in
Article 1 of the Decree. As we have already noted, these exceptions would have no meaning in the
absence of the rest of the measure because they define the scope of the prohibitions in the measure.
The nature of these exceptions is to permit the use of certain products containing chrysotile asbestos
fibres, subject to compliance with strict administrative requirements. The scope of the exceptions is
determined by an "exhaustive list" of products that are permitted to contain chrysotile asbestos fibres,
which is promulgated and reviewed annually by a government Minister.

43 The inclusion of a product
in the list of exceptions depends on the absence of an acceptable alternative fibre for incorporation
into a particular product, and the demonstrable provision of "all technical guarantees of safety".

44
Any person seeking to avail himself of these limited exceptions must provide a detailed justification
to the authorities, complete with necessary supporting documentation concerning "the state of

41Canada asserted that "chrysotile fibre has no use in its raw form; it serves as an input in the
production of chrysotile materials" (Panel Report, paras. 3.418 and 3.439). This assertion is not contested by the
European Communities.
42Article 5 of the Decree characterizes a contravention of any aspect of Articles 1.I or 1.II as a "5 th class
offence".
43Article 2.II of the Decree.
44Article 2.I of the Decree.

scientific and technological progress".
45 Compliance with these administrative requirements is
mandatory.
46
74. Like the Panel, we consider that, through these exceptions, the measure sets out the
"applicable administrative provisions, with which compliance is mandatory" for products with certain
objective "characteristics".

47 The exceptions apply to a narrowly defined group of products with
particular "characteristics". Although these products are not named, the measure provides criteria
which permit their identification, both by reference to the qualities the excepted products must possess
and by reference to the list promulgated by the Minister.
75. Viewing the measure as an integrated whole, we see that it lays down "characteristics" for all
products that might contain asbestos, and we see also that it lays down the "applicable administrative
provisions" for certain products containing chrysotile asbestos fibres which are excluded from the
prohibitions in the measure. Accordingly, we find that the measure is a "document" which "lays
down product characteristics … including the applicable administrative provisions, with which
compliance is mandatory." For these reasons, we conclude that the measure constitutes a "technical
regulation" under the TBT Agreement.
76. We, therefore, reverse the Panel's finding, in paragraph 8.72(a) of the Panel Report, that the
TBT Agreement "does not apply to the part of the Decree relating to the ban on imports of asbestos
and asbestos-containing products because that part does not constitute a 'technical regulation' within
the meaning of Annex 1.1 to the TBT Agreement."
77. We note, however – and we emphasize – that this does not mean that all internal measures
covered by Article III:4 of the GATT 1994 "affecting" the "sale, offering for sale, purchase,
transportation, distribution or use" of a product are, necessarily, "technical regulations" under the
TBT Agreement. Rather, we rule only that this particular measure, the Decree at stake, falls within the
definition of a "technical regulation" given in Annex 1.1 of that Agreement.
78. As we have reached a different conclusion from the Panel's regarding the applicability of the
TBT Agreement to the measure, we now consider whether it is appropriate for us to rule on the claims
made by Canada relating to the TBT Agreement. In previous appeals, we have, on occasion,
completed the legal analysis with a view to facilitating the prompt settlement of the dispute, pursuant

45Article 3.I of the Decree.
46Article 3.II of the Decree limits the benefit of the exception to activities that have been the subject of
the necessary formalities.
47Panel Report, para. 8.69.

to Article 3.3 of the DSU.
48 However, we have insisted that we can do so only if the factual findings
of the panel and the undisputed facts in the panel record provide us with a sufficient basis for our own
analysis. If that has not been the case, we have not completed the analysis.

49
79. The need for sufficient facts is not the only limit on our ability to complete the legal analysis
in any given case. In Canada – Periodicals, we reversed the panel's conclusion that the measure at
issue was inconsistent with Article III:2, first sentence, of the GATT 1994, and we then proceeded to
examine the United States' claims under Article III:2, second sentence, which the panel had not
examined at all. However, in embarking there on an analysis of a provision that the panel had not
considered, we emphasized that "the first and second sentences of Article III:2 are closely related
 "
and that those two sentences are "part of a logical continuum."
50 (emphasis added)
80. In this appeal, Canada's outstanding claims were made under Articles 2.1, 2.2, 2.4 and 2.8 of
the TBT Agreement. We observe that, although the TBT Agreement is intended to "further the
objectives of GATT 1994", it does so through a specialized legal regime that applies solely to a
limited class of measures. For these measures, the TBT Agreement imposes obligations on Members

48See, for instance, Appellate Body Report, United States – Gasoline , supra, footnote 15, at 18 ff;
Appellate Body Report, Canada – Certain Measures Concerning Periodicals (" Canada – Periodicals "),
WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, 449, at 469 ff; Appellate Body Report, EC Measures
Concerning Meat and Meat Products (Hormones) (" European Communities – Hormones "), WT/DS26/AB/R,
WT/DS48/AB/R, adopted 13 February 1998, paras. 222 ff; Appellate Body Report, European Communities –
Measures Affecting the Importation of Certain Poultry Products , WT/DS69/AB/R, adopted 23 July 1998,
paras. 156 ff; Appellate Body Report, Australia – Measures Affecting Importation of Salmon (" Australia –
Salmon"), WT/DS18/AB/R, adopted 6 November 1998, paras. 117 ff, 193 ff and 227 ff; Appellate Body
Report, United States – Shrimp , supra, footnote 14, paras. 123 ff; Appellate Body Report, Japan – Measures
Affecting Agricultural Products , WT/DS76/AB/R, adopted 19 March 1999, paras. 112 ff; Appellate Body
Report, United States – Tax Treatment for "Foreign Sales Corporations" , WT/DS108/AB/R, adopted
20 March 2000, paras. 133 ff; Appellate Body Report, Canada – Measures Affecting the Export of Civilian
Aircraft, Recourse by Brazil to Article 21.5 of the DSU , WT/DS70/AB/RW, adopted 4 August 2000,
paras. 43 ff; and Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Wheat
Gluten from the European Communities (" United States – Wheat Gluten "), WT/DS166/AB/R, adopted
19 January 2001, paras. 80 ff and 127 ff.
In addition, after modifying the panel's reasoning, we have, on occasion, applied our interpretation of
the legal provisions at issue to the facts of the case (see, for instance, Appellate Body Report, Argentina –
Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items , WT/DS56/AB/R, adopted
22 April 1998, paras. 48 ff; Appellate Body Report, Canada – Measures Affecting the Importation of Milk and
the Exportation of Dairy Products , WT/DS103/AB/R, WT/DS113/AB/R, adopted 27 October 1999,
paras. 138 ff; Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear ,
WT/DS121/AB/R, adopted 12 January 2000, paras. 109 ff).
49See Appellate Body Report, Australia – Salmon , supra, footnote 48, paras. 209 ff, 241 ff and 255;
Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products ,
WT/DS98/AB/R, adopted 12 January 2000, paras. 91 ff and 102 ff; Appellate Body Report, Canada – Certain
Measures Affecting the Automotive Industry , WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000,
paras. 133 ff and 144 ff; Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and
Frozen Beef ("Korea – Beef "), WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, paras. 128 ff.
50Supra, footnote 48, at 469.

that seem to be different from, and additional to, the obligations imposed on Members under the
GATT 1994.
81. As the Panel decided not to examine Canada's four claims under the TBT Agreement, it made
no findings, at all, regarding any of these claims. Moreover, the meaning of the different obligations
in the TBT Agreement has not previously been the subject of any interpretation or application by
either panels or the Appellate Body. Similarly, the provisions of the Tokyo Round Agreement on
Technical Barriers to Trade , which preceded the TBT Agreement and which contained obligations
similar to those in the TBT Agreement, were also never the subject of even a single ruling by a panel.
82. In light of their novel character, we consider that Canada's claims under the TBT Agreement
have not been explored before us in depth. As the Panel did not address these claims, there are no
"issues of law" or "legal interpretations" regarding them to be analyzed by the parties, and reviewed
by us under Article 17.6 of the DSU. We also observe that the sufficiency of the facts on the record
depends on the reach of the provisions of the TBT Agreement claimed to apply – a reach that has yet
to be determined.
83. With this particular collection of circumstances in mind, we consider that we do not have an
adequate basis properly to examine Canada's claims under Articles 2.1, 2.2, 2.4 and 2.8 of the
TBT Agreement and, accordingly, we refrain from so doing.
VI. "Like Products" in Article III:4 of the GATT 1994
A. Background
84. In addressing Canada's claims under Article III:4 of the GATT 1994, the Panel examined
whether two different sets of products are "like".

51 First, the Panel examined whether chrysotile
asbestos fibres are "like" certain other fibres, namely polyvinyl alcohol fibres ("PVA"), cellulose and
glass fibres (PVA, cellulose and glass fibres are all collectively referred to, in the remainder of this
Report, as "PCG fibres"). The Panel concluded that chrysotile asbestos and PCG fibres are all "like
products" under Article III:4.

52 The Panel next examined whether cement-based products containing
chrysotile asbestos fibres are "like" cement-based products containing one of the PCG fibres . The
Panel also concluded that all these cement-based products are "like".
53

51The Panel's approach is set forth in para. 8.111 of the Panel Report.
52Panel Report, para. 8.144.
53Ibid., para. 8.150.

85. In examining the "likeness" of these two sets of products, the Panel adopted an approach
based on the Report of the Working Party on Border Tax Adjustments .
54 Under that approach, the
Panel employed four general criteria in analyzing "likeness": (i) the properties, nature and quality of
the products; (ii) the end-uses of the products; (iii) consumers' tastes and habits; and, (iv) the tariff
classification of the products. The Panel declined to apply "a criterion on the risk of a product",
"neither in the criterion relating to the properties, nature and quality of the product, nor in the other
likeness criteria …".

55
86. On appeal, the European Communities requests that we reverse the Panel's findings that the
two sets of products examined by the Panel are "like products" under Article III:4 of the GATT 1994,
and requests, in consequence, that we reverse the Panel's finding that the measure is inconsistent with
Article III:4 of the GATT 1994. The European Co mmunities contends that the Panel erred in its
interpretation and application of the concept of "like products", in particular, in excluding from its
analysis consideration of the health risks associated with chrysotile asbestos fibres. According to the
European Communities, in this case, Article III:4 calls for an analysis of the health objective of the
regulatory distinction made in the measure between asbestos fibres, and between products containing
asbestos fibres, and all other products. The European Communities argues that, under Article III:4,
products should not be regarded as "like" unless the regulatory distinction drawn between them
"entails [a] shift in the competitive opportunities" in favour of domestic products.

56
B. Meaning of the Term "Like Products" in Article III:4 of the GATT 1994
87. Article III:4 of the GATT 1994 reads, in relevant part:
The products of the territory of any Member imported into the
territory of any other Member shall be accorded treatment no less
favourable than that accorded to like products of national origin in
respect of all laws, regulations and requirements affecting their
internal sale, offering for sale, purchase, transportation, distribution or
use. … (emphasis added)
88. The European Communities' appeal on this point turns on the interpretation of the word "like"
in the term "like products" in Article III:4 of the GATT 1994. Thus, this appeal provides us with our

54Working Party Report, Border Tax Adjustments, adopted 2 December 1970, BISD 18S/97.
55Panel Report, paras. 8.130 and 8.132.
56European Communities' other appellant's submission, para. 45.

first occasion to examine the meaning of the word "like" in Article III:4 of the GATT 1994.
57 Yet,
this appeal is, of course, not the first time that the term "like products" has been addressed in GATT
or WTO dispute settlement proceedings.

58 Indeed, the term "like product" appears in many different
provisions of the covered agreements, for example, in Articles I:1, II:2, III:2, III:4, VI:1, IX:1,
XI:2(c), XIII:1, XVI:4 and XIX:1 of the GATT 1994.

59 The term is also a key concept in the
Agreement on Subsidies and Countervailing Measures , the Agreement on Implementation of
Article VI of the General Agreement on Tariffs and Trade 1994 (the "Anti-Dumping Agreement "), the

57We have already had occasion to interpret other as pects of Article III:4 of the GATT 1994 in two
other appeals, but in neither appeal were we asked to address the meaning of the term "like products" (see
Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of
Bananas, WT/DS27/AB/R, adopted 25 September 1997, and Appellate Body Report, Korea – Beef , supra,
footnote 49).
58See, for instance, Working Party Report, Brazilian Internal Taxes, adopted 30 June 1949, BISD II/181,
(Article III:2 of the GATT 1947); Working Party Report, The Australian Subsidy on Ammonium Sulphate
("Australia – Ammonium Sulphate"), adopted 3 April 1950, BISD II/188 (Articles I and III:4 of the GATT 1947);
Panel Report, Treatment by Germany of Imports of Sardines ("Germany – Sardines"), adopted 31 October 1952,
BISD 1S/53 (Articles I and XIII of the GATT 1947); Working Party Report , Border Tax Adjustments , supra,
footnote 54 (Articles II, III and XVI of the GATT 1947); Panel Report, EEC – Measures on Animal Feed Proteins
("EEC – Animal Feed "), adopted 14 March 1978, BISD 25S/49 (Articles I, III:2 and III:4 of the GATT 1947);
Panel Report, Spain – Tariff Treatment of Unroasted Coffee, adopted 11 June 1981, BISD 28S/102 (Article I:1 of
the GATT 1947); Panel Report, Spain – Measures Concerning Domestic Sale of Soyabean Oil (" Spain –
Soyabean"), L/5142, 17 June 1981, unadopted (Article III:4 of the GATT 1947); Panel Report, Canada –
Measures Affecting the Sale of Gold Coins , L/5863, 17 September 1985, unadopted (Article III:2 of the
GATT 1947); Panel Report, United States – Taxes on Petroleum and Certain Imported Substances , adopted
17 June 1987, BISD 34S/136 (Article III:2 of the GATT 1947); Panel Report, Japan – Customs Duties, Taxes and
Labelling Practices on Imported Wines and Alcoholic Beverages ("1987 Japan – Alcoholic Beverages"), adopted
10 November 1987, BISD 34S/83 (Article III:2 of the GATT 1947); Panel Report, Canada/Japan – Tariff on
Imports of Spruce, Pine, Fir (SPF) Dimension Lumber , adopted 19 July 1989, BISD 36S/167 (Article I:1 of the
GATT 1947); Panel Report, United States – Definition of Industry Concerning Wine and Grape Products ,
adopted 28 April 1992, BISD 39S/436 (Article VI of the GATT 1947); Panel Report, United States – Denial of
Most-favoured-nation Treatment as to Non-rubber Footwear from Brazil , adopted 19 June 1992, BISD 39S/128
(Article I:1 of the GATT 1947); Panel Report, United States – Measures Affecting Alcoholic and Malt Beverages,
adopted 19 June 1992, BISD 39S/206 (Article III:2 and III:4 of the GATT 1947); Panel Report, United States –
Taxes on Automobiles, DS31/R, 11 October 1994, unadopted (Article III:2 and III:4 of the GATT 1947); Panel
Report, United States – Gasoline , supra, footnote 15 (Article III:4 of the GATT 1994); Panel Report, Japan –
Taxes on Alcoholic Beverages ("Japan – Alcoholic Beverages"), WT/DS8/R, WT/DS10/R, WT/DS11/R, adopted
1 November 1996, as modified by the Appellate Body Report, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R,
DSR 1996:I, 125 (Article III:2 of the GATT 1994); Appellate Body Report, Japan – Alcoholic Beverages ,
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, 97 (Article III:2 of
the GATT 1994); Panel Report, Canada – Periodicals, WT/DS31/R, adopted 30 July 1997, as modified by the
Appellate Body Report, WT/DS31/AB/R, DSR 1997:I, 481 (Articles III:2 and III:4 of the GATT 1994); Appellate
Body Report, Canada – Periodicals; supra, footnote 48 (Article III:2 of the GATT 1994); Panel Report, Indonesia
– Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WTDS64/R,
adopted 23 July 1998 (Articles I:1 and III:2 of the GATT 1994); Panel Report, Korea – Taxes on Alcoholic
Beverages ("Korea – Alcoholic Beverages "), WT/DS75/R, WT/DS84/R, adopted 17 February 1999, as modified
by the Appellate Body Report, WT/DS75/AB/R, WT/DS84/AB/R (Article III:2 of the GATT 1994); Appellate
Body Report, Korea – Alcoholic Beverages , WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999
(Article III:2 of the GATT 1994); Panel Report, Chile – Taxes on Alcoholic Beverages , WT/DS87/R,
WT/DS110/R, adopted 12 January 2000, as modified by the Appellate Body Report, WT/DS87/AB/R,
WT/DS110/AB/R (Article III:2 of the GATT 1994).
59In addition, the term "like commodity" appears in Article VI:7 and the term "like merchandise" is
used in Article VII:2 of the GATT 1994.

Agreement on Safeguards and other covered agreements. In some cases, such as in Article 2.6 of the
Anti-Dumping Agreement , the term is given a specific meaning to be used "[t]hroughout [the]
Agreement", while in others, it is not. In each of the provisions where the term "like products" is
used, the term must be interpreted in light of the context, and of the object and purpose, of the
provision at issue, and of the object and purpose of the covered agreement in which the provision
appears. Accordingly, and as we observed in an earlier case concerning Article III:2 of the
GATT 1994:
… there can be no one precise and absolute definition of what is "like".
The concept of "likeness" is a relative one that evokes the image of an
accordion. The accordion of "likeness" stretches and squeezes in
different places as different provisions of the WTO Agreement are
applied. The width of the accordion in any one of those places must be
determined by the particular provision in which the term "like" is
encountered as well as by the context and the circumstances that
prevail in any given case to which that provision may apply . …

60
(emphasis added)
89. It follows that, while the meaning attributed to the term "like products" in other provisions of
the GATT 1994, or in other covered agreements, may be relevant context in interpreting Article III:4
of the GATT 1994, the interpretation of "like products" in Article III:4 need not be identical, in all
respects, to those other meanings.
90. Bearing these considerations in mind, we turn now to the ordinary meaning of the word "like"
in the term "like products" in Article III:4. According to one dictionary, "like" means:
Having the same characteristics or qualities as some other … thing; of
approximately identical shape, size, etc., with something else;
similar.

61
91. This meaning suggests that "like" products are products that share a number of identical or
similar characteristics or qualities. The reference to "similar" as a synonym of "like" also echoes the
language of the French version of Article III:4, " produits similaires ", and the Spanish version,
"productos similares
", which, together with the English version, are equally authentic.
62

60Appellate Body Report, Japan – Alcoholic Beverages , supra, footnote 58, at 114. We also cautioned
against the automatic transposition of the interpretation of "likeness" under the first sentence of Article III:2 to
other provisions where the phrase "like products" is used (p. 113).
61The New Shorter Oxford English Dictionary , Lesley Brown (ed.) (Clarendon Press, 1993), Vol. I,
p. 1588.
62WTO Agreement, final, authenticating clause. See, also, Article 33(1) of the Vienna Convention of
the Law of the Treaties, done at Vienna, 23 May 1969, 1155 U.N.T.S. 331; 8 International Legal Materials 679.

92. However, as we have previously observed, "dictionary meanings leave many interpretive
questions open."
63 In particular, this definition does not resolve three issues of interpretation. First,
this dictionary definition of "like" does not indicate which characteristics or qualities are important
in assessing the "likeness" of products under Article III:4. For instance, most products will have
many qualities and characteristics, ranging from physical properties such as composition, size, shape,
texture, and possibly taste and smell, to the end-uses and applications of the product. Second, this
dictionary definition provides no guidance in determining the degree or extent to which products
must share qualities or characteristics in order to be "like products" under Article III:4. Products
may share only very few characteristics or qualities, or they may share many. Thus, in the abstract,
the term "like" can encompass a spectrum of differ ing degrees of "likeness" or "similarity". Third,
this dictionary definition of "like" does not indicate from whose perspective "likeness" should be
judged. For instance, ultimate consumers may have a view about the "likeness" of two products that
is very different from that of the inventors or producers of those products.
93. To begin to resolve these issues, we turn to the relevant context of Article III:4 of the
GATT 1994. In that respect, we observe that Article III:2 of the GATT 1994, which deals with the
internal tax treatment of imported and domestic products, prevents Members, through its first
sentence, from imposing internal taxes on imported products "in excess of those applied … to like
domestic products." (emphasis added) In previous Reports, we have held that the scope of "like"
products in this sentence is to be construed "narrowly".

64 This reading of "like" in Article III:2 might
be taken to suggest a similarly narrow reading of "like" in Article III:4, since both provisions form
part of the same Article. However, both of these paragraphs of Article III constitute specific
expressions of the overarching, "general principle", set forth in Article III:1 of the GATT 1994.

65 As
we have previously said, the "general principle" set forth in Article III:1 "informs" the rest of
Article III and acts "as a guide to understanding and interpreting the specific obligations contained" in
the other paragraphs of Article III, including paragraph 4.

66 Thus, in our view, Article III:1 has
particular contextual significance in interpreting Article III:4, as it sets forth the "general principle"
pursued by that provision. Accordingly, in interpreting the term "like products" in Article III:4, we
must turn, first, to the "general principle" in Ar ticle III:1, rather than to the term "like products" in
Article III:2.

63Appellate Body Report, Canada – Measures Affecting th e Export of Civilian Aircraft ,
WT/DS70/AB/R, adopted 20 August 1999, para. 153.
64Appellate Body Report, Japan – Alcoholic Beverages , supra, footnote 58, at 112 and 113. See, also,
Appellate Body Report, Canada – Periodicals, supra, footnote 48, at 473.
65Appellate Body Report, Japan – Alcoholic Beverages, supra, footnote 58, at 111.
66Ibid.

94. In addition, we observe that, although the obligat ions in Articles III:2 and III:4 both apply to
"like products", the text of Article III:2 differs in one important respect from the text of Article III:4.
Article III:2 contains two separate sentences, each imposing distinct obligations: the first lays
down obligations in respect of "like products", wh ile the second lays down obligations in respect of
"directly competitive or substitutable" products.
67 By contrast, Article III:4 applies only to "like
products" and does not include a provision equivalent to the second sentence of Article III:2. We note
that, in this dispute, the Panel did not examine, at all, the significance of this textual difference
between paragraphs 2 and 4 of Article III.
95. For us, this textual difference between paragraphs 2 and 4 of Article III has considerable
implications for the meaning of the term "lik e products" in these two provisions. In Japan –
Alcoholic Beverages, we concluded, in construing Article III:2, that the two separate obligations in
the two sentences of Article III:2 must be interpreted in a harmonious manner that gives meaning to
both sentences in that provision. We observed there that the interpretation of one of the sentences
necessarily affects the interpretation of the other. Thus, the scope of the term "like products" in the
first sentence of Article III:2 affects, and is affected by, the scope of the phrase "directly competitive
or substitutable" products in the second sentence of that provision. We said in Japan – Alcoholic
Beverages:
Because the second sentence of Article III:2 provides for a separate and
distinctive consideration of the protective aspect of a measure in
examining its application to a broader category of products that are not
"like products" as contemplated by the first sentence, we agree with the
Panel that the first sentence of Article III:2 must be construed narrowly
so as not to condemn measures that its strict terms are not meant to
condemn. Consequently, we agree with the Panel also that the
definition of "like products" in Ar ticle III:2, first se ntence, should be
construed narrowly.

68
96. In construing Article III:4, the same interpretive considerations do not arise, because the
"general principle" articulated in Article III:1 is expressed in Article III:4, not through two distinct
obligations, as in the two sentences in Article III:2, but instead through a single obligation that applies
solely to "like products". Therefore, the harmony that we have attributed to the two sentences of
Article III:2 need not and, indeed, cannot be replicated in interpreting Article III:4. Thus, we
conclude that, given the textual difference between Articles III:2 and III:4, the "accordion" of
"likeness" stretches in a different way in Article III:4.

67The meaning of the second sentence of Article III:2 is elaborated upon in the Interpretative Note to
that provision. This note indicates that the second sentence of Article III:2 applies to "directly competitive or
substitutable product[s]".
68Supra, footnote 58, at 112 and 113.

97. We have previously described the "general principle" articulated in Article III:1 as follows:
The broad and fundamental purpos e of Article III is to avoid
protectionism in the application of internal tax and regulatory measures.
More specifically, the purpose of Article III "is to ensure that internal
measures 'not be applied to imported and domestic products so as to
afford protection to domestic production'". Toward this end, Article III
obliges Members of the WTO to provide equality of competitive
conditions for imported products in relation to domestic products
 . …
Article III protects expectations not of any particular trade volume but
rather of the equal competitive relationship between imported and
domestic products. …

69 (emphasis added)
98. As we have said, although this "general principle" is not explicitly invoked in Article III:4,
nevertheless, it "informs" that provision.
70 Therefore, the term "like product" in Article III:4 must be
interpreted to give proper scope and meaning to this principle. In short, there must be consonance
between the objective pursued by Article III, as enunciated in the "general principle" articulated in
Article III:1, and the interpretation of the specific expression of this principle in the text of
Article III:4. This interpretation must, therefore, reflect that, in endeavouring to ensure "equality of
competitive conditions", the "general principle" in Article III seeks to prevent Members from
applying internal taxes and regulations in a manner which affects the competitive relationship, in the
marketplace, between the domestic and imported products involved , "so as to afford protection to
domestic production."
99. As products that are in a competitive relationship in the marketplace could be affected
through treatment of imports "less favourable" than the treatment accorded to domestic products, it
follows that the word "like" in Article III:4 is to be interpreted to apply to products that are in such a
competitive relationship. Thus, a determination of "likeness" under Article III:4 is, fundamentally, a
determination about the nature and extent of a competitive relationship between and among products.
In saying this, we are mindful that there is a spectrum of degrees of "competitiveness" or
"substitutability" of products in the marketplace, and that it is difficult, if not impossible, in the
abstract, to indicate precisely where on this spectrum the word "like" in Article III:4 of the
GATT 1994 falls. We are not saying that all products which are in some competitive relationship
are "like products" under Article III:4. In ruling on the measure at issue, we also do not attempt to
define the precise scope of the word "like" in Article III:4. Nor do we wish to decide if the scope of
"like products" in Article III:4 is co-extensive with the combined scope of "like" and "directly
competitive or substitutable" products in Article III:2. However, we recognize that the relationship
between these two provisions is important, because there is no sharp distinction between fiscal

69Appellate Body Report, Japan – Alcoholic Beverages, supra, footnote 58, at 109 and 110.
70Ibid., at 111.

regulation, covered by Article III:2, and non-fiscal regulation, covered by Article III:4. Both forms of
regulation can often be used to achieve the same ends. It would be incongruous if, due to a significant
difference in the product scope of these two provisions, Members were prevented from using one
form of regulation – for instance, fiscal – to protect domestic production of certain products, but were
able to use another form of regulation – for instance, non-fiscal – to achieve those ends. This would
frustrate a consistent application of the "general principle" in Article III:1. For these reasons, we
conclude that the scope of "like" in Article III:4 is broader than the scope of "like" in Article III:2,
first sentence. Nonetheless, we note, once more, that Article III:2 extends not only to "like products",
but also to products which are "directly competitive or substitutable", and that Article III:4 extends
only to "like products". In view of this different language, and although we need not rule, and do not
rule, on the precise product scope of Article III:4, we do conclude that the product scope of
Article III:4, although broader than the first sentence of Article III:2, is certainly not broader than
the combined product scope of the two sentences of Article III:2 of the GATT 1994.
100. We recognize that, by interpreting the term "like products" in Article III:4 in this way, we
give that provision a relatively broad product scope – although no broader than the product scope of
Article III:2. In so doing, we observe that there is a second element that must be established before a
measure can be held to be inconsistent with Article III:4. Thus, even if two products are "like", that
does not mean that a measure is inconsistent with Article III:4. A complaining Member must still
establish that the measure accords to the group of "like" imported products "less favourable
treatment" than it accords to the group of "like" domestic products. The term "less favourable
treatment" expresses the general principle, in Artic le III:1, that internal regulations "should not be
applied … so as to afford protection to domestic production". If there is "less favourable treatment"
of the group of "like" imported products, there is, conversely, "protection" of the group of "like"
domestic products. However, a Member may draw distinctions between products which have been
found to be "like", without, for this reason alone, according to the group of "like" imported products
"less favourable treatment" than that accorded to the group of "like" domestic products. In this case,
we do not examine further the interpretation of the term "treatment no less favourable" in Article III:4,
as the Panel's findings on this issue have not been appealed or, indeed, argued before us.
C. Examining the "Likeness" of Products under Article III:4 of the GATT 1994
101. We turn to consideration of how a treaty interpreter should proceed in determining whether
products are "like" under Article III:4. As in Arti cle III:2, in this determination, "[n]o one approach
… will be appropriate for all cases."

71 Rather, an assessment utilizing "an unavoidable element of

71Appellate Body Report, Japan – Alcoholic Beverages, supra, footnote 58, at 114.

individual, discretionary judgement"
72 has to be made on a case-by-case basis. The Report of the
Working Party on Border Tax Adjustments outlined an approach for analyzing "likeness" that has
been followed and developed since by several panels and the Appellate Body.
73 This approach has, in
the main, consisted of employing four general criteria in analyzing "likeness": (i) the properties,
nature and quality of the products; (ii) the end-uses of the products; (iii) consumers' tastes and habits
– more comprehensively termed consumers' perceptions and behaviour – in respect of the products;
and (iv) the tariff classification of the products.

74 We note that these four criteria comprise four
categories of "characteristics" that the products involved might share: (i) the physical properties of
the products; (ii) the extent to which the products are capable of serving the same or similar end-uses;
(iii) the extent to which consumers perceive and treat the products as alternative means of performing
particular functions in order to satisfy a particular want or demand; and (iv) the international
classification of the products for tariff purposes.
102. These general criteria, or groupings of potentially shared characteristics, provide a framework
for analyzing the "likeness" of particular products on a case-by-case basis. These criteria are, it is
well to bear in mind, simply tools to assist in the task of sorting and examining the relevant evidence.
They are neither a treaty-mandated nor a closed list of criteria that will determine the legal
characterization of products. More important, the adoption of a particular framework to aid in the
examination of evidence does not dissolve the duty or the need to examine, in each case, all of the
pertinent evidence. In addition, although each criterion addresses, in principle, a different aspect of
the products involved, which should be examined separately, the different criteria are interrelated.
For instance, the physical properties of a product shape and limit the end-uses to which the products
can be devoted. Consumer perceptions may similarly influence – modify or even render obsolete –
traditional uses of the products. Tariff classification clearly reflects the physical properties of a
product.
103. The kind of evidence to be examined in assessing the "likeness" of products will, necessarily,
depend upon the particular products and the legal provision at issue. When all the relevant evidence
has been examined, panels must determine whether that evidence, as a whole, indicates that the
products in question are "like" in terms of the legal provision at issue. We have noted that, under

72Appellate Body Report, Japan – Alcoholic Beverages, supra, footnote 58, at 113.
73See, further, Appellate Body Report, Japan – Alcoholic Beverages, supra, footnote 58, at 113 and, in
particular, footnote 46. See, also, Panel Report, United States – Gasoline, supra, footnote 15, para. 6.8, where the
approach set forth in the Border Tax Adjustment case was adopted in a dispute concerning Article III:4 of the
GATT 1994 by a panel. This point was not appealed in that case.
74The fourth criterion, tariff classification, was not mentioned by the Working Party on Border Tax
Adjustments, but was included by subsequent panels (see, for instance, EEC – Animal Feed, supra, footnote 58,

Article III:4 of the GATT 1994, the term "like produ cts" is concerned with competitive relationships
between and among products. Accordingly, whether the Border Tax Adjustments framework is
adopted or not, it is important under Article III:4 to take account of evidence which indicates whether,
and to what extent, the products involved are – or could be – in a competitive relationship in the
marketplace.
D. The Panel's Findings and Conclusions on "L ikeness" under Article III:4 of the
GATT 1994
1. Overview
104. In this case, the European Communities argues that the Panel erred in its consideration of
"likeness", in particular, because it adopted an exclusively "commercial or market access approach" to
the comparison of allegedly "like products"; placed excessive reliance on a single criterion, namely,
end-use; and failed to include consideration of the health "risk" factors relating to asbestos.

75
105. Before considering these arguments, we think it helpful to summarize the way in which the
Panel assessed the "likeness" of chrysotile asbestos fibres , on the one hand, and the PCG fibres –
PVA, cellulose and glass fibres – on the other. It will be recalled that the Panel adopted the approach
in the Border Tax Adjustments report, using the four general criteria mentioned above.

76 A f t e r
reviewing the first criterion, "properties, nature and quality of the products", the Panel "conclude[d]
that … chrysotile fibres are like PVA, cellulose and glass fibres."
77 (emphasis added) In reaching
this "conclusion", the Panel found that it was not decisive that the products "do not have the same
structure or chemical composition", nor that asbe stos is "unique". Instead, the Panel focused on
"market access" and whether the products have the "same applications" and can "replace" each other
for some industrial uses.

78 The Panel also declined to "[i]ntroduce a criterion on the risk of a
product".
79
106. Under the second criterion, "end-use", the Panel stated that it had already found, under the
first criterion, that the products have "certain identical or at least similar end-uses" and that it did not,
therefore, consider it necessary to elaborate further on this criterion.

80 The Panel declined to "take a
position" on "consumers' tastes and habits", the third criterion, "[b]ecause this criterion would not

75European Communities' other appellant's submission, para. 33.
76Panel Report, paras. 8.114 and 8.115.
77Ibid., para. 8.126.
78Ibid., paras. 8.123, 8.124 and 8.126.
79Ibid., para. 8.130.
80Ibid., para. 8.136.

provide clear results".
81 The Panel observed that consumers' tastes and habits are "very varied".
82
Finally, the Panel did not regard as "decisive" the different "tariff classification" of the fibres.
83
107. Based on this reasoning, the Panel concluded that chrysotile asbestos fibres and PCG fibres
are "like products" under Article III:4 of the GATT 1994.
84
108. The Panel next examined whether cement-based products containing chrysotile asbestos
fibres are "like" cement-based products containing PCG fibres .
85 Applying the reasoning from its
findings on fibres, and noting that the individual cement-based products have the same tariff
classification, irrespective of their fibre content, the Panel concluded that these cement-based products
are also "like" under Article III:4.
86
2. Chrysotile and PCG fibres
109. In our analysis of this issue on appeal, we begin with the Panel's findings on the "likeness" of
chrysotile asbestos and PCG fibres and, in particular, with the Panel's overall approach to examining
the "likeness" of these fibres. It is our view that, having adopted an approach based on the four
criteria set forth in Border Tax Adjustments, the Panel should have examined the evidence relating to
each of those four criteria and, then, weighed all of that evidence, along with any other relevant
evidence, in making an overall determination of whether the products at issue could be characterized
as "like". Yet, the Panel expressed a "conclusion" that the products were "like" after examining only
the first of the four criteria. The Panel then repeated that conclusion under the second criterion –
without further analysis – before dismissing altogether the relevance of the third criterion and also
before rejecting the differing tariff classifications under the fourth criterion. In our view, it was
inappropriate for the Panel to express a "conclusion" after examining only one of the four criteria.

87
By reaching a "conclusion" without examining all of the criteria it had decided to examine, the Panel,
in reality, expressed a conclusion after examining only some of the evidence. Yet, a determination on
the "likeness" of products cannot be made on the basis of a partial analysis of the evidence, after
examination of just one of the criteria the Panel said it would examine. For this reason, we doubt

81Panel Report, para. 8.139.
82Ibid.
83Ibid., para. 8.143.
84Ibid., para. 8.144.
85Ibid.
86Ibid., para. 8.150. The Panel devoted six paragraphs to the "likeness" of the cement-based products,
whereas it devoted 27 paragraphs to the "likeness" of chrysotile asbestos and PCG fibres.
87Ibid., para. 8.126.

whether the Panel's overall approach has allowed the Panel to make a proper characterization of the
"likeness" of the fibres at issue.
110. We must next examine more closely the Panel's treatment of the four individual criteria. We
see the first criterion, "properties, nature and quality", as intended to cover the physical qualities and
characteristics of the products. In analyzing the "properties" of the products, the Panel said that,
"because of its physical and chemical characteristics, asbestos is a unique product ."

88 (emphasis
added) The Panel expressly acknowledged that, based on physical properties alone, "[i]t could … be
concluded that [the fibres] are not like products."
89 (emphasis added) However, to overcome that
fact, the Panel adopted a "market access" approach to this first criterion.
90 Thus, in the course of its
examination of "properties", the Panel went on to rely on " end-uses" – the second criterion – and on
the fact that, in a "small number" of cases, the products have the "same applications" and can
"replace" each other.

91 The Panel then stated:
We therefore conclude that, taking into account the properties
criterion, chrysotile fibres are like PVA, cellulose and glass fibres.
92
111. We believe that physical properties deserve a separate examination that should not be
confused with the examination of end-uses. Although not decisive, the extent to which products share
common physical properties may be a useful indicator of "likeness". Furthermore, the physical
properties of a product may also influence how the product can be used, consumer attitudes about the
product, and tariff classification. It is, therefore, important for a panel to examine fully the physical
character of a product. We are also concerned that it will be difficult for a panel to draw the
appropriate conclusions from the evidence examined under each criterion if a panel's approach does
not clearly address each criterion separately, but rather entwines different, and distinct, elements of
the analysis along the way.
112. In addition, we do not share the Panel's conviction that when two products can be used for the
same end-use, their " properties are then equivalent, if not identical."

93 (emphasis added) Products
with quite different physical properties may, in some situations, be capable of performing similar or
identical end-uses. Although the end-uses are then " equivalent
 ", the physical properties of the

88Panel Report, para. 8.123.
89Ibid., para. 8.121.
90Ibid., paras. 8.122 and 8.124.
91Ibid., paras. 8.123 and 8.125.
92Ibid., para. 8.126.
93Ibid., para. 8.125.

products are not thereby altered; they remain different. Thus, the physical "uniqueness" of asbestos
that the Panel noted does not change depending on the particular use that is made of asbestos.
113. The European Communities argues that the inquiry into the physical properties of products
must include a consideration of the risks posed by the product to human health. In examining the
physical properties of the product at issue in this dispute, the Panel found that "it was not appropriate
to apply the 'risk' criterion proposed by the EC".

94 The Panel said that to do so "would largely nullify
the effect of Article XX(b)" of the GATT 1994.
95 In reviewing this finding by the Panel, we note that
neither the text of Article III:4 nor the practice of panels and the Appellate Body suggest that any
evidence should be excluded a priori from a panel's examination of "likeness". Moreover, as we
have said, in examining the "likeness" of products, panels must evaluate all of the relevant evidence.
We are very much of the view that evidence relating to the health risks associated with a product may
be pertinent in an examination of "likeness" under Article III:4 of the GATT 1994. We do not,
however, consider that the evidence relating to the health risks associated with chrysotile asbestos
fibres need be examined under a separate criterion, because we believe that this evidence can be
evaluated under the existing criteria of physical pr operties, and of consumers' tastes and habits, to
which we will come below.
114. Panels must examine fully the physical properties of products. In particular, panels must
examine those physical properties of products that ar e likely to influence the competitive relationship
between products in the marketplace. In the case of chrysotile asbestos fibres, their molecular
structure, chemical composition, and fibrillation capacity are important because the microscopic
particles and filaments of chrysotile asbestos fibres are carcinogenic in humans, following inhalation.
In this respect, we observe that, at paragraph 8.188 of its Report, the Panel made the following
statements regarding chrysotile asbestos fibres:

94Panel Report, para. 8.132.
95Ibid., para. 8.130.

… we note that the carcinogenicity of chrysotile fibres has been
acknowledged for some time by international bodies. 135 This
carcinogenicity was confirmed by the experts consulted by the Panel,
with respect to both lung cancers and mesotheliomas, even though the
experts appear to acknowledge that chrysotile is less likely to cause
mesotheliomas than amphiboles. We also note that the experts
confirmed that the types of cancer concerned had a mortality rate of
close to 100 per cent. We therefore consider that we have sufficient
evidence that there is in fact a serious carcinogenic risk associated
with the inhalation of chrysotile fibres. Moreover, in the light of the
comments made by one of the experts, the doubts expressed by
Canada with respect to the direct effects of chrysotile on
mesotheliomas and lung cancers are not sufficient to conclude that an
official responsible for public health policy would find that there was
not enough evidence of the existence of a public health risk.
135Since 1977 by the IARC (see List of Agents Carcinogenic to Humans, Overall
Evaluations of Carcinogenicity to Humans , Monographs of the International Agency
for Research on Cancer, Volumes 1-63), see also WHO, IPCS Environmental Health
Criteria (203) on Chrysotile , Geneva (1998), cited in para. 5.584 above. On the
development of knowledge of the risks associated with asbestos, see Dr. Henderson,
para. 5.595.
This carcinogenicity, or toxicity, constitutes, as we see it, a defining aspect of the physical properties
of chrysotile asbestos fibres. The evidence indicates that PCG fibres, in contrast, do not share these
properties, at least to the same extent.

96 We do not see how this highly significant physical difference
cannot be a consideration in examining the physical properties of a product as part of a determination
of "likeness" under Article III:4 of the GATT 1994.
115. We do not agree with the Panel that considering evidence relating to the health risks
associated with a product, under Article III:4, nullifies the effect of Article XX(b) of the GATT 1994.
Article XX(b) allows a Member to "adopt and enforce" a measure, inter alia, necessary to protect
human life or health, even though that measure is inconsistent with another provision of the
GATT 1994. Article III:4 and Article XX(b) are di stinct and independent provisions of the
GATT 1994 each to be interpreted on its own. The scope and meaning of Article III:4 should not be
broadened or restricted beyond what is required by the normal customary international law rules of
treaty interpretation, simply because Article XX(b) exists and may be available to justify measures
inconsistent with Article III:4. The fact that an interpretation of Article III:4, under those rules,
implies a less frequent recourse to Article XX(b) does not deprive the exception in Article XX(b) of
effet utile. Article XX(b) would only be deprived of effet utile if that provision could not serve to
allow a Member to "adopt and enforce" measures "necessary to protect human … life or health".
Evaluating evidence relating to the health risks arising from the physical properties of a product

96Panel Report, para. 8.220.

does not prevent a measure which is inconsistent with Article III:4 from being justified under
Article XX(b). We note, in this regard, that, differ ent inquiries occur under these two very different
Articles. Under Article III:4, evidence relating to health risks may be relevant in assessing the
competitive relationship in the marketplace between allegedly "like" products. The same, or similar,
evidence serves a different purpose under Article XX(b), namely, that of assessing whether a
Member has a sufficient basis for "adopting or enforcing" a WTO-inconsistent measure on the
grounds of human health.
116. We, therefore, find that the Panel erred, in paragraph 8.132 of the Panel Report, in excluding
the health risks associated with chrysotile asbestos fibres from its examination of the physical
properties of that product.
117. Before examining the Panel's findings under the second and third criteria, we note that these
two criteria involve certain of the key elements relating to the competitive relationship between
products: first, the extent to which products are capable of performing the same, or similar, functions
(end-uses), and, second, the extent to which consumers are willing to use the products to perform
these functions (consumers' tastes and habits). Evidence of this type is of particular importance under
Article III of the GATT 1994, precisely because that provision is concerned with competitive
relationships in the marketplace. If there is – or could be – no competitive relationship between
products, a Member cannot intervene, through inte rnal taxation or regulation, to protect domestic
production. Thus, evidence about the extent to which products can serve the same end-uses, and the
extent to which consumers are – or would be – willing to choose one product instead of another to
perform those end-uses, is highly relevant evidence in assessing the "likeness" of those products under
Article III:4 of the GATT 1994.
118. We consider this to be especially so in cases where the evidence relating to properties
establishes that the products at issue are physically quite different. In such cases, in order to
overcome this indication that products are not "like", a higher burden is placed on complaining
Members to establish that, despite the pronounced physical differences, there is a competitive
relationship between the products such that all of the evidence, taken together, demonstrates that the
products are "like" under Article III:4 of the GATT 1994. In this case, where it is clear that the fibres
have very different properties, in particular, because chrysotile is a known carcinogen, a very heavy
burden is placed on Canada to show, under the second and third criteria, that the chrysotile asbestos
and PCG fibres are in such a competitive relationship.
119. With this in mind, we turn to the Panel's evaluation of the second criterion, end-uses. The
Panel's evaluation of this criterion is far from comprehensive. First, as we have said, the Panel
entwined its analysis of "end-uses" with its analysis of "physical properties" and, in purporting to

examine "end-uses" as a distinct criterion, essentially referred to its analysis of "properties".
97 This
makes it difficult to assess precisely how the Panel evaluated the end-uses criterion. Second, the
Panel's analysis of end-uses is based on a "small number of applications" for which the products are
substitutable. Indeed, the Panel stated that "[i]t suffices that, for a given utilization, the properties
are the same to the extent that one product can replace the other."

98 (emphasis added) Although we
agree that it is certainly relevant that products have similar end-uses for a "small number of …
applications", or even for a "given utilization", we think that a panel must also examine the other,
different end-uses for products.

99 It is only by forming a complete picture of the various end-uses of
a product that a panel can assess the significance of the fact that products share a limited number of
end-uses. In this case, the Panel did not provide such a complete picture of the various end-uses of
the different fibres. The Panel did not explain, or elaborate in any way on, the "small number of …
applications" for which the various fibres have similar end-uses. Nor did the Panel examine the end-
uses for these products which were not similar. In these circumstances, we believe that the Panel did
not adequately examine the evidence relating to end-uses.
120. The Panel declined to examine or make any findings relating to the third criterion, consumers'
tastes and habits, "[b]ecause this criterion would not provide clear results".

100 There will be few
situations where the evidence on the "likeness" of products will lend itself to "clear results". In many
cases, the evidence will give conflicting indications, possibly within each of the four criteria. For
instance, there may be some evidence of similar physical properties and some evidence of differing
physical properties. Or the physical properties may differ completely, yet there may be strong
evidence of similar end-uses and a high degree of substitutability of the products from the perspective
of the consumer. A panel cannot decline to inquire into relevant evidence simply because it suspects
that evidence may not be "clear" or, for that matter, because the parties agree that certain evidence is
not relevant.

101 In any event, we have difficulty seeing how the Panel could conclude that an
examination of consumers' tastes and habits "would not provide clear results", given that the Panel did
not examine any evidence relating to this criterion.
121. Furthermore, in a case such as this, where the fibres are physically very different, a panel
cannot conclude that they are "like products" if it does not examine evidence relating to consumers'
tastes and habits. In such a situation, if there is no inquiry into this aspect of the nature and extent of

97Panel Report, para. 8.136.
98Ibid., para. 8.124.
99Ibid., paras. 8.124 and 8.125.
100Ibid., para. 8.139.
101In that respect, we note that, at the oral hearing before us, Canada stated that it believed that the
parties were in agreement that consideration of consumers' tastes and habits "would add nothing" to the
determination of "likeness".

the competitive relationship between the products, there is no basis for overcoming the inference, drawn
from the different physical properties of the products, that the products are not "like".
122. In this case especially, we are also persuaded that evidence relating to consumers' tastes and
habits would establish that the health risks associated with chrysotile asbestos fibres influence
consumers' behaviour with respect to the different fibres at issue.

102 We observe that, as regards
chrysotile asbestos and PCG fibres, the consumer of the fibres is a manufacturer who incorporates the
fibres into another product, such as cement-based products or brake linings. We do not wish to
speculate on what the evidence regarding these consumers would have indicated; rather, we wish to
highlight that consumers' tastes and habits regarding fibres, even in the case of commercial parties,
such as manufacturers, are very likely to be shaped by the health risks associated with a product which is
known to be highly carcinogenic.
103 A manufacturer cannot, for instance, ignore the preferences of the
ultimate consumer of its products. If the risks posed by a particular product are sufficiently great, the
ultimate consumer may simply cease to buy that product. This would, undoubtedly, affect a
manufacturer's decisions in the marketplace. Moreover, in the case of products posing risks to human
health, we think it likely that manufacturers' decisions will be influenced by other factors, such as the
potential civil liability that might flow from marke ting products posing a health risk to the ultimate
consumer, or the additional costs associated with safety procedures required to use such products in the
manufacturing process.
123. Finally, we note that, although we consider consumers' tastes and habits significant in
determining "likeness" in this dispute, at the or al hearing, Canada indicated that it considers this
criterion to be irrelevant, in this dispute, because the existence of the measure has disturbed normal
conditions of competition between the products. In our Report in Korea – Alcoholic Beverages, we
observed that, "[p]articularly in a market where there are regulatory barriers to trade or to competition,
there may well be latent demand" for a product.

104 We noted that, in such situations, "it may be
highly relevant to examine latent demand" that is suppressed by regulatory barriers.
105 In addition,
we said that "evidence from other markets may be pertinent to the examination of the market at issue,
particularly when demand on that market has been influenced by regulatory barriers to trade or to

102We have already noted the health risks associated with chrysotile asbestos fibres in our consideration
of properties (supra, para. 114).
103We recognize that consumers' reactions to products posing a risk to human health vary considerably
depending on the product, and on the consumer. Some dangerous products, such as tobacco, are widely used,
despite the known health risks. The influence known dangers have on consumers' tastes and habits is, therefore,
unlikely to be uniform or entirely predictable.
104Supra, footnote 58, para. 115.
105Ibid., para. 120. We added that "studies of cross-price elasticity … involve an assessment of latent
demand" (para. 121).

competition."
106 We, therefore, do not accept Canada's contention that, in markets where normal
conditions of competition have been disturbed by regulatory or fiscal barriers, consumers' tastes and
habits cease to be relevant. In such situations, a Member may submit evidence of latent, or
suppressed, consumer demand in that market, or it may submit evidence of substitutability from some
relevant third market. In making this point, we do not wish to be taken to suggest that there is latent
demand for chrysotile asbestos fibres. Our point is simply that the existence of the measure does not
render consumers' tastes and habits irrelevant, as Canada contends.
124. We observe also that the Panel did not regard as decisive the different tariff classifications of
the chrysotile asbestos, PVA, cellulose and glass fibres, each of which is classified under a different
tariff heading.

107 In the absence of a full analysis, by the Panel, of the other three criteria addressed,
we cannot determine what importance should be attached to the different tariff classifications of the
fibres.
125. In sum, in our view, the Panel reached the conclusion that chrysotile asbestos and PCG
fibres are "like products" under Article III:4 of the GATT 1994 on the following basis: the Panel
disregarded the quite different "properties, nature and quality" of chrysotile asbestos and PCG fibres,
as well as the different tariff classification of these fibres; it considered no evidence on consumers'
tastes and habits; and it found that, for a "small number" of the many applications of these fibres,
they are substitutable, but it did not consider the many other end-uses for the fibres that are different.
Thus, the only evidence supporting the Panel's finding of "likeness" is the "small number" of shared
end-uses of the fibres.
126. For the reasons we have given, we find this insufficient to justify the conclusion that the
chrysotile asbestos and PCG fibres are "like products" and we, therefore, reverse the Panel's
conclusion, in paragraph 8.144 of the Panel Report, "that chrysotile fibres, on the one hand, and PVA,
cellulose and glass fibres, on the other, are 'like products' within the meaning of Article III:4 of the
GATT 1994."
3. Cement-based products containing chrysotile and PCG fibres
127. Having reversed the Panel's finding on the "likeness" of the fibres, we now examine the
Panel's findings regarding the "likeness" of cement-based products containing chrysotile asbestos
fibres and cement-based products containing PCG fibres . In examining the "likeness" of these
cement-based products, the Panel stated that, physically, the only difference between these products is

106Supra, footnote 58, para. 137.
107Panel Report, para. 8.143.

the incorporation of a different fibre.
108 In this respect, the Panel indicated that "many of the
arguments put forward in relation to chrysotile asbestos, PVA, cellulose and glass fibres are
applicable mutatis mutandis to products containing those fibres."

109 The Panel noted that, for any
given cement-based product, the tariff classification is the same, irrespective of the fibre incorporated
into the product.

110 The Panel declined to examine the "risk" criterion advanced by the European
Communities, and also considered it unnecessary to analyze consumers' tastes and habits.
111 On this
basis, the Panel concluded that "chrysotile-fibre products and fibro-cement products are like products
within the meaning of Article III:4 of the GATT 1994."
112
128. As the Panel said, the primary physical differ ence between cement-based products containing
chrysotile asbestos fibres and cement-based products containing PCG fibres lies in the particular fibre
incorporated into the product. This difference is important because, as we have said in our
examination of fibres, we believe that the health risks associated with a product may be relevant to the
inquiry into the physical properties of a product when making a determination of "likeness" under
Article III:4 of the GATT 1994.

113 This is also true for cement-based products containing the
different fibres. In examining the physical properties of the two sets of cement-based products, it
cannot be ignored that one set of products contains a fibre known to be highly carcinogenic, while the
other does not.
114 In this respect, we recall that the Panel concluded that "there is an undeniable
public health risk in relation to chrysotile cont ained in high-density chrysotile-cement products."
115
We, therefore, reverse the Panel's finding, in paragraph 8.149 of the Panel Report, that these health
risks are not relevant in examining the "likeness" of the cement-based products.
129. Furthermore, the Panel did not indicate whether or to what extent the incorporation of one
type of fibre, instead of another, affects other physical properties of a particular cement-based product
and, consequently, affects the suitability of that product for a specific end-use. The Panel noted that
the fibres give the products their specific function – "mechanical strength, resistance to heat,
compression, etc." – but the Panel did not examine the extent to which the presence of a particular

108Panel Report, para. 8.145.
109Ibid.
110Ibid., para. 8.148.
111Ibid., para. 8.149.
112Ibid., para. 8.150.
113Supra, para. 113.
114Supra, para. 114.
115Panel Report, para. 8.203.

fibre affects the ability of a cement-based product to perform one or more of these functions
efficiently.
116
130. In addition, even if the cement-based products were functionally interchangeable, we consider
it likely that the presence of a known carcinogen in one of the products would have an influence on
consumers' tastes and habits regarding that product. We believe this to be true irrespective of
whether the consumer of the cement-based products is a commercial party, such as a construction
company, or is an individual, for instance, a do- it-yourself ("DIY") enthusiast or someone who owns
or lives or works in a building. This influence may well vary, but the possibility of such an influence
should not be overlooked by a panel when considering the "likeness" of products containing chrysotile
asbestos. In the absence of an examination of consumers' tastes and habits, we do not see how the
Panel could reach a conclusion on the "likeness" of the cement-based products at issue.

117
131. For all of these reasons, we reverse the Panel's conclusion, in paragraph 8.150 of the Panel
Report, "that chrysotile-fibre products and fibro-cement products are like products within the meaning
of Article III:4 of the GATT 1994."
132. As we have reversed the Panel's findings that chrysotile asbestos fibres and PCG fibres are
"like products" under Article III:4 of the GATT 1994, and also the Panel's findings that cement-based
products containing chrysotile asbestos fibres an d cement-based products containing PCG fibres are
"like products" under that provision, we also reverse, in consequence, the Panel's conclusion, in
paragraph 8.158 of the Panel Report, that the measure is inconsistent with Article III:4 of the
GATT 1994 as this finding rests, in part, on the Panel's findings that the two sets of products are
"like".
E. Completing the "Like Product" Analysis under Article III:4 of the GATT 1994
133. As we have reversed both of the Panel's conclusions on "likeness" under Article III:4 of the
GATT 1994, we think it appropriate to complete the analysis, on the basis of the factual findings of
the Panel and of the undisputed facts in the Panel record. We have already examined the meaning of
the term "like products", and we have also approved the approach for inquiring into "likeness" that is
based on the Report of the Working Party in Border Tax Adjustments and that was also approved,
though not entirely followed, by the Panel in this case. Under that approach, the evidence is to be
examined under four criteria: physical properties; end-uses; consumers' tastes and habits; and tariff
classification.

116Panel Report, para. 8.145.
117See, further, supra, paras. 117 and 118. See, also, supra, paras. 121 and 122.

1. Chrysotile and PCG fibres
134. We address first the "likeness" of chrysotile asbestos fibres and PCG fibres. As regards the
physical properties of these fibres, we recall that the Panel stated that:
The Panel notes that no party contests that the structure of chrysotile
fibres is unique by nature and in comparison with artificial fibres that
can replace chrysotile asbestos. The parties agree that none of the
substitute fibres mentioned by Canada in connection with Article III:4
has the same structure, either in terms of its form, its diameter, its
length or its potential to release particles that possess certain
characteristics. Moreover, they do not have the same chemical
composition, which means that, in purely physical terms, none of
them has the same nature or quality. …

118
135. We also see it as important to take into account that, since 1977, chrysotile asbestos fibres
have been recognized internationally as a known carcinogen because of the particular combination of
their molecular structure, chemical composition, and fibrillation capacity.

119 In that respect, the Panel
noted that:
… the carcinogenicity of chrysotile fibres has been acknowledged for
some time by international bodies. This carcinogenicity was
confirmed by the experts consulted by the Panel, with respect to both
lung cancers and mesotheliomas, even though the experts appear to
acknowledge that chrysotile is less likely to cause mesotheliomas than
amphiboles. We also note that the experts confirmed that the types of
cancer concerned had a mortality rate of close to 100 per cent. We
therefore consider that we have sufficient evidence that there is in fact
a serious carcinogenic risk associated with the inhalation of chrysotile
fibres. …

120
In contrast, the Panel found that the PCG fibres "are not classified by the WHO at the same level of
risk as chrysotile."
121 The experts also confirmed, as the Panel reported, that current scientific
evidence indicates that PCG fibres do "not present the same risk to health as chrysotile" asbestos
fibres.
122
136. It follows that the evidence relating to properties indicates that, physically, chrysotile asbestos
and PCG fibres are very different. As we said earlier, in such cases, in order to overcome this
indication that products are not "like", a high burden is imposed on a complaining Member to

118Panel Report, para. 8.121.
119Supra, para. 114.
120Panel Report, para. 8.188.
121Ibid., para. 8.220.
122Ibid.

establish that, despite the pronounced physical differences, there is a competitive relationship between
the products such that, all of the evidence, taken together, demonstrates that the products are "like"
under Article III:4 of the GATT 1994.
137. The Panel observed that the end-uses of chrysotile asbestos and PCG fibres are the same "for
a small number" of applications.
123 The Panel simply adverted to these overlapping end-uses and
offered no elaboration on their nature and character. We note that Canada argued before the Panel
that there are some 3,000 commercial applications for asbestos fibres.

124 Canada and the European
Communities indicated that the most important end-uses for asbestos fibres include, in no particular
order, incorporation into: cement-based products; insulation; and various forms of friction lining.
125
Canada noted that 90 percent, by quantity, of French imports of chrysotile asbestos were used in the
production of cement-based products.

126 This evidence suggests that chrysotile asbestos and PCG
fibres share a small number of similar end-uses and, that, as Canada asserted, for chrysotile asbestos,
these overlapping end-uses represent an important proportion of the end-uses made of chrysotile
asbestos, measured in terms of quantity.
138. There is, however, no evidence on the record regarding the nature and extent of the many
end-uses for chrysotile asbestos and PCG fibres which are not overlapping. Thus, we do not know
what proportion of all end-uses for chrysotile asbestos and PCG fibres overlap. Where products have
a wide range of end-uses, only some of which overlap, we do not believe that it is sufficient to rely
solely on evidence regarding the overlapping end-uses, without also examining evidence of the nature
and importance of these end-uses in relation to all of the other possible end-uses for the products. In
the absence of such evidence, we cannot determine the significance of the fact that chrysotile asbestos
and PCG fibres share a small number of similar end-uses.
139. As we have already stated, Canada took the view, both before the Panel and before us, that
consumers' tastes and habits have no relevance to the inquiry into the "likeness" of the fibres.

127 We
have already addressed, and dismissed, the arguments advanced by Canada in support of this
contention.
128 We have also stated that, in a case such as this one, where the physical properties of
the fibres are very different, an examination of the evidence relating to consumers' tastes and habits is
an indispensable – although not, on its own, sufficient – aspect of any determination that products are

123Panel Report, para. 8.125.
124Ibid., para. 3.21.
125Ibid., paras. 3.21 (Canada) and 3.23 (European Communities). The lists of important uses given by
the parties is not identical in all respects and we have distilled from each list the common elements.
126Panel Report, para. 3.21, footnote 7.
127Supra, paras. 120 and 123.
128Ibid.

"like" under Article III:4 of the GATT 1994.
129 If there is no evidence on this aspect of the
nature and extent of the competitive relationship between the fibres, there is no basis for overcoming the
inference, drawn from the different physical properties, that the products are not "like". However, in
keeping with its argument that this criterion is irrelevant, Canada presented no evidence on
consumers' tastes and habits regarding chrysotile asbestos and PCG fibres.

130
140. Finally, we note that chrysotile asbestos fibres and the various PCG fibres all have different
tariff classifications. While this element is not, on its own, decisive, it does tend to indicate that
chrysotile and PCG fibres are not "like products" under Article III:4 of the GATT 1994.
141. Taken together, in our view, all of this evidence is certainly far from sufficient to satisfy
Canada's burden of proving that chrysotile asbestos fibres are "like" PCG fibres under Article III:4 of
the GATT 1994. Indeed, this evidence rather tends to suggest that these products are not "like
products" for the purposes of Article III:4 of the GATT 1994.
2. Cement-based products containing chrysotile and PCG fibres
142. We turn next to consider whether cement-based products containing chrysotile asbestos
fibres are "like" cement-based products containing PCG fibres under Article III:4 of the
GATT 1994. We begin, once again, with physical properties. In terms of composition, the physical
properties of the different cement-based products appear to be relatively similar. Yet, there is one
principal and significant difference between these products: one set of cement-based products
contains a known carcinogenic fibre, while the other does not. The Panel concluded that the presence
of chrysotile asbestos fibres in cement-based products poses "an undeniable public health risk".

131
143. The Panel stated that the fibres give the cement-based products their specific function –
"mechanical strength, resistance to heat, compression, etc."
132 These functions are clearly based on
the physical properties of the products. There is no evidence of record to indicate whether the
presence of chrysotile asbestos fibres, rather than PCG fibres, in a particular cement-based product,
affects these particular physical properties of the products. For instance, a tile incorporating
chrysotile asbestos fibres may be more heat resistant than a tile incorporating a PCG fibre.

129Our reasons for reaching this conclusion are set forth, supra, in paras. 117, 118, 121 and 122.
130Canada did present evidence that the impact of the Decree was to reduce demand for chrysotile
(Panel Report, paras. 3.20 and 3.422). However, as Canada recognized, this is a necessary consequence of the
prohibition on chrysotile and is not evidence of consumers' attitudes and choices regarding the products at issue.
As we have said, regulatory measures may suppress latent consumer demand for a product (supra, para. 123).
131Panel Report, para. 8.203.
132Ibid., para. 8.145.

144. In addition, there is no evidence to indicate to what extent the incorporation of one type of
fibre, instead of another, affects the suitability of a particular cement-based product for a specific end-
use.

133 Once again, it may be that tiles containing chrysotile asbestos fibres perform some end-uses,
such as resistance to heat, more efficiently than tiles containing a PCG fibre. Thus, while we accept
that the two different types of cement-based products may perform largely similar end-uses, in the
absence of evidence, we cannot determine whether each type of cement-based product can perform,
with equal efficiency, all of the functions performed by the other type of cement-based product.
145. As with the fibres, Canada contends that evidence on consumers' tastes and habits concerning
cement-based products is irrelevant. Accordingly, Canada submitted no such evidence to the Panel.
We have dismissed Canada's arguments in support of this contention.

134 We have also indicated that
it is of particular importance, under Article III of the GATT 1994, to examine evidence relating to
competitive relationships in the marketplace.

135 We consider it likely that the presence of a known
carcinogen in one of the products will have an influence on consumers' tastes and habits regarding
that product.

136 It may be, for instance, that, although cement-based products containing chrysotile
asbestos fibres are capable of performing the same functions as other cement-based products,
consumers are, to a greater or lesser extent, not willing to use products containing chrysotile asbestos
fibres because of the health risks associated with th em. Yet, this is only speculation; the point is,
there is no evidence. We are of the view that a determination on the "likeness" of the cement-based
products cannot be made, under Article III:4, in the absence of an examination of evidence on
consumers' tastes and habits. And, in this case, no such evidence has been submitted.
146. As regards tariff classification, we observe that, for any given cement-based product, the tariff
classification of the product is the same.

137 However, this indication of "likeness" cannot, on its own,
be decisive.
147. Thus, we find that, in particular, in the absence of any evidence concerning consumers' tastes
and habits, Canada has not satisfied its burden of proving that cement-based products containing
chrysotile asbestos fibres are "like" cement-based products containing PCG fibres, under Article III:4
of the GATT 1994.
148. As Canada has not demonstrated either that chrysotile asbestos fibres are "like" PCG fibres,
or that cement-based products containing chrysotile asbestos fibres are "like" cement-based products

133Supra, para. 129.
134Supra, paras. 120 and 123.
135Supra, para. 117.
136Supra, para. 130.
137Panel Report, para. 8.148.

containing PCG fibres, we conclude that Canada has not succeeded in establishing that the measure at
issue is inconsistent with Article III:4 of the GATT 1994.
149. One Member of the Division hearing this appeal wishes to make a concurring statement. At
the outset, I would like to make it abundantly cl ear that I agree with the findings and conclusions
reached, and the reasoning set out in support thereof, by the Division, in: Section V ( TBT
Agreement); Section VII (Article XX(b) of the GATT 1994 and Article 11 of the DSU); Section VIII
(Article XXIII:1(b) of the GATT 1994); and Secti on IX (Findings and Conclusions) of the Report.
This concurring statement, in other words, relates only to Section VI ("Like Products" in Article III:4
of the GATT 1994) of the Report.
150. More particularly, in respect of Section VI of the Report, I join in the findings and
conclusions set out in: paragraphs 116, 126, 128, 131, 132, 141, 147 and 148. I am bound to say that,
in truth, I agree with a great deal more than just the bare findings and conclusions contained in these
eight paragraphs of the Report. It is, however, as a practical matter, not feasible to sort out and
identify which part of which paragraph, of the sixty-odd paragraphs comprising Section VI of our
Report in which I join. Nor is it feasible to offer a detailed statement with respect to the portions that
would then remain. Accordingly, I set out only two related matters below.
151. In paragraph 113 of the Report, we state that "[w]e are very much of the view that evidence
relating to the health risks associated with a product may be pertinent in an examination of 'likeness'
under Article III:4 of the GATT 1994." We also point out, in paragraph 114, that "[p]anels must
examine fully the physical properties of products. In particular, … those physical properties of
products that are likely to influence the competitive relationship between products in the market place.
In the cases of chrysotile asbestos fibres, their molecular structure, chemical composition, and
fibrillation capacity are important because the microscopic particles and filaments of chrysotile
asbestos fibres are carcinogenic in humans, following inhalation." This carcinogenicity we describe
as "a defining aspect of the physical properties of chrysotile asbestos fibres"

138, which property is not
shared by the PCG fibres, "at least to the same extent."
139 We express our inability to "see how this
highly significant physical difference cannot be a consideration in examining the physical properties
of a product as part of a determination of 'likeness' under Article III:4 of the GATT 19 94."
140
(emphasis in the original) We observe also that the Panel, after noting that the carcinogenicity of
chrysotile asbestos fibres has been acknowledged by international bodies and confirmed by the
experts the Panel consulted, ruled that it "[has] sufficient evidence that there is in fact a serious

138Supra, para. 114.
139Ibid.
140Ibid.

carcinogenic risk associated with the inhalation of chrysotile fibres."
141 (emphasis added) In fact, the
scientific evidence of record for this finding of carcinogenicity of chrysotile asbestos fibres is so clear,
voluminous, and is confirmed, a number of times, by a variety of international organizations, as to be
practically overwhelming.
152. In the present appeal, considering the nature and quantum of the scientific evidence showing
that the physical properties and qualities of chrysotile asbestos fibres include or result in
carcinogenicity, my submission is that there is ample basis for a definitive characterization, on
completion of the legal analysis, of such fibres as not "like" PCG fibres. PCG fibres, it may be
recalled, have not been shown by Canada to have the same lethal properties as chrysotile asbestos
fibres. That definitive characterization, it is further submitted, may and should be made even in the
absence of evidence concerning the other two Border Tax Adjustments criteria (categories of
"potentially shared characteristics") of end-uses and consumers' tastes and habits. It is difficult for me
to imagine what evidence relating to economic comp etitive relationships as reflected in end-uses and
consumers' tastes and habits could outweigh and set at naught the undisputed deadly nature of
chrysotile asbestos fibres, compared with PCG fibres, when inhaled by humans, and thereby compel a
characterization of "likeness" of chrysotile asbestos and PCG fibres.
153. The suggestion I make is not that any kind or degree of health risk, associated with a
particular product, would a priori negate a finding of the "likeness" of that product with another
product, under Article III:4 of the GATT 1994. The suggestion is a very narrow one, limited only to
the circumstances of this case, and confined to chrysotile asbestos fibres as compared with PCG
fibres. To hold that these fibres are not "like" one another in view of the undisputed carcinogenic
nature of chrysotile asbestos fibres appears to me to be but a small and modest step forward from
mere reversal of the Panel's ruling that chrysotile asbestos and PCG fibres are "like", especially since
our holding in completing the analysis is that Ca nada failed to satisfy a complainant's burden of
proving that PCG fibres are "like" chrysotile asbestos fibres under Article III:4. That small step,
however, the other Members of the Division feel unable to take because of their conception of the
"fundamental", perhaps decisive, role of economic competitive relationships in the determination of
the "likeness" of products under Article III:4.
154. My second point is that the necessity or appropriateness of adopting a "fundamentally"
economic interpretation of the "likeness" of products under Article III:4 of the GATT 1994 does not
appear to me to be free from substantial doubt. Moreover, in future concrete contexts, the line
between a "fundamentally" and "exclusively" economic view of "like products" under Article III:4
may well prove very difficult, as a practical matter, to identify. It seems to me the better part of

valour to reserve one's opinion on such an impor tant, indeed, philosophical matter, which may have
unforeseeable implications, and to leave that matter for another appeal and another day, or perhaps
other appeals and other days. I so reserve my opinion on this matter.
VII. Article XX(b) of the GATT 1994 and Article 11 of the DSU
155. Under Article XX(b) of the GATT 1994, the Panel examined, first, whether the use of
chrysotile-cement products poses a risk to human health and, second, whether the measure at issue is
"necessary to protect human … life or health". Canada contends that the Panel erred in law in its
findings on both these issues. We will examine these two issues in turn before addressing Canada's
appeal that the Panel failed to make an "objective assessment", under Article 11 of the DSU, in
reaching its conclusions under Article XX(b) of the GATT 1994.
156. We recall that Article XX(b) of the GATT 1994 reads:
Subject to the requirement that such measures are not applied in a
manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions prevail,
or a disguised restriction on international trade, nothing in this
Agreement shall be construed to prevent the adoption or
enforcement by any Member of measures:
…
(b) necessary to protect human , animal or plant life or
health; (emphasis added)
…
A. "To Protect Human Life or Health"
157. On the issue of whether the use of chrysotile-cement products poses a risk to human health
sufficient to enable the measure to fall within the scope of application of the phrase "to protect
human … life or health" in Article XX(b), the Panel stated that it "considers that the evidence before
it tends to show that handling chrysotile-cement products co nstitutes a risk to health rather than the
opposite."

142 (emphasis added) On the basis of this assessment of the evidence, the Panel concluded
that:

142Panel Report, para. 8.193.

… the EC has made a prima facie case for the existence of a health
risk in connection with the use of chrysotile, in particular as regards
lung cancer and mesothelioma in the occupational sectors downstream
of production and processing and for the public in general in relation
to chrysotile-cement products. This prima facie case has not been
rebutted by Canada. Moreover, the Panel considers that the comments
by the experts confirm the health risk associated with exposure to
chrysotile in its various uses. The Panel therefore considers that the
EC have shown that the policy of prohibiting chrysotile asbestos
implemented by the Decree falls within the range of policies designed
to protect human life or health. …
143 (emphasis added)
Thus, the Panel found that the measure falls within the category of measures embraced by
Article XX(b) of the GATT 1994.
158. According to Canada, the Panel deduced that there was a risk to human life or health
associated with manipulation of chrysotile-cement products from seven factors.
144 These seven
factors all relate to the scientific evidence which was before the Panel, including the opinion of the
scientific experts. Canada argues that the Panel erred in law by deducing from these seven factors
that chrysotile-cement products pose a risk to human life or health.

145
159. Although Canada does not base its arguments about these seven factors on Article 11 of the
DSU, we bear in mind the discretion that is enjoyed by panels as the trier of facts. In United States –
Wheat Gluten, we said:
… in view of the distinction between the respective roles of the
Appellate Body and panels, we have taken care to emphasize that a
panel's appreciation of the evidence falls, in principle, "within the
scope of the panel's discretion as the trier of facts ". (emphasis added)
In assessing the panel's appreciation of the evidence, we cannot base a
finding of inconsistency under Article 11 simply on the conclusion
that we might have reached a different factual finding from the one the
panel reached. Rather, we must be satisfied that the panel has
exceeded the bounds of its discretion, as the trier of facts, in its
appreciation of the evidence. As is clear from previous appeals, we
will not interfere lightly with the panel's exercise of its discretion.

146
160. In Korea – Alcoholic Beverages, we were faced with arguments that sought to cast doubt on
certain studies relied on by the panel in that case. We stated:

143Panel Report, para. 8.194.
144Canada's appellant's submission, para. 170. The seven factors Canada relies upon are identified in
para. 19 of this Report.
146Supra, footnote 48, para. 151.

The Panel's examination and weighing of the evidence submitted fall,
in principle, within the scope of the Panel's discretion as the trier of
facts and, accordingly, outside the scope of appellate review. This is
true, for instance, with respect to the Panel's treatment of the Dodwell
Study, the Sofres Report and the Nielsen Study. We cannot second-
guess the Panel in appreciating either the evidentiary value of such
studies or the consequences, if any, of alleged defects in those studies .
Similarly, it is not for us to review the relative weight ascribed to
evidence on such matters as marketing studies …
147 (emphasis added)
161. The same holds true in this case. The Panel enjoyed a margin of discretion in assessing the
value of the evidence, and the weight to be ascribed to that evidence. The Panel was entitled, in the
exercise of its discretion, to determine that cert ain elements of evidence should be accorded more
weight than other elements – that is the essence of the task of appreciating the evidence.
162. With this in mind, we have examined the seven factors on which Canada relies in asserting
that the Panel erred in concluding that there ex ists a human health risk associated with the
manipulation of chrysotile-cement products. We see Canada's appeal on this point as, in reality, a
challenge to the Panel's assessment of the credibility and weight to be ascribed to the scientific
evidence before it. Canada contests the conclusions that the Panel drew both from the evidence of the
scientific experts and from scientific reports before it. As we have noted, we will interfere with the
Panel's appreciation of the evidence only when we are "satisfied that the panel has exceeded the
bounds of its discretion, as the trier of facts, in its appreciation of the evidence."

148 (emphasis added)
In this case, nothing suggests that the Panel exceeded the bounds of its lawful discretion. To the
contrary, all four of the scientific experts consulted by the Panel concurred that chrysotile asbestos
fibres, and chrysotile-cement products, constitute a risk to human health, and the Panel's conclusions
on this point are faithful to the views expressed by the four scientists. In addition, the Panel noted that
the carcinogenic nature of chrysotile asbestos fibres has been acknowledged since 1977 by
international bodies, such as the International Agency for Research on Cancer and the World Health
Organization.

149 In these circumstances, we find that the Panel remained well within the bounds of its
discretion in finding that chrysotile-cement products pose a risk to human life or health.
163. Accordingly, we uphold the Panel's finding, in paragraph 8.194 of the Panel Report, that the
measure "protect[s] human … life or health", with in the meaning of Article XX(b) of the GATT 1994.

147Supra, footnote 58, para. 161.
148Appellate Body Report, United States – Wheat Gluten, supra, footnote 48, para. 151.
149Panel Report, para. 8.188.

B. "Necessary"
164. On the issue of whether the measure at issue is "necessary" to protect public health within the
meaning of Article XX(b), the Panel stated:
In the light of France's public health objectives as presented by the
European Communities, the Panel concludes that the EC has made a
prima facie case for the non-existence of a reasonably available
alternative to the banning of chrysotile and chrysotile-cement products
and recourse to substitute products. Canada has not rebutted the
presumption established by the EC. We also consider that the EC's
position is confirmed by the comments of the experts consulted in the
course of this proceeding.

150
165. Canada argues that the Panel erred in applying the "necessity" test under Article XX(b) of the
GATT 1994 "by stating that there is a high enough risk associated with the manipulation of
chrysotile-cement products that it could in principle justify strict measures such as the Decree."

151
Canada advances four arguments in support of this part of its appeal. First, Canada argues that the
Panel erred in finding, on the basis of the scientific evidence before it, that chrysotile-cement products
pose a risk to human health.

152 Second, Canada contends that the Panel had an obligation to
"quantify" itself the risk associated with chrysotile-cement products and that it could not simply "rely"
on the "hypotheses" of the French authorities.

153
 Third, Canada asserts that the Panel erred by
postulating that the level of protection of health inherent in the Decree is a halt to the spread of
asbestos-related health risks. According to Canada, this "premise is false because it does not take into
account the risk associated with the use of substitute products without a framework for controlled
use."

154 Fourth, and finally, Canada claims that the Panel erred in finding that "controlled use" is not
a reasonably available alternative to the Decree.
166. With respect to Canada's first argument, we note simply that we have already dismissed
Canada's contention that the evidence before the Panel did not support the Panel's findings.
155 We are
satisfied that the Panel had a more than sufficient basis to conclude that chrysotile-cement products do
pose a significant risk to human life or health.

150Panel Report, para. 8.222.
152Ibid., paras. 188 and 189.
153Ibid., para. 193.
154Ibid., para. 195.
155Supra, paras. 159-163.

167. As for Canada's second argument, relating to "quantification" of the risk, we consider that, as
with the SPS Agreement, there is no requirement under Article XX(b) of the GATT 1994 to
quantify, as such, the risk to human life or health.
156 A risk may be evaluated either in quantitative or
qualitative terms. In this case, contrary to what is suggested by Canada, the Panel assessed the nature
and the character of the risk posed by chrysotile-cement products. The Panel found, on the basis of
the scientific evidence, that "no minimum threshold of level of exposure or duration of exposure has
been identified with regard to the risk of pa thologies associated with chrysotile, except for
asbestosis."

157 The pathologies which the Panel identified as being associated with chrysotile are of a
very serious nature, namely lung cancer and mesothelioma, which is also a form of cancer.
158
Therefore, we do not agree with Canada that the Panel merely relied on the French authorities'
"hypotheses" of the risk.
168. As to Canada's third argument, relating to the level of protection, we note that it is undisputed
that WTO Members have the right to determine the level of protection of health that they consider
appropriate in a given situation. France has determined, and the Panel accepted

159, that the chosen
level of health protection by France is a "halt" to the spread of asbestos-related health risks. By
prohibiting all forms of amphibole asbestos, and by severely restricting the use of chrysotile asbestos,
the measure at issue is clearly designed and apt to achieve that level of health protection. Our
conclusion is not altered by the fact that PCG fibres might pose a risk to health. The scientific
evidence before the Panel indicated that the risk posed by the PCG fibres is, in any case, less than the
risk posed by chrysotile asbestos fibres

160, although that evidence did not indicate that the risk posed
by PCG fibres is non-existent. Accordingly, it seems to us perfectly legitimate for a Member to seek
to halt the spread of a highly risky product while allowing the use of a less risky product in its place.
In short, we do not agree with Canada's third argument.
169. In its fourth argument, Canada asserts that the Panel erred in finding that "controlled use" is
not a reasonably available alternative to the Decree. This last argument is based on Canada's assertion
that, in United States – Gasoline, both we and the panel held that an alternative measure "can only be
ruled out if it is shown to be impossible to implement."

161 We understand Canada to mean by this that
an alternative measure is only excluded as a "reasonably available" alternative if implementation of

156Appellate Body Report, European Communities – Hormones, supra, footnote 48, para. 186.
157Panel Report, para. 8.202.
158Ibid., para. 8.188. See Panel Report, para. 5.29, for a description of mesothelioma given by
Dr. Henderson.
159Ibid., para. 8.204.
160Ibid., para. 8.220.
161Canada's appellant's submission, para. 202, referring to, inter alia, para. 130 of that submission.

that measure is "impossible". We certainly agree with Canada that an alternative measure which is
impossible to implement is not "reasonably available". But we do not agree with Canada's reading of
either the panel report or our report in United States – Gasoline . In United States – Gasoline , the
panel held, in essence, that an alternative measure did not cease to be "reasonably" available simply
because the alternative measure involved administrative difficulties for a Member.

162 The panel's
findings on this point were not appealed, and, thus, we did not address this issue in that case.
170. Looking at this issue now, we believe that, in determining whether a suggested alternative
measure is "reasonably available", several factors must be taken into account, besides the difficulty of
implementation. In Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes , the
panel made the following observations on the applicable standard for evaluating whether a measure is
"necessary" under Article XX(b):
The import restrictions imposed by Thailand could be considered to be
"necessary" in terms of Article XX(b) only if there were no alternative
measure consistent with the General Agreement, or less inconsistent
with it, which Thailand could reasonably be expected to employ to
achieve its health policy objectives.

163 (emphasis added)
171. In our Report in Korea –Beef, we addressed the issue of "necessity" under Article XX(d) of
the GATT 1994.
164 In that appeal, we found that the panel was correct in following the standard set
forth by the panel in United States – Section 337 of the Tariff Act of 1930:
It was clear to the Panel that a contracting party cannot justify a
measure inconsistent with another GATT provision as "necessary" in
terms of Article XX(d) if an alternative measure which it could
reasonably be expected to employ and which is not inconsistent with
other GATT provisions is available to it. By the same token, in
cases where a measure consistent with other GATT provisions is not
reasonably available, a contracting party is bound to use, among the
measures reasonably available to it, that which entails the least
degree of inconsistency with other GATT provisions.

165
172. We indicated in Korea – Beef that one aspect of the "weighing and balancing process …
comprehended in the determination of whether a WTO-consistent alternative measure" is reasonably
available is the extent to which the alternative m easure "contributes to the realization of the end

162See Panel Report, United States – Gasoline, supra, footnote 15, paras. 6.26 and 6.28.
163Adopted 20 February 1990, BISD 37S/200, para. 75.
164Supra, footnote 49, paras. 159 ff.
165Adopted 7 November 1989, BISD 36S/345, para. 5.26; we expressly affirmed this standard in our
Report in Korea – Beef, supra, footnote 49, para. 166.

pursued".
166 In addition, we observed, in that case, that "[t]he more vital or important [the] common
interests or values" pursued, the easier it would be to accept as "necessary" measures designed to
achieve those ends.

167 In this case, the objective pursued by the measure is the preservation of human
life and health through the elimination, or reduction, of the well-known, and life-threatening, health
risks posed by asbestos fibres. The value pursued is both vital and important in the highest degree.
The remaining question, then, is whether there is an alternative measure that would achieve the same
end and that is less restrictive of trade than a prohibition.
173. Canada asserts that "controlled use" represents a "reasonably available" measure that would
serve the same end. The issue is, thus, whether France could reasonably be expected to employ
"controlled use" practices to achieve its chosen level of health protection – a halt in the spread of
asbestos-related health risks.
174. In our view, France could not reasonably be expected to employ any alternative measure if
that measure would involve a continuation of the very risk that the Decree seeks to "halt". Such an
alternative measure would, in effect, prevent France from achieving its chosen level of health
protection. On the basis of the scientific evidence before it, the Panel found that, in general, the
efficacy of "controlled use" remains to be demonstrated.

168 Moreover, even in cases where
"controlled use" practices are applied "with greater certainty", the scientific evidence suggests that the
level of exposure can, in some circumstances, still be high enough for there to be a "significant
residual risk of developing asbestos-related diseases."

169 The Panel found too that the efficacy of
"controlled use" is particularly doubtful for the building industry and for DIY enthusiasts, which are
the most important users of cement-based products containing chrysotile asbestos.

170 Given these
factual findings by the Panel, we believe that "controlled use" would not allow France to achieve its
chosen level of health protection by halting the spread of asbestos-related health risks. "Controlled
use" would, thus, not be an alternative measure that would achieve the end sought by France.
175. For these reasons, we uphold the Panel's finding, in paragraph 8.222 of the Panel Report, that
the European Communities has demonstrated a prima facie case that there was no "reasonably
available alternative" to the prohibition inherent in the Decree. As a result, we also uphold the Panel's
conclusion, in paragraph 8.223 of the Panel Report, that the Decree is "necessary to protect human …
life or health" within the meaning of Article XX(b) of the GATT 1994.

166Appellate Body Report, Korea – Beef, supra, footnote 49, paras. 166 and 163.
167Ibid., para. 162.
168Panel Report, para. 8.209.
169Ibid., paras. 8.209 and 8.211.
170Ibid., paras. 8.213 and 8.214.

C. Article 11 of the DSU
176. As part of its argument that the Panel erred in finding that the measure is justified under
Article XX(b) of the GATT 1994, Canada also asserts that the Panel failed to make an objective
assessment of the matter, as required by Article 11 of the DSU. According to Canada, the
requirement imposed on panels by Article 11 to make an objective assessment of the matter implies
"that scientific data must be assessed in accordance with the principle of the balance of
probabilities."

171 In particular, Canada asserts that, where the evidence is divergent or contradictory,
the "principle of the preponderance of evidence" implies that a panel must take a position as to the
respective weight of the evidence.

172 Canada also contends that the Panel failed to assess the facts
objectively because the Panel accepted "the opinions of experts on the controlled use of chrysotile,
when those experts had no controlled-use expertise."

173
177. These arguments by Canada on the "balance of probabilities" and the "preponderance of
evidence" concern the credibility and weight that the Panel ascribed to different elements of
evidence.

174 In essence, Canada argues that the Panel has not taken sufficient account of certain
evidence and that the Panel has placed too much weight on certain other evidence. Thus, Canada is
challenging the Panel's exercise of discretion in assessing and weighing the evidence. As we have
already noted, "[w]e cannot second-guess the Panel in appreciating either the evidentiary value of …
studies or the consequences, if any, of alleged defects in [the evidence]".

175 And, as we have already
said, in this case, the Panel's appreciation of the evidence remained well within the bounds of its
discretion as the trier of facts.
178. In addition, in the context of the SPS Agreement, we have said previously, in European
Communities – Hormones, that "responsible and representative governments may act in good faith on
the basis of what, at a given time, may be a divergent opinion coming from qualified and respected
sources."

176 (emphasis added) In justifying a measure under Article XX(b) of the GATT 1994, a
Member may also rely, in good faith, on scientific sources which, at that time, may represent a
divergent, but qualified and respected, opinion. A Member is not obliged, in setting health policy,
automatically to follow what, at a given time, may constitute a majority scientific opinion. Therefore,

172Ibid.
173Ibid., para. 209.
174Ibid., para. 204.
175Appellate Body Report, Korea – Alcoholic Beverages , supra, footnote 58, para. 161. See, supra,
para. 160.
176Supra, footnote 48, para. 194.

a panel need not, necessarily, reach a decision under Article XX(b) of the GATT 1994 on the basis of
the "preponderant" weight of the evidence.
179. With regard to Canada's argument that certain of the experts lacked expertise in "controlled
use", we note that, from the beginning of the process for the selection of experts, the Panel made clear
that it wished to consult experts on the "effectiveness of the controlled use of chrysotile."

177 T h e
selection of the experts was the subject of a rigorous procedure which involved the consultation of
five institutions with experience in this field and also of the parties.

178 At no stage did Canada object
to the selection of any of the experts, nor indicate that any of them was unqualified to deal with issues
relating to "controlled use".
179 We also note that the experts were instructed by the Panel to answer
only those questions that fell within their area of expertise.
180 As Canada indicates, several experts
indicated that particular questions, or parts of questions, posed to them went beyond their area of
expertise.

181
180. In these circumstances, we have serious difficulty accepting that the Panel failed to make an
objective assessment by relying on experts who had no expertise. The Panel was entitled to assume
that the experts possessed the necessary expertise to answer the questions, or parts of questions, they
chose to answer. In other words, it was not incumbent on the Panel expressly to confirm, with respect
to every opinion expressed by each expert, that the expert possessed the necessary expertise to give
that particular opinion. If Canada thought that one of the experts did not possess the expertise
necessary to answer certain questions posed to him, Canada should have raised those concerns, either
with the expert, at the meeting the Panel held with the parties and the experts on 17 January 2000, or
with the Panel at some other time. We observe, finally, that, where an expert declined to answer a
specific question, or part of a question, because of a professed lack of expertise, the Panel had no
opinion from that expert on which to rely.
181. For these reasons, we decline Canada's appeal on Article 11 of the DSU.

177Panel Report, para. 5.1.
178Ibid., para. 5.20.
179Ibid.
180Ibid., para. 5.22.
181Canada's appellant's submission, para. 211, foot note 219, referring to Panel Report, paras. 5. 335,
5.345, 5.346, 5.353, 5.363, 5.364, 5.370, 5.371, and 5.374, and to Annex VI of the Panel Report, para. 222.

VIII. Article XXIII:1(b) of the GATT 1994
182. Before the Panel, Canada claimed, under Article XXIII:1(b) of the GATT 1994, that the
application of the measure at issue nullified or impaired benefits accruing to Canada. The European
Communities raised preliminary objections, arguing on two grounds that the measure falls outside the
scope of application of Article XXIII:1(b). First, the European Communities contended that
Article XXIII:1(b) only applies to measures which do not otherwise fall under other provisions of the
GATT 1994.

182 Second, the European Communities argued that, while it may be possible to have
"legitimate expectations" in connection with a purely "commercial" measure, it is not possible to
claim "legitimate expectations" with respect to a measure taken to protect human life or health, which
can be justified under Article XX(b) of the GATT 1994. Such measures are, the European
Communities asserted, excluded from the scope of Article XXIII:1(b).

183
183. Before examining the substance of Canada's claim under Article XXIII:1(b) of the
GATT 1994, the Panel first considered, and rejected, both of these preliminary objections raised by
the European Communities, and found, as a consequence, that Canada could invoke
Article XXIII:1(b) in respect of the measure.

184 The European Communities appeals the Panel's
findings and conclusions relating to the two preliminary objections.
184. Before considering this aspect of the appeal, we note that the Panel went on to examine the
substance of Canada's claim under Article XXIII:1(b) and concluded that Canada had not established
"the existence of nullification or impairment of a benefit within the meaning of Article XXIII:1(b) of
the GATT 1994 as a result of the application of the measure".

185 We note also that this ultimate
conclusion by the Panel has not been appealed by eith er party. Accordingly, we address only the two
narrow issues that have been appealed by the European Communities, and we will not address any
other aspects of the Panel's findings under Article XXIII:1(b) of the GATT 1994.
185. This appeal is our first occasion to examine Article XXIII:1(b) of the GATT 1994. For this
reason, before turning to the appeal by the European Communities, it seems to us useful to make
certain preliminary observations about the relationship between Articles XXIII:1(a) and XXIII:1(b) of
the GATT 1994. Article XXIII:1(a) sets forth a cause of action for a claim that a Member has failed
to carry out one or more of its obligations under the GATT 1994. A claim under Article XX III:1(a),
therefore, lies when a Member is alleged to have acted inconsistently with a provision of the

182Panel Report, para. 8.255.
183Ibid., para. 8.257.
184Ibid., paras. 8.265 and 8.274.
185Ibid., para. 8.304.

GATT 1994. Article XXIII:1(b) sets forth a separate cause of action for a claim that, through the
application of a measure, a Member has "nullified or impaired" "benefits" accruing to another
Member, "whether or not that measure conflicts with the provisions" of the GATT 1994. Thus, it is
not necessary, under Article XXIII:1(b), to establish that the measure involved is inconsistent with, or
violates, a provision of the GATT 1994. Cases under Article XXIII:1(b) are, for this reason,
sometimes described as "non-violation" cases; we note, though, that the word "non-violation" does
not appear in this provision. The purpose of this rather unusual remedy was described by the panel in
European Economic Community - Payments and Subsidies Paid to Processors and Producers of
Oilseeds and Related Animal-Feed Proteins ("EEC – Oilseeds") in the following terms:
The idea underlying [the provisions of Article XXIII:1(b)] is that the
improved competitive opportunities that can legitimately be expected
from a tariff concession can be frustrated not only by measures
proscribed by the General Agreement but also by measures consistent
with that Agreement . In order to encourage contracting parties to
make tariff concessions they must therefore be given a right of redress
when a reciprocal concession is impaired by another contracting party
as a result of the application of any measure, whether or not it
conflicts with the General Agreement.

186 (emphasis added)
186. Like the panel in Japan – Measures Affecting Consumer Photographic Film and Paper
("Japan – Film "), we consider that the remedy in Article XXIII:1(b) "should be approached with
caution and should remain an exceptional remedy".
187 That panel stated:

186Adopted 25 January 1990, BISD 37S/86, para. 144.
187Adopted 22 April 1998, WT/DS44/R, para. 10.37.

Although the non-violation remedy is an important and accepted tool
of WTO/GATT dispute settlement and has been "on the books" for
almost 50 years, we note that there have only been eight cases in
which panels or working parties have substantively considered
Article XXIII:1(b) claims. This suggests that both the GATT
contracting parties and WTO Members have approached this remedy
with caution and, indeed, have treated it as an exceptional instrument
of dispute settlement. We note in this regard that both the European
Communities and the United States in the EEC – Oilseeds case, and
the two parties in this case, have confirmed that the non-violation
nullification or impairment remedy should be approached with
caution and treated as an exceptional concept . The reason for this
caution is straightforward. Members negotiate the rules that they
agree to follow and only exceptionally would expect to be challenged
for actions not in contravention of those rules.

188 (emphasis added)
187. Against this background, we turn now to the European Communities' argument that
Article XXIII:1(b) does not apply to measures that fall within the scope of application of other
provisions of the GATT 1994. The text of Article XXIII:1(b) stipulates that a claim under that
provision arises when a "benefit" is being "nullified or impaired" through the "application … of any
measure, whether or not it conflicts with the provisions of this Agreement
 ". (emphasis added) The
wording of the provision, therefore, clearly states that a claim may succeed, under Article XX III:1(b),
even if the measure "conflicts" with some substantive provisions of the GATT 1994 . It follows that a
measure may, at one and the same time , be inconsistent with, or in breach of, a provision of the
GATT 1994 and, nonetheless, give rise to a cause of action under Article XXIII:1(b). Of course, if a
measure "conflicts" with a provision of the GATT 1994, that measure must actually fall within the

188Supra, footnote 187, para. 10.36. Claims under Ar ticle XXIII:1(b) have b een considered in the
following reports: Working Party Report, Australia – Ammonium Sulphate , supra, footnote 58; Panel Report,
Germany – Sardines , supra, footnote 58; Panel Report, Uruguayan Recourse to Article XXIII , adopted
16 November 1962, BISD 11S/95; Panel Report, Spain – Soyabean, supra, footnote 58; Panel Report, European
Community – Tariff Treatment on Imports of Citrus Products from Certain Countries in the Mediterranean Region
("EC – Citrus Products"), L/5776, 7 February 1985, unadopted; Panel Report, European Economic Community –
Production Aids Granted on Canned Peaches, Canned Pears, Canned Fruit Cocktail and Dried Grapes ("EEC –
Canned Fruit"), L/5778, 20 February 1985, unadopted; Panel Report, Japan – Trade in Semi-Conductors, adopted
4 May 1988, BISD 35S/116; Panel Report, United States – Trade Measures Affecting Nicaragua , L/6053, 13
October 1986, unadopted; Panel Report, EEC – Oilseeds , supra, footnote 186; Panel Report, United States –
Restrictions on the Importation of Sugar and Sugar-Containing Products Applied under the 1955 Waiver and
under the Headnote to the Schedule of Tariff Concessions , adopted 7 November 1990, BISD 37S/228; Panel
Report, Japan – Film, supra, footnote 187; Panel Report, Korea – Measures Affecting Government Procurement ,
WT/DS163/R, adopted 19 June 2000. We note that claims under Article XXIII:1(b) of the GATT 1947 were also
examined in the Panel Report, European Economic Community – Follow-up on the Panel Report, Payments and
Subsidies Paid to Processors and Producers of Oilseeds and Related Animal-Feed Proteins ("EEC – Oilseeds II"),
31 March 1992, BISD 39S/91, unadopted.
Including EEC – Oilseeds II , and the present dispute, there have, therefore, been 14 cases in which a
claim under Article XXIII:1(b) has been considered by working parties, panels, and, now, the Appellate Body.
In six of these cases, the claim under Article XXIII:1(b) was successful and, on three of these occasions, the
report was adopted. The successful claims were made in: Australia – Ammonium Sulphate (adopted
3 April 1950), Germany – Sardines (adopted 31 October 1952), EC – Citrus Products (unadopted), EEC –
Canned Fruit (unadopted), EEC – Oilseeds (adopted 25 January 1990) and EEC – Oilseeds II (unadopted).

scope of application of that provision of the GATT 1994. We agree with the Panel that this reading of
Article XXIII:1(b) is consistent with the panel reports in Japan – Film and EEC – Oilseeds , which
both support the view that Article XXIII:1(b) applies to measures which simultaneously fall within
the scope of application of other provisions of the GATT 1994.

189 Accordingly, we decline the
European Communities' first ground of appeal under Article XXIII:1(b) of the GATT 1994.
188. The European Communities also contends that the Panel erred in finding that
Article XXIII:1(b) applies to measures which pursue health, rather than commercial, objectives and
which can, therefore, be justified under Article XX(b) of the GATT 1994. Once again, we look to the
text of Article XXIII:1(b), which provides that "the application by another Member of any measure"
may give rise to a cause of action under that provision. The use of the word "any" suggests that
measures of all types may give rise to such a cause of action. The text does not distinguish between,
or exclude, certain types of measure. Clearly, therefore, the text of Article XXIII:1(b) contradicts the
European Communities' argument that certain types of measure, namely, those with health objectives,
are excluded from the scope of application of Article XXIII:1(b).
189. In any event, an attempt to draw the dist inction suggested by the European Communities
between so-called health and commercial measures would be very difficult in practice. By definition,
measures which affect trade in goods, and which are subject to the disciplines of the GATT 1994,
have a commercial impact. At the same time, the health objectives of many measures may be
attainable only by means of commercial regulation. Thus, in practice, clear distinctions between
health and commercial measures may be very difficult to establish. Nor do we see merit in the
argument that, previously, only "commercial" measures have been the subject of Article XXIII:1(b)
claims, as that does not establish that a claim cannot be made under Article XXIII:1(b) regarding a
"non-commercial" measure.
190. An important aspect of the European Communities' argument is that a Member cannot have
reasonable expectations of continued market access for products which are shown to pose a serious
risk to human life or health. However, the paragraphs of the Panel Report appealed by the European
Communities involve exclusively the Panel's findings on the threshold issues of the scope of
application of Article XXIII:1(b). This particular argument of the European Communities, important
as it is, simply does not relate to those threshold issues. Rather, the European Communities' argument
relates to the substance of a claim that has been determined to fall within the scope of application of
Article XXIII:1(b) and, in particular, concerns the issue whether a "benefit" has been "nullified or
impaired" by a measure restricting market access for products posing a health risk. Here, we

189See Panel Report, para. 8.263, which refers to the Panel Report in Japan – Film , supra,

emphasize that the European Communities does not appeal the Panel's findings relating to the
"nullification or impairment" of a "benefit" through the frustration of reasonable expectations by
application of the measure at issue. We do not, therefore, find it necessary to examine the European
Communities' argument relating to reasonable expectations.
191. For these reasons, we dismiss the European Communities' appeal under Article XXIII:1(b) of
the GATT 1994 and uphold the Panel's finding that Article XXIII:1(b) applies to measures which fall
within the scope of application of other provisions of the GATT 1994 and which pursue health
objectives.
IX. Findings and Conclusions
192. For the reasons set out in this Report, the Appellate Body:
(a) reverses the Panel's finding, in paragraph 8.72(a) of the Panel Report, that the
TBT Agreement "does not apply to the part of the Decree relating to the ban on
imports of asbestos and asbestos-containing products because that part does not
constitute a 'technical regulation' with in the meaning of Annex 1.1 to the
TBT Agreement", and finds that the measure, viewed as an integrated whole, does
constitute a "technical regulation" under the TBT Agreement;
(b) reverses the Panel's findings, in paragraphs 8.132 and 8.149 of the Panel Report, that
"it is not appropriate" to take into consideration the health risks associated with
chrysotile asbestos fibres in examining the "likeness", under Article III:4 of the
GATT 1994, of those fibres and PCG fibres, and, also, in examining the "likeness",
under that provision, of cement-based products containing chrysotile asbestos fibres
or PCG fibres;
(c) reverses the Panel's finding, in paragraph 8.144 of the Panel Report, that chrysotile
asbestos fibres and PCG fibres are "like products" under Article III:4 of the
GATT 1994; and finds that Canada has not satisfied its burden of proving that these
fibres are "like products" under that provision;
(d) reverses the Panel's finding, in paragraph 8.150 of the Panel Report, that cement-
based products containing chrysotile asbestos fibres and cement-based products
containing PCG fibres are "like products" under Article III:4 of the GATT 1994; and
finds that Canada has not satisfied its burden of proving that these cement-based
products are "like products" under Article III:4 of the GATT 1994;

(e) reverses, in consequence, the Panel's finding, in paragraph 8.158 of the Panel Report,
that the measure is inconsistent with Article III:4 of the GATT 1994;
(f) upholds the Panel's finding, in paragraphs 8.194, 8.222 and 8.223 of the Panel Report,
that the measure at issue is "necessary to protect human … life or health", within the
meaning of Article XX(b) of the GATT 1994; and, finds that the Panel acted
consistently with Article 11 of the DSU in reaching this conclusion;
(g) upholds the Panel's finding, in paragraphs 8.265 and 8.274 of the Panel Report, that
the measure may give rise to a cause of action under Article XXIII:1(b) of the
GATT 1994.
193. It follows from our findings that Canada has not succeeded in establishing that the measure at
issue is inconsistent with the obligations of the European Communities under the covered agreements
and, accordingly, we do not make any recommendations to the DSB under Article 19.1 of the DSU.
Signed in the original at Geneva this 16th day of February 2001 by:
Florentino P. Feliciano
Presiding Member
_________________________ _________________________
James Bacchus Claus-Dieter Ehlermann
Member Member