Document: WT/DS291/R/Add.2 WT/DS292/R/Add.2 WT/DS293/R/Add.2 Page D-1 ANNEX D REPLIES BY THE PARTIES TO QUESTIONS POSED BY THE PANEL IN THE CONTEXT OF THE FIRST SUBSTANTIVE MEETING Contents Page Annex D-1 Replies by the United States to questions posed by the Panel in the context of the first substantive meeting
Document codes: WT/DS291/R/Add.2; WT/DS292/R/Add.2; WT/DS293/R/Add.2
Complainant: Argentina
Respondent: EU
Third parties: Australia, Brazil, Canada, Chile, China, Taiwan, Colombia, El Salvador, Honduras, Mexico, New Zealand, Norway, Paraguay, Peru, Thailand, Uruguay, U.S.
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, 7, 8, 10.1, Annex B, Annex C  Sanitary and Phytosanitary Measures (SPS)Art. III:4, X:1, X:3(a), XI:1  GATT 1994Art. 2.1, 2.2, 2.8, 2.9, 2.11, 5.1, 5.2, 5.6, 5.8, 12  Technical Barriers to Trade (TBT)Art. 4.2  AgricultureArt. I:1  GATT 1994

ANNEX D

REPLIES BY THE PARTIES TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE FIRST SUBSTANTIVE MEETING

Contents Page
Annex D-1 Replies by the United States to questions posed by the Panel in the
context of the first substantive meeting
D-2
Annex D-2 Replies by Canada to questions posed by the Panel in the context of
the first substantive meeting
D-37
Annex D-3 Replies by Argentina to questions posed by the Panel in the context
of the first substantive meeting
D-72
Annex D-4 Replies by the European Communities to questions posed by the
Panel in the context of the first substantive meeting
D-88

ANNEX D-1

REPLIES BY THE UNITED STATES TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE FIRST SUBSTANTIVE MEETING

For all parties

1. Are the parties of the view that the Panel must base its findings and conclusions on the
facts as they existed on the date of establishment of this Panel?

1. Under the Understanding on Rules and Procedures Go verning the Settlement of Disputes
("DSU"), a panel's terms of reference are to "e xamine ... the matter referred to the DSB by [the
complaining Member] in" the panel request. Accordi ngly, the United States submits that the measure
to be examined by the Panel is the measure as it existed at a time no later than the date of the
establishment of the panel. With regard to facts concerning events occurring after the date of panel
establishment, the United States understands that panels have the discretion to consider such facts if to
do so it would assist the panel in making "an obj ective assessment of the matter before it," for
example, in order to understand better the measure as it existed at the time of panel establishment.
The Panel, however, is not authorized to make fi ndings with respect to measures, or any alleged
changes to measures, in existence after the date of the establishment of the panel.

2. Annex A of the SPS Agreement contains two apparently alternative definitions of risk
assessment. Which of these definitions would be a ppropriate to evaluate the purported risks of
biotech products? Or would both definitions be appropriate?

2. Both definitions could be appropriate, depending on the type of risk addressed by the
particular SPS measure. Annex A defines "risk assessment" as follows:

Risk assessment - The evaluation of the like lihood of entry, estab lishment or spread
of a pest or disease within the territory of an importing Member according to the
sanitary or phytosanitary measures which mi ght be applied, and of the associated
potential biological and economic consequences; or the evaluation of the potential for
adverse effects on human or animal health arising from the presence of additives,
contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs.
The first clause covers SPS measures addressed to risks arising from the "entry, establishment or
spread of a pest or disease". The second clause covers SPS measur es addressed to risk arising from
"the presence of additives, contaminants, toxins or disease-causing organisms in food, beverages or
feedstuffs."

3. Do the parties consider that food allergens can be considered to be "toxins" or
"disease-causing organisms" in a food, beverage or feedstuff?

3. The WTO Agreement is to be interpreted "in accordance with the ordinary meaning to be
given to the terms of the treaty in their context and in the light of its object and purpose."
1 A "toxin"
is generally defined as "a poison." E.g., The Compact Oxford English Dictionary , Oxford University
Press, 1971, 24th Printing, page 2224. A "poison," is in turn defined as "any substance which, when
introduced into or absorbed by a living or ganism, destroys life or injures health, …." The Compact

1 Vienna Convention on the Law of Treaties, Article 31.1.

Oxford English Dictionary , page 3367. Food allergens clearly fall within the description of a
substance that "destroys life or injures health."

4. In this regard, the United States disagrees with the EC's suggestion that the SPS term "toxin"
should be limited to naturally occurring toxicants that are not intentionally added to food, based on
Codex Standard 193. As a preliminary matter, we no te that Codex definitions , while informative, do
not determine the meaning or scope of the terms under the SPS agreement. Rather, as noted above,
these terms are to be interpreted in accordance wi th their "ordinary meaning." Moreover, Codex
Standard 193 does not purport to provide a comp rehensive definition of "toxin," but merely
establishes the types of toxins included in the scope of the Standard.

4. Which (if any) are the other binding intern ational law instruments which are relevant to
this case? Could the parties please identify the specific provisions which they believe to be of
relevance, and explain specifically how these provisions could be applied in this case?

5. There are no binding international law instrument s of relevance to this dispute, other than the
WTO Agreement.

For all complaining parties

5. With reference to paras. 285 to 297 of the EC first written submission, how do the
complaining parties account for the fact th at the companies withdrawing notifications
apparently did not cite undue delays in the pr ocessing of notifications as reasons for the
withdrawal (except in the case of the notifi cation concerning Monsanto Roundup Ready oilseed
rape (GT73))?

6. The United States understands that companies did not cite undue delays in all of their
withdrawal letters for the following reasons. First, there was no need to explicitly mention the delays
– all applicants plainly sought EC approvals at the time that the applications were submitted. But
over time, as the delays mounted, in some cases the commercial incentive for seeking approval
changed. For example, in some cases, a company sought approval for both an initial version of a
product and then for an improved, later-developed product. Once the moratorium had caused the
application for the initial version to stall in the a pproval process, in light of the application for the
later-developed product, the company no longer had a reason to pursue the application for the earlier
product. Second, the companies have a strong in centive to maintain cordial relations with EC
regulators, and saw no advantage of complaining to EC regulators about the length of the delays
resulting from the moratorium.

6. With reference to pp. 27-36 of the EC first written submission, could the complaining
parties please indicate whether the European Communities' description of their own regulatory
systems is accurate?

The EC's Characterization is Inaccurate and Misleading

7. The EC has not accurately d escribed the US regulatory sy stems in pages 27-36. As a
preliminary matter, the United States notes that this dispute is not about the US regulatory system. It
is about how the EC has applied its system in a manner that violates a number of provisions of the
SPS Agreement. The EC's description of the US system is not relevant to this dispute.

8. The United States notes that the only description of the US regulatory system in pages 27-36
of the EC's submission occurs in paragraphs 75 an d 86, and this characterization is inaccurate. The

US system is most certainly not "laissez-faire." To the extent that this characterization is intended to
imply that biotech products on the US market have not undergone a thorough case-by-case risk
assessment of the product in question, it is also misl eading. All biotech products in the United States,
including all biotech foods, have successfully completed a safety evaluation by the relevant competent
authorities.

9. Furthermore, the EC presents only one asp ect of the overall US regulatory system.
Regulation of biotech products in the United States is divided between several regulatory agencies–
primarily the US Department of Agriculture (USDA), the US Environmental Protection Agency
(EPA), and the Food and Drug Administration (FDA )--and in general, produc ts are reviewed by
multiple agencies. Focusing on only one aspect of that system is inherently misleading.

FDA's Regulatory Role

10. The discussion in paragraph 75 omits any descr iption of the oversight provided by USDA and
EPA on environmental and food safety issues. Ra ther, the description focuses only on the role of
FDA and even then is misleading in describing that role. Foods from bio-engineered plants must meet
the same strict safety and regulator y standards in the United States as do all other foods. Similarly,
food additives present in biotech foods are subject to the same stringent safety standard and pre-
market approval regime that applies to food additives in processed foods.

11. Additionally, all the biotech foods on the ma rket in the United States have gone through a
food safety evaluation by FDA, and there is no eviden ce, and indeed no credible allegations, that any
such foods are any less safe than their counterpart non-biotech foods.

12. Contrary to the EC's characterization of the FDA policy statement of 1992 in paragraph 75 as
establishing that food from bio-engineered varie ties "was generally considered to be as safe as
conventional food," FDA said the following: "In re gulating foods and their byproducts derived from
new plant varieties, FDA intends to use its food a dditive authority to the extent necessary to protect
public health. Specifically, consistent with the stat utory definition of "food additive" and the overall
design of FDA's current food safety regulatory pr ogram, FDA will use section 409 of the act [the
Federal Food, Drug and Cosmetic Act] to requi re food additive petitions in cases where safety
questions exist sufficient to warrant formal prem arket review by FDA to ensure public health
protection." 57 F.R. 22990.

13. FDA did state that it did not "anticipate that transferred genetic material would itself be
subject to food additive regulation," noting that "nuc leic acids are present in the cells of every living
organism, including every plant and animal used for food by humans and animals, and do not raise a
safety concern as a component of food." (That is, even though the DNA is added to food, it does not
pose a risk warranting a premarket approval measure. ) FDA also provided descriptions of the kinds of
substances that would, and that would not, likely re quire premarket approval as a food additive. The
policy statement also pointed out that "producers remain legally responsible for satisfying section
402(a)(1) of the act [which prohibits added substan ces in food at a level that may be injurious to
health, including substances present unexpectedly or in advertently in food], and they will continue to
be held accountable by FDA through application of the agency's enforcement powers."

USDA's Regulatory Role

14. With respect to paragraph 86, to the extent the EC's statement that the United States is
discussing the "introduction of appropriate monitoring policies" implies that there is no monitoring of
biotech products in the United States, that charact erization is incorrect and misleading. The United

States currently monitors transgenic crops after commercialization and has done so since the mid-
1990s.

15. The EC cites in a footnote to paragraph 86 a Federal Register notice by USDA's Animal and
Plant Health Inspection Service (APHIS). USDA has the authority to regulate the importation,
interstate movement, and release into the environm ent of plant pests and other articles to prevent
direct or indirect injury, disease, or damage to plants or plant products , including genetically
engineered organisms. All field testing, planting, and/or release of such genetically engineered
organisms in an open environment is subject to authorization by USDA. For plants, that authorization
means that the release does not pose any danger of creating a plant disease or pest problem. USDA
reviews information from the field tests and other in formation gathered from the scientific literature
and agricultural experience to determine whether a new plant variety poses a plant pest risk and
whether it is as safe to grow as any other traditionally bred plant variety. This decision is based on the
finding that the new plant variety:

 (1) exhibits no plant pathogenic properties;
 (2) is no more likely to become a weed than the non-engineered plant;
 (3) is not likely to increase the weediness of any other plant with which it is sexually
compatible;
 (4) will not cause damage to pro cessed agricultural commodities; and
 (5) is not likely to harm other organi sms that are beneficial to agriculture.

16. As part of its review, USDA also considers a broad range of environmental issues. When
considering such possible impacts, USDA's experti se overlaps with that of other federal agencies,
namely EPA and FDA.

17. As explained in the Federal Register noti ce, USDA is in the process of reviewing its
regulations under the authority of the Plant Protec tion Act of 2000. One area USDA is reviewing is
its regulatory role in post-commercialization monito ring of biotech organisms. USDA is considering
changes that would increase the flexibility of its biotechnology regulatory system to respond to new
types of products. Possible examples of such pr oducts are biotech trees and other plants that are
likely to establish and persist outside of managed envi ronments, or crops that have been engineered to
make products that are not intended for food or feed use.

18. USDA has removed certain biotech organisms from regulation and, hence, there are no
regulatory requirements for monitoring those organism s based merely on the fact that a variety is
biotech. Currently, for all products that USDA has deregulated, USDA has determined that the
biotech varieties do not pose a plant pest risk and ar e not expected to have a significant impact on the
environment. In other words, USDA has found that unconfined release of these products is just as
safe for purposes of "plant pest risk" as that of thei r non-biotech counterparts. However, if evidence
became available that a deregulated product actually posed a plant pest risk, USDA could bring such a
product back under USDA's oversight. Furthermore, if USDA determined that monitoring of a
product was required to mitigate a plant pest risk, it could refuse to deregulate the product and allow
commercialization only under USDA oversight with conditions for monitoring.

EPA's Regulatory Role

19. EPA is responsible for regulating the distribution, sale, use and testing of pesticides, including
those genetically engineered into plants or other organisms, in order to protect humans and the
environment. EPA must issue a registration for a plant-pesticide before the plant-pesticide can be
sold or distributed. In evaluating whether an y pesticide may be registered, EPA conducts a

comprehensive assessment of all potential risk s posed to humans and the environment by the
pesticide, including potential hazards to non-target organisms, potential for ground- or surface-water
contamination, worker impacts, and any potential impacts from consumer or residential exposures.
EPA also evaluates the safety of any pesticide residues in or on food crops, establishing the maximum
safe levels that may be present. In conducting this review, EPA evaluates all aspects of human dietary
exposure to those pesticide residues, including, for example, the potential contribution from other
sources of exposure and the potential for varying sus ceptibilities of different sub-populations, such as
infants and children.

7. In the light of the European Communities' answer to Question 1 above in which it
touched upon the concept of "mootness", do the co mplaining parties consider that this concept
is of relevance in the present case?

20. The United States submits that the concept of "mootness" that the EC has articulated is not
 of
relevance to this dispute. Panels have dec lined to issue findings on measures that expired before the
establishment of the panel (and before the fixing of the panel's terms of reference). However, the
United States is not aware of any panel that has done so for a measure that was in force when its terms
of reference were set. To the contrary, past GATT and WTO panels have examined and made
findings on measures even if they were discontinue d during the panel's work. As the panel wrote in
the India – Autos dispute:2

A WTO panel is generally competent to cons ider measures in existence at the time of
its establishment. This power is not necessarily adversely affected simply because a
measure under review may have been s ubsequently removed or rendered less
effective. Panels in the past have ex amined discontinued measures where there was
no agreement of the parties to discontinue the proceedings.{FN}
"[Footnote] See for instance the Panel Report on US – Wool Shirts
and Blouses , WT/DS33/R, adopted on 23 May 1997, as upheld by
the Appellate Body Report, para. 6.2 (DSR 1997:I, 343), where the
measure was withdrawn following the issuance of the interim report,
and the panel nonetheless issued a complete report. See also the
Panel Report on Indonesia – Autos where the panel proceeded with
its examination of the claims despite a notification in the course of
the proceedings by the respondent that the programme in issue had
expired: "( …) In any event, taking into account our terms of
reference, and noting that any re vocation of a challenged measure
could be relevant to the implementation stage of the dispute
settlement process, we consider that is appropriate for us to make
findings in respect of the National Car Programme. In this
connection, we note that in previous GATT/WTO cases, where a
measure included in the terms of reference was otherwise terminated
or amended after the commencement of the panel proceedings, panels
have nevertheless made findings in respect of such a measures"
(WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R, para. 14.9,
DSR 1998:VI, 2201). As mentioned by that panel, there have also
been such instances of continued proceedings despite expiry or
partial disappearance of the measures at issue under the GATT: see
for instance EEC –Apples I (Chile) (BISD 27S/98) paras 2.2 and 2.4;

2 India – Measures Affecting the Automotive Sector, WT/DS146/R, WT/DS175/R, para. 7.26.

United States – Prohibition of Impor ts of Tuna and Tuna Products
from Canada (BISD 29S/91), paras. 2.8, 4.2 and 4.3, where despite
some evolution in the measures in the course of the proceedings and
encouragement from the Panel to r each a mutually agreed solution,
there was no agreement among the parties that such a solution had
been found and the panel issued a complete report.
21. Thus, consistent with the requirements of the DSU, the practice has been for panels to make
findings and conclusions with respect to the measures that the complainant identified in its request for
establishment of a panel.

For all parties

22. How many products have been approved under the simplified procedure for foods
produced from but not containing GMOs since October 1998?

22. As an initial matter, the United States notes th at the simplified procedure is not an "approval"
as that term is used in the EC legislation for the regular, non-simplified procedure. In particular, the
key characteristic of the simplified procedure is that there is no approval at the Community level, but
rather that there only needs to be a notificati on by a member State to the Commission (Article 5,
258/97), and no further decision by the Commission is required for the product to be legally on the
market.
23. According to the Commission's April 15 2004 Memo "Qs&As on the regulation of GMOs in
the EU", foods derived from a total of 13 traits have been notified a ltogether, six of which have been
notified since October 1998:
– RR Soybean and Bt176 Maize on market prior to entry into force of 258/97
– MS1/RF2, MS1/RF1, GT73, MON810, T25, Bt11 all notified before October 1998
– (1) MON809, (2) FalconGS40/90, (3) LiberatorL62, (4) MS8/RF3, (5) Cotton1445,
(6) Cotton531 notified since 1998
– pRF69/pRF93 is not a plant trait but Riboflavin in Bacillus Subtilis
23. The European Communities states at paras. 26-28 of its first written submission that
none of the current biotech gene transfer me thods are able to precisely control where the
foreign gene will insert into the recipient cell's genome, or whether that insertion will be stable,
and further describes the screening for the desire d traits. How do the points described here
compare with the results of conventional selective breeding techniques?

24. With bioengineering, developers can introduce into a plant the specific DNA segments that
encode the desired traits. However, the techniqu es of bioengineering do not generally control where
the introduced DNA segment will insert in the reci pient cell's genome. Depending on where in the
recipient cell's genome the introduced DNA inserts, it can potentially cause undesirable characteristics
in the plant (referred to as "insertional mutagenesis" ). In order to ensure that the plants and foods
have only the desired traits, devel opers conduct extensive field tests of new plant varieties. Because
of the potential for undesirable traits resulting from the site of DNA insertion, regulatory authorities in
both the EC and the United States typically ev aluate each plant line derived from a separate
bioengineering experiment, even when the safety of the foreign gene itself is not at issue.

25. In contrast, the techniques of conventional cr oss hybridization do not provide developers with
control over the specific genes and traits from th e two parents that will end up in the progeny.
Although insertional mutagenesis would not be expected to occur commonly in conventional
breeding, any such occurrences would likely be u nnoticed given the much larger percentage of
progeny whose undesirable characteristics result fro m an inopportune combination of genes from the
two parents. Thus, with conventional breeding, deve lopers also have to do extensive field testing of
new varieties to ensure that the new plants have the desired traits and do not have undesirable
properties.

26. Conventional breeding, particularly when usi ng a wild variety as a parent in a conventional
cross hybridization, can also result in genetic tr anslocations and disruptions analogous to what is
described in the EC submission in paras 26-28. Many plants contain mobile genetic elements that can
"jump" around the genome during and after conventional selective breeding techniques.

27. There is little dispute that bioengineering enab les much greater control over breeding than can
be exerted through conventional methods. There is also little dispute that, irrespective of the breeding
method used, developers can inadvertently genera te plant varieties that can pose food safety or
environmental risks. As the EC itself notes, th e nature of these risks will depend on the individual
nature of the plant, the genetic modification (irrespective of the method by which the genetic
modification was introduced), and the environment. There is no basis to conclude that the use of
bioengineering in developing new plant varieties crea tes new types of risks that across-the-board are
inherently difficult to assess.

24. How does the potential for allergenicity to be introduced through biotech foods (e.g., as
described by the European Communi ties at para. 45 of its first written submission) compare
with the potential for its introduction through non-GM novel foods?

28. With bioengineering, one can introduce a much gr eater range of new proteins into a particular
food plant than can be introduced through conventiona l breeding. Because virtually all allergens are
proteins (although, we would point out, few protei ns actually are allergens) it is appropriate to
evaluate the potential allergenicity of all new pr oteins introduced into a food plant. With
conventional breeding, if one is crossing two variet ies that are both commonly used for food, it is
unlikely that one would be introducing a new protein into the plant or its food. On the other hand,
when doing wide crosses with wild relatives that ar e not commonly used for food, it is quite possible
that new proteins will be introduced that have no t been in foods from that plant variety before.
However, because developers cannot identify the ne w proteins introduced into food via conventional
breeding, they can not assess the potential allergenicity of those proteins.

25. How do concerns regarding potential problems of invasiveness or persistence of biotech
crops in the environment (e.g., as described by the European Communities at para. 55 of its
first written submission) compare with the development of herbicide/pesticide resistance in
conventional crops which may then become invasive or persistent in the environment?

29. Herbicide/pesticide resistant biotech crops pose no greater or different risk of invasiveness or
persistence than conventional herbicide/pesticide resistant crops pose. Moreover, for both biotech and
conventionally bred crops, the potential problems of invasiveness or persistence is minimal.

30. In its 2001 report on genetically engineered plants, the Royal Society of Canada's Expert
Panel on the Future of Food Biotechnology (available at
http://www.rsc.ca/foodbiotechnology/indexEN.html) stated that the likelihood that existing

genetically engineered plants will become invasive and constitute serious weed problems is remote.
This is because most of today's major crop species ha ve been subjected to intense artificial selection
over centuries for traits (phenotypes) with low surv ival value under most natural conditions. Traits
such as nonshattering of grain in cereals, lack of seed dormancy, and requirement of high fertilizer
inputs restrict the ability of most domesticated sp ecies to thrive outside the agroecosystem. Although
crops are grown over vast areas of the world today and they are generally a lien introduction in those
environments, there are relatively few cases in which they persist without deliberate human
intervention for more than a few growing seasons. Such volunteer plants ar e usually confined to
agroecosytems and rarely if ever invade undisturbe d natural communities. Do mesticated crop plants
are not represented among the worlds serious plant i nvaders. This is because persistence in wild
communities results from the combined effects of many genes working in cooperation to produce a
functioning phenotype adapted to local ecological c onditions. Therefore, in most cases insertion of
highly specific transgenes into a crops species possess ing a plethora of domesticated traits is unlikely
to alter its natural ecology so that it comes conve rted into an aggressive invading species. Such
targeted genetic modifications are unlikely to nu llify many generations of human selection involving
countless loci.

31. Most engineered plants that have been comme rcialized to date have few weedy characteristics
and would not be considered invasive plants by an y reasonable standard. We realize that the certain
plants that have been commercialized, e.g., canol a, have been domesticated relatively recently as
compared to maize and posses two fitness traits of its parent plant: weak seed dormancy and some
seed shattering. However, those traits have not tr anslated into any increased invasiveness in natural
settings to date.

32. To date, there are no reports of increased invasiveness from any of the engineered plants
grown on millions of hectares worldwide as compared to conventionally bred plants.

26. For what, if any, crops is Europe considered to be the center of origin? What relevance
does this have to the approval of biotech crops?

33. Europe is not generally considered the center of origin for agricultural and horticultural crops.
See
, Hammer, K., and M. Spahillari, M., Crops of Eu ropean Origin, IN: IPGRI (editor) (2000), pages
35-43 (report of a network coordinating group on mi nor crops. Ad hoc meeting - June 16, 1999,
Turku, Finland) Of the crop plants under the moratorium, only sugar beet (Beta vulgaris) has its origin
in greater Europe. Canola (Brassica napus) is sexua lly compatible with two species from Europe: B.
oleracea and B. rapa.

34. In the view of the United States, any poten tial effects of engineered crops, whether created
through conventional breeding or recombinant DNA t echniques, on native plants for which a Member
is the center of origin must be considered on a case-by-case basis, taking into account the particular
circumstances of each situation. However, as a ge neral matter, the significance of the concept of the
"center of origin" relates to the concern that genetic diversity would be decreased, and ultimately, the
ecosystem could be more susceptible. For example, if a particular plant species share a single genetic
makeup, they are more susceptible to being comple tely wiped out by an epidemic/ new fungus or
virus; part of the value of biological diversity is that the species is less vulnerable. A measure taken
in consideration of such potential effects, however , would, depending on the exact effects at issue,
generally fall under paragraph 1(a) of Annex A of the SPS Agreement as measures applied "to protect
... plant life or health ... from ... pests, diseases, disease-carrying organisms or disease-causing
organisms" or paragraph 1(d) as measures applied "to prevent or limit ot her damage within the
territory of the Member from ... pests."

27. In the context of the Codex working definition of a contaminant, do you consider that
the modification or reaction created by gene transfers, or the resulting protein, could be
considered a "contaminant"? (see, e.g., EC first written submission, para. 403)

35. No. The United States would note, however, that if the premise of this question is that Codex
definitions necessarily govern the interpretation of the terms of the SPS Agreement, the United States
does not agree with such premise. The terms of the SPS Agreement, like the terms throughout the rest
of the WTO Agreement, must be interpreted in acco rdance with the customary rules of interpretation
of public international law.

28. Is one of the food-safety related concerns regarding biotech products that genetic
modification might unintentionally result in the production of a toxin in the modified food
product? Would this be a toxin in the context of the Codex working definition of a toxin? (see,
e.g., EC first written submission, para. 405.) Would this be a toxin in the context of the SPS
Agreement, Annex A?

36. Yes, a food safety-related concern regardi ng all new plant varieties, developed through
biotech or otherwise, is the unintentional production of a toxin in the food. As we noted in response
to question 3, such toxins would not be those that are addressed in the Codex standard cited by the
EC. That standard is for contaminants, and encomp asses toxins that are present in food as a result of
fungal contamination. That Codex standard thus is not relevant to the issue being discussed relative to
biotech crops, in which a toxin is potentially intr oduced into the plant through breeding and thereby
becomes an integral part of the plant. However, toxins introduced into foods by way of biotech or
conventional breeding are clearly encompassed by the term "toxins" in the context of the SPS
Agreement, Annex A. Annex A 1(b) explicitly treat s contaminants and toxins as separate entities, as
shown by the fact that they are listed individually. And there is nothing in the Agreement to indicate
that "risks arising from … toxins … in foods, beverages or feedstuffs" should not apply to risks
arising from toxins that are in food as a result of breeding changes introduced into the food plant.

29. With reference to para. 420 of the EC first written submission, is there any way in which
a GMO can damage biodiversity or the ecologica l balance of an area other than through
negatively affecting the wild flora and/or fauna of the area? Please explain.

37. A biotech plant can only damage biodiversity or the ecological balance of an area through its
ability to adversely affect, directly or indirectly, th e wild flora or fauna of the area. Any damage to
biodiversity or the ecological balance of an area woul d occur due to alterations in the invasiveness or
persistence of a certain plant sp ecies, thereby causing changes in the relative abundances of different
plant species that may secondarily have a negative imp act on animal life. Such changes, should they
occur, would be caused by the new plant species (i.e ., the biotech plant) establishing or spreading into
new areas and outcompeting and displacing wild flor a thereby potentially altering the availability of
resources such as food and shelter used by wild fauna . As noted in our response to question 77, such
damage would fall within the scope of paragraph 1(a) of the SPS Agreement.

30. With reference to para. 421 of the EC firs t written submission, what sort of negative
impact on human or animal life or health ma y be caused by the increased use of specific
herbicides or the use of novel biotech-specific herbicides? Should these potential negative
effects be addressed differently than those which could occur from any other use of herbicides?
Please explain.

38. No biotech-specific herbicides exist on the ma rket. The herbicide-tole rant crops that have
been developed and that are the subject of this dispute were created to be used with herbicides that are
already commonly deployed in agriculture and alread y approved for use by the appropriate regulatory
bodies.

39. Increased use of herbicides associated with biotech crops, to the extent it occurs, could
potentially have a negative impact on human or animal life or health due to increased exposure, with
particular effects varying depending on the herbicide in question. For example, the increased use of
herbicides increases exposure to workers and non-ta rget flora and fauna, thereby increasing any risks
that the chemicals may directly present (e.g., acute toxicity to aquatic organisms). Another example
would be that, with the increased use of herbicides, the consequent reduction in the non-target flora
surrounding the fields could have an indirect impact on the insects and animals in the ecosystem, due
to loss of a food source (e.g., weed seeds or berries) or protective cover.

40. However, the potential negative effects would be identical in nature to those associated with
traditional use patterns of these herbicides and shou ld be addressed in the same way for both cases.
Any herbicide, whether it is used on biotech crops or non-biotech crops, should undergo a rigorous
risk assessment to determine potential impacts on human and health and determine safe levels and
conditions for use.

31. With reference to para. 422 of the EC first written submission, how does herbicide
resistance negatively affect flora and fauna? How is this potential effect different for biotech
crops compared to the development of herbicide resistance in non-biotech crops?

41. To answer the second question first, the pot ential effect on flora and fauna of herbicide-
resistant biotech crops is no different compared to the effect on flora and fauna of non-biotech
herbicide-resistant crops.

42. There are two parts to the first question. First, does the herbicide tolerant plant itself
negatively affect flora/fauna, and second, does the use of the herbicide on herbicide tolerant plants
negatively affect flora/fauna.

43. Herbicides have been used in agricultural sin ce 1940s. Plants that survive herbicide treatment
inherently have herbicide tolerance genes in thei r DNA. With the advent of modern technologies,
new herbicide tolerance genes have been selected (somaclonal variation or mutation) or engineered
into plants. Such plants, irrespective of how they have been produced, have not been reported to be
more invasive of natural areas; in most studies to date, the plants containing these herbicide tolerance
genes do not have increased fitness characteristics that would lead to increased invasiveness (e.g. seed
dormancy, increased seed numbers).

44. The potential impacts on flora and fauna are mainly due to the use of herbicides. Herbicide
tolerant plants, irrespective of how they are produced , have not been reported to be more invasive of
natural areas since the introduction of the first herbicide 2,4-D was intr oduced in the 1940's.
However, it should be noted that agricultural prac tices in general, including mechanical cultivation,
inter-cropping (growing two or more crops simulta neously on the same field), or no-till versus
conventional cropping measures all alter flora, thereby altering fauna.

45. Since the 1970s, long before biotech plants we re available, herbicid e-resistant weeds were
found because of repeated use of a single herbicid e. Weed scientists have responded to this by
educating growers to rotate the types of herbicides they use in a particular field to reduce the chance
of selecting weeds that can tolerate or resist the toxic effects of a particular type of herbicides.

Herbicide-resistant weeds are an issue any time herbicides are used irrespective of whether the plant is
engineered or not.

32. With reference to para. 423 of the EC first written submission, could any undesirable
cross-breed of plant be considered to be a "pest"? Is the IPPC definition of "pest" relevant in
this context?

46. The United States believes that any undesira ble cross-breeding of a plant (e.g., increased
invasiveness) would render the pl ant a "pest" in that context. Moreover, such a plant would be
considered a pest under the IPPC definition of "pest ," which the United States does consider relevant
in this context.

47. The official IPPC definition of pest is: "any species, strain or biotype of plant, animal, or
pathogenic agent, injurious to plants or plant produc ts." The full range of pests covered by the IPPC
extends beyond pests directly affecting cultivated plan ts. The coverage of the IPPC definition of plant
pests includes weeds and other species that have indirect effects on plants, and the Convention applies
to the protection of wild flora. The scope of th e IPPC also extends to organisms which are pests
because they: (1) directly affect uncultivated/unmanaged plants; (2) i ndirectly affect plants; or (3)
indirectly affect plants through effects on other organisms.

33. With reference to para. 425 of the EC first written submission, could the development of
resistant target insects be of concern if such pests cannot become established or spread?

48. No, the only possible concern about the potential development of resistant target insects
would be if those individuals carrying the resist ance trait were to become established or spread
throughout the population, and that as insect populations become resistant to the less toxic pesticide
Bt, more toxic chemical pesticides might be applied to control the Bt-resistant insect.

34. With reference to para. 46 of the EC first oral statement, do the parties consider that
any potential negative impact on soil micro-organ isms from the use of biotech crops could be
considered to be "other damage to the territory of a Member arising from the entry,
establishment or spread of a pest"? Please explain.

49. Yes, potential negative impact on soil micro- organisms can be considered to be "other
damage to the territory of a Member arising from the entry, establishment or spread of a pest." A pest
is defined as "any thing or person that is noxious, destructive, or troublesome." The Compact Oxford
English Dictionary , 1971, page 2145. Thus, a biotech crop, or indeed, any plant, that injured
beneficial soil microbes could be considered to be a "pest" within the meaning of the SPS Agreement.

50. In this regard, it is also wo rth noting that the IPPC's recently adopted revisions to ISPM 11,
Pest Risk Analysis for Quarantine Pests Including Analysis of Environmental Risks, specifically
tailoring the existing standard to address biotech crops ["living modified organisms"] includes the
following:

Annex 3, "DETERMINING THE POTENTIAL FOR A LIVING MODIFIED
ORGANISM TO BE A PEST"
Potential phytosanitary risks for LMOs may include: …
c. Adverse effects on non-target organisms including, for example:

– changes in host range of the LMO, including the cases where it is intended
for use as a biological control agent or organism otherwise claimed to be
beneficial
– effects on other organisms, such as biological control agents, beneficial
organisms, or soil fauna and microflora , nitrogen-fixing bacteria, that result
in a phytosanitary impact (indirect effects)
– capacity to vector other pests
– negative direct or indirect effects of plant-produced pesticides on non-
targetorganisms beneficial to plants.
(Emphasis added.)

51. While not dispositive of the scope of the te rm "pest" under the SPS agreement, the specific
inclusion of such damage in ISPM 11, by the body explicitly recognized by the SPS Agreement as
responsible for international sta ndards for plant health, is additional evidence that the ordinary
meaning of the term "pest" can include a biotech product that might affect soil micro-organisms.

35. With regard to the requirement to undertak e and complete procedures without undue
delay (Annex C(1)(a) of the SPS Agreement):

(a) What is the object and purpose of this requirement?

52. As noted in paragraph 3 ab ove, the WTO Agreement is to be interpreted in accordance with
the ordinary meaning to be given to the terms of the treaty in their context and in the light of the
treaty's object and purpose. Thus, as an initial matt er, the United States would note that the pertinent
issue is the object and purpose of the SPS Agreem ent or WTO Agreement, and not the object and
purpose of the particular requirement in Annex C(1)(A). The Preamble to the SPS Agreement
provides that one object and purpose of the Agreement is that Members "Desir[e] the establishment of
a multilateral framework of rules and disciplines to guide the development, adoption and enforcement
of sanitary and phytosanitary measures in order to minimize their negative effects on trade." The term
"undue delay" should be interprete d in accordance with its ordinary me aning, in context, and in light
of the object and purpose of the SPS Agreement of minimizing the negative effects of SPS measures
on trade.

(b) Is it correct that a delay in the completion of procedures would not
result, ipso facto, in a breach of Annex C(1)(a)? If so, how is a panel to
determine when a delay rises to the level of being "undue"?

53. The United States agrees that any delay is not, ip so facto, a breach of Annex C(1)(a). Rather,
Annex C(1)(a) is concerned with delays that are "undue." A determination of whether a delay is
"undue" in any particular dispute must turn on the specific facts and circumstances of that dispute. In
this particular dispute, the United States submits that the adoption of an indefinite delay on all
approvals, without justification, must be considered an "undue" delay in a Member's approval
procedures. Otherwise, the "undue delay" obligation would have no meaning.

36. With respect to those applications origin ally submitted under EC Directive 90/220 and
subsequently "re-submitted" under EC Direct ive 2001/18, did the re-submission of these
applications mark the beginning/opening of a new procedure for the purposes of Annex C(1)(a)

of the SPS Agreement, or is/was there only one sing le procedure? What are the implications of
your reply for the calculation of the length/dur ation of the relevant approval procedure(s)?
Specifically, from what time/event should the le ngth be calculated (e.g., when the original
procedure was initiated under EC Directive 90/220; when the second procedure was initiated
under EC Directive 2001/18)?

54. In this dispute, the EC seems to agree that th e adoption of 2001/18 did not restart the clock.
To the contrary, the EC has explained that under its "i nterim approach," the EC in fact began to apply
the 2001/18 requirements to 90/220 approvals well before
 the entry into force of Directive 2001/18.
In addition, the United States submits that the adoption of EC Directive 2001/18 cannot restart the
clock for purposes of determining whether appr ovals procedures are completed without "undue"
delay. A finding to the contrary would undermine the obligation to complete approval procedures
without "undue delay." In particular, since it is not uncommon to consider and adopt revisions to SPS
approval procedures, finding that a revised procedure restarts the clock would permit a WTO Member
to indefinitely postpone approvals by making frequent changes to its approval procedures.

37. With reference to Annex A(1) of the SPS Ag reement, are the parties of the view that
"procedures" and, more specifically, "approval procedures" are SPS measures? If so, are
(approval) procedures as such subject to the requirem ents of Articles 2.2, 5.1, 5.5 and 5.6 of the
SPS Agreement? Why? Why not? In answering this question, please include a discussion of
the second clause of Article 8 ("otherwise ensure that [ …]") of the SPS Agreement and indicate
which are the relevant "provisions of this Agreement".

55. The United States wants to make clear that this dispute is not about the EU's right to adopt an
approval system. In this dispute, the United States is claiming that (1) the moratorium is inconsistent
with the specific obligations in Annex C governi ng a Member's approval procedures, and (2) that the
moratorium, in so far as it is a measure that has the result
 of barring the marketing and sale of all new
biotech products, is a measure that is inconsis tent with Articles 2.2, 5.1, and 5.5 of the SPS
Agreement. The additional elements of the above question raise broad systemic issues that are not
necessary to address in order to resolve this dispute.

38. With particular reference to the complainin g parties' challenge to various member State
safeguard measures under Article 5.5 of the SPS Agreement, please answer the following
questions:

(a) Which is the relevant "Member" for the purposes of the Panel's analysis
of the complaining parties' challe nges? Is it: (i) the member State
applying the safeguard measure or (ii) the European Communities as a
whole?

56. The United States considers the relevant Me mbers to be both the European Communities as a
whole and the individual member States applying the safeguards.

(b) Would it be permissible under Article 5.5 for an EC member State to
apply within its territory, either permanently or provisionally, a higher
level of protection than that which is applied in the rest of the European
Communities?

57. The United States does not assert that an EC member State must apply the same level of
protection as the EC as a whole. However, the mere fact that an EC member State has adopted a more

restrictive SPS measure does not indicate that the member State has in fact
 applied a higher level of
protection. To the contrary, as the United States understands the facts in this dispute and the
operation of the EC "safeguard" provisions, the member States in this case are applying the same level
of protection as the EC as a whole, and that th e member State measures are not based on a risk
assessment.

For all complaining parties

39. Do the complaining parties agree with the statement at para. 17 of Norway's written
submission that "modern biotechnology" ref ers to more than just "recombinant DNA"
technology? Please explain what relevance, if any, this difference may have for the issues in this
dispute.

58. The phrase "modern biotechnology" might be used to refer to more than just "recombinant
DNA" technology. The measures addressed in this di spute, however, are applied with respect to
agricultural products of recombinant DNA technol ogy. Thus, as the United States indicated in
footnote 2 of its first written submission, the United States used the phrase "modern biotechnology" to
refer only to "recombinant DNA" technology. In any event, however, the term "modern
biotechnology" is not a treaty term, and no issue in this dispute turns on the definition of this phrase.

40. Do the complaining parties agree with Norway arguments at paras. 130-131 of its
written submission that risks associated with the use of antibiotic resistant marker genes do not
fall within the scope of the SPS Agreement?

59. The United States believes that the risks Norw ay has identified with the use of antibiotic
resistant marker genes are covered by the SPS Agreement.

60. The concern described in Norway's brief is that the antibiotic resistance gene could be
transferred from the plant to a human or animal pa thogen in the digestive tract of a human or animal
consuming food from the plant. For an animal infe cted with the pathogen that would ordinarily be
treated with the antibiotic to which the pathogen had become resistant, the tran sfer of the resistance
gene would contribute to the establishment and sp read of disease--the disease caused by the now
resistant pathogen—a risk that clearly falls within paragraph 1(a).

61. Additionally, the antibiotic resistance gene fa lls within the definition of an additive under the
SPS Agreement. The gene is a component of the food from the biotech plant; is not normally
consumed as a food by itself; is not normally used as a typical ingredient of the food, and is
intentionally added to the plant (and thus the food from the plant), for a technological purpose in the
manufacture of the food. As such, protection agains t any associated human or animal health risks,
such as either the development of antibiotic r esistance or the development of the disease the
antibiotics would be used to treat, falls within pa ragraph 1(b). For the same reason, products of
resistance genes are also covered by the SPS Agreement.

41. Do the complaining parties agree with Norw ay's statement at para. 130 of its written
submission that plant DNA is not an "organism" and that concerns related to effects on plant
DNA do not fall within the scope of the SPS Agreement?

62. The United States would agree with Norway th at plant DNA is not itself an "organism," but
disagrees that concerns related to effects on pl ant DNA are therefore necessarily excluded from the
scope of the SPS Agreement.

63. First, it is not necessary for plant DNA to be an organism for measures taken to protect
against any increased risk of antib iotic resistance to fall within th e scope of the SPS Agreement. As
the Norwegian submission recognizes, plant DNA is part of the plant, which is undisputedly an
organism within the scope of paragraph 1(a). Concerns relating to effects on plant DNA are
essentially concerns about the potential effects of the altered plant. As discussed in the response to
question 40, the antibiotic resistance gene falls with in the SPS Agreement's definition of an additive,
and protection against any associated human or animal health risks, such as either the development of
antibiotic resistance or the development of the di sease the antibiotics would be used to treat, falls
within paragraph 1(b).

64. Second, the Norwegian submission argues th at it is not the plant DNA, but a separate
pathogen, that causes the disease; the plant DNA mere ly contributes to the development of antibiotic
resistance, and therefore such effects fall outside of the scope of paragraph 1(a). This is based on a
misreading of paragraph 1(a), which requires only that the measure be adopted to protect against the
risks…arising from the establishment or spread of diseases , …or disease-causing organisms."
[Annex A, paragraph 1(a)] In seeking to limit the development of antibiotic resistance, the Member is
essentially seeking to protect against the risks ar ising from the spread and establishment of the
resistant pathogen and the diseases it causes. Antibio tic resistance is only of significance because of
the disease the pathogen causes; it has no other inherent significance. The fact remains that if the
altered plant contributes to the spread of the di sease, a measure taken for the purposes of controlling
such a plant is a measure taken to protect ag ainst the ‘risks arising from the spread of...disease-
causing organisms." The fact that the altered plant is not the sole cause of the disease does not change
this conclusion.

42. Do the complaining parties agree with Norway's assertion at para. 141 of its written
submission that "[t]he situation which charac terises the present dispute is therefore one where
a lot of scientific research has been carried out on a particular issue without yielding reliable
evidence"? (emphasis in the original) Please explain your views.

65. No. Norway's assertion is essentially that , because biotechnology is a relatively new
technology, so much scientific uncertainty necessarily exists about the technology as a whole, that it is
consequently impossible to reach defensible scien tific conclusions or decisions about individual
products. The United States strongly disagrees with this. As discussed in paragraphs 27-28 of the
First US Submission, several highly-regarded scientific bodies have considered the weight of the
evidence in evaluating the considerable body of litera ture that exists with r espect to the health and
environmental safety aspects of biotech products , and have deemed it reliable enough to draw
conclusions about the general health and environm ental safety of existing biotech products and the
methods that would be appropriate for evaluating future.

43. According to the European Communities, the processing of some applications was
delayed due to exchanges deriving from the requests for voluntary commitments or
amendments of the notifications so that the noti fications would be in line with the requirements
provided for by new legislation. For example, in respect of release into the environment, in the
summer of 1999 a Common Position on the propo sed modification of the Directive was adopted
by the Council, and since then notifiers appear to have tried to address additional concerns
contained in it. The European Communities ci tes similar cases in respect of the novel food
legislation as well. However, there is no ref erence to these cases in the complaining parties'
submissions. Do the complaining parties agree with the European Communities' account? If
so, could they please explain their understanding of these cases? Please explain the relevance of
these cases to your belief that a de facto moratorium existed.

66. The United States has not claimed and does not claim that every single request for
information by EC authorities amounts to "undue delay" under the SPS Agreement. Rather, the
United States initiated this dispute because the EC adopted a nontransparent, unpublished moratorium
on all biotech approvals, and proceeded to apply that moratorium up through the August 2003, when
the terms of reference for this Panel were estab lished. Thus, regardless of whether a particular
product dossier includes exchanges between the applicant and EC authorities, under the EC
moratorium no
 product was allowed to proceed to final approval.

67. The United States also notes that the EC, in making this argument, is trying to gain advantage
in this dispute by relying on yet another breach of its WTO obligations. In particular, the EC has
informed the Panel that under its "interim appro ach," the predicted requirements of unenacted EC
legislation were imposed prospec tively on all pending product applicati ons. This change in the EC's
approval procedures was not, as required under Artic le 7 and Annex B, notified and published.
Having failed to meet its basic transparency obligations under the SPS Agreement, the EC cannot then
argue that the complainants should have made note in their submissions of this unpublished measure
making changes in the EC approval procedures.

44. Are the complaining parties making any cl aims in respect of a "failure to consider"
applications (as opposed to a "failure to grant fi nal approval" or a "failure to allow products to
move to final approval")? If so, could they plea se indicate which, if any, of the applications
referred to in their first written submissions and/or first oral statements in their view constitute
instances of "failure to consider" and why?

68. The United States is not aware of a substantive distinction between a failure to consider and a
failure to allow a product to move to final approva l. In any event, Annex C(1)(A) requires that
approval procedures be "undertaken and completed" w ithout undue delay. And, in this case, the EC
has not "undertaken and completed" its procedures w ithout undue delay. To the contrary, the EC's
adoption of a moratorium in which it has decided, without justification, not to make final decisions for
an product for an indefinite period of time must amount to "undue delay" under Annex C(1)(A).

45. With reference to paras. 2 and 24 of the US first oral statement ("failure to allow
products to move to final approval"), paras. 16 and 40 of Canada's first oral statement
("stalling and blocking of applications at key decision-making stages") and paras. 21 and 26 of
aprobación"), can it be said that the comp laining parties view the alleged moratorium
essentially as a "decision not to decide", for an unspecified period of time, with respect to any
applications for approval, rather than as a "decisi on to decide negatively" with respect to any
and all such applications?

69. The moratorium could be accurately described either as a "decision not to decide" or as a
"decision not to grant final approval" for an indefinite period, lasting at least through the
establishment of the panel and its terms of reference in August 2003. The EC both (1) did not reject
any applications during this period, and (2) did not grant final approval during this period. The
United States would like to emphasize, however, that the effect
 of the EC's decision "not to decide"
was to keep all new biotech products off the EC market. Thus, although the EC did not formally
reject any applications, the effect of the moratorium vis-à-vis market access during the period covered
by this dispute was equivalent to the rejection of all applications for approval of new biotech products.

46. Are the complaining parties asserting that the alleged across-the-board moratorium led
to "undue delays" with respect to all applications pending as of the date of establishment of this

Panel, regardless of when these applications were submitted to the relevant member State
authority?

70. Yes, the specific obligation under the SPS Agre ement is for a Member to ensure that SPS
procedures are "undertaken and completed without undue delay." By adopting an across-the-board
moratorium on all approvals, no app lications pending as of the date of panel establishment could be
processed without "undue delay." An indefinite delay without justificati on cannot be considered
anything other than "undue".

47. Using the analytical framework presented by Canada at paras. 19 to 26 of Canada's first
oral statement, could the complaining parties indicate briefly how the European Communities
has given effect to the alleged moratorium in r espect of each of the relevant individual product
applications? (see EC first written submission, p. 70 et seq)

71. The United States intends to address this issue, which entails a review of the voluminous EC
exhibits containing the product application dossiers, in its rebuttal submission. Nonetheless, the
United States has provided a preliminary response in Annex I to these answers.

48. With reference, inter alia, to paras. 285 to 297 of the EC first written submission, do the
complaining parties consider that procedural delays would be justified in situations:

72. Before addressing each subpart of this questi on, the United States would like to reemphasize
that the EC's moratorium – that is, its decision not to decide with respect to all pending applications –
was adopted without any justification and must necessarily amount to "undue delay" under
Annex C(1)(A). Thus, regardless of whether any particular product application was delayed in part by
any reason listed below (or for any other reason) , each product application suffered "undue delay"
because the EC had decided not to allow any
 application to proceed to a final decision.

 (a) where they are caused by risk consider ations which do not fall within the scope
of Annex A of the SPS Agreement;

73. The EC has not shown that the moratorium a nd its resulting delays were justified by risks
outside the scope of the SPS Agreement. Moreover, we are uncertain of the meaning of the term "risk
considerations." As long as the approval procedure is within the scope of the SPS Agreement (and the
EC apparently agrees that its Novel Foods regulati on and Deliberate Release directive are within the
scope of the SPS Agreement), the Member has an obligation to undertake and complete that
procedure without undue delay, regardless of whet her the Member also considers risks outside the
scope of the SPS agreement.

 ( b) where they have been voluntarily accepted by the applicant;

74. The EC has not shown that the moratorium and its resulting delays were voluntarily accepted
by any applicant. In fact, it is very difficult to conceive of an applicant "accepting" a delay in product
approvals – the very reason that an applicant seeks appr oval is to be able to market its product in the
EC, and any delay is prejudicial to an applicant.

75. The United States would also point out that th e EC is incorrect in stating that information
submitted by applicants in order to meet requirements of unenacted legislation was "voluntary." If, as
the EC states, no application would be approved w ithout such additional information, the submission
of such information can hardly be called "voluntary." What the EC really means, perhaps, is that EC
officials had no legal authority to request the information.

 (c) where the entry into force of new legislation is imminent and the applications
that are pending under the old legislation on the date of entry into force of the
new legislation become subject to the stricter requirements of the new
legislation;

76. The EC has not shown that the moratorium and its resulting delays were due to stricter
requirements of the new legislation. Moreover, even if the EC adopted new approval procedures with
new substantive requirements, it still had the obl igation to undertake and complete those new
procedures without "undue delay."

 (d) where they are not attributable to a Member (e.g., where they have been caused
by the applicant);

77. The EC has not shown that the moratorium and its resulting delays were not attributable to a
Member, nor were caused by an applicant. To the contrary, the moratorium was adopted by the EC.
That said, the United States is not claiming that a WTO Member is in violation of Annex C(1)(a)
where an applicant itself delays in providing in formation in response to a reasonable request for
information issued by the Member's competent authority.

 (e) where they are necessary in order to ensure compliance with existing legislation
and relevant international standards (e.g., Codex Principles; see Exhibit EC-44);

78. The EC has not shown that the moratorium and its resulting delays were necessary in order to
ensure compliance with existing legislation and rele vant international standards. In addition, the
question of "ensuring compliance with existing legisl ation" is not dispositive of whether any delay is
"undue." For example, if existing legislation requi red that a competent authority would not submit an
application for final approval for five years, then the United States submits that such delay would be
"undue." On the other hand, if the competent auth ority legitimately needed time to complete a risk
assessment as required by existing legislation, the time needed for such a procedure probably would
not amount to "undue delay."

79. With regard to "relevant international st andards," the United States is not aware of any
international standards that would result in any delays in approval procedures.

 (f) where they result from efforts to el aborate monitoring requirements, adequate
agricultural practices and similar efforts to manage SPS risks?

80. The EC has not shown that the moratorium and its resulting delays were necessary in order to
elaborate monitoring requirements, adequate agricu ltural practices and similar efforts to manage SPS
risks.

Would any of the above situations justify (i) the alleged across-the-board moratorium and (ii)
the alleged product-specific delays referred to in the complaining parties' submissions?

81. As the United States explained in its first su bmission, and as it will further elaborate in its
rebuttal submission, it does not consider that the EC h as put forth any justifications for the delay in its
approval procedures resulting from the moratorium.

49. With reference to pa ras. 440 and 441 of the EC first wr itten submission, it appears that
the European Communities is arguing, in eff ect, that the SPS Agreement would apply to a

measure (a legal provision, etc.) to the extent that measure pursues SPS objectives as defined in
Annex A(1) of the SPS Agreement, and that the TBT Agreement would simultaneously apply to
that same measure (legal provision, etc.) to the extent that measure is a technical regulation
which does not pursue SPS objectives. Do the co mplaining parties agree with this argument?
In answering this question, please address the provisions of Article 1.5 of the TBT Agreement.

82. The United States does not understand or agree with the EC argument that, in the context of
this dispute, the SPS Agreement applies to certa in "aspects of a measure", and that the TBT
Agreement applies to other "aspect s of a measure." Nor does the EC explain how in this dispute a
panel is to define or analyze an "aspect of a measure."

83. As the Panel notes in the above question, Artic le 1.5 of the TBT Agreement is quite clear in
stating that the provisions of the TBT Agreemen t "do not apply" to SPS measures as defined in
Annex A of the SPS Agreement. Annex A makes clear that "any measure" applied to protect against
one of the enumerated risks falls within the scope the SPS Agreement. It does not state that the
measure needs to be exclusively applied to protect against only the enumerated risks. Furthermore,
the SPS Agreement does not say that an SPS measur e -- meaning a measure addressed to a risk
enumerated in Annex A -- somehow loses its status as an SPS measure if the adoption of the measure
is also supported by other rationales. Thus, for exam ple, even if the EC's Deliberate Release directive
could be construed to cover some risks outside the scope of the SPS Agreement, the Deliberate
Release legislation would still be an SPS measure.

50. With reference to Article 5.7 of the SPS Agreement, do the complaining parties agree
with the European Communities that:

 (a) Article 5.7 excludes the applicability of Article 5.1 and is not an exception
(affirmative defence) to Article 5.1 (EC first written submission, para. 575)? In
answering this question, please address the relevance of the Appellate Body
Reports on Japan – Apples (footnote 316), EC – Hormones (para. 104) and EC –
Sardines (para. 275) and Japan – Agricultural Products II (paras. 86 et seq)?

84. The United States does not agree that Article 5. 7 "excludes the applicability" of Article 5.1.
To the contrary, these two provisions must be read together. In Japan Apples, the Appellate Body
elaborated on this connection between Article 5.1 and Article 5.7.

The first requirement of Article 5.7 is that there must be insufficient scientific
evidence. When a panel reviews a measure claimed by a Member to be provisional,
that panel must assess whether "relevant sci entific evidence is insufficient". This
evaluation must be carried out, not in the ab stract, but in the light of a particular
inquiry. The notions of "relevance" and "insufficiency" in the introductory phrase of
Article 5.7 imply a relationship between the scientific evidence and something else.
Reading this introductory phrase in the br oader context of Article 5 of the SPS
Agreement, which is entitled "Assessment of Risk and Determination of the
Appropriate Level of Sanitary or Phytosanitary Protection", is instructive in
ascertaining the nature of the relationship to be established. Article 5.1 sets out a key
discipline under Article 5, namely that "Me mbers shall ensure that their sanitary or
phytosanitary measures are based on an assess ment ... of the risks to human, animal
or plant life or health". This discipline informs the other provisions of Article 5,
including Article 5.7. We note, as well, th at the second sentence of Article 5.7 refers
to a "more objective assessment of risks". These contextual elements militate in
favour of a link or relationship between the first requirement under Article 5.7 and the

obligation to perform a risk assessment under Article 5.1: "relevant scientific
evidence" will be "insufficient" within th e meaning of Article 5.7 if the body of
available scientific evidence does not allow, in quantitative or qualitative terms, the
performance of an adequate assessment of risks as required under Article 5.1 and as
defined in Annex A to the SPS Agreement.
3
Thus, the first inquiry in applying Article 5.7 mu st be to determine whether there is sufficient
scientific evidence to perform a risk assessment as required under Article 5.1 and as defined in
Annex A.

85. With regard to the issue of burden of proof, the United States is not arguing in this dispute
that the defending Member has the burden of proof to show that Article 5.7 applies to a particular SPS
measure. However, by showing that each of the products subject to a member State measure were
subject to positive risk assessments by the EC's own scientists, the United States has met any burden
of proof to show that scientific evidence was not "insufficient" and that Article 5.7 does not apply.

 (b) Article 5.6 is not "relevant" where Article 5.7 applies (EC first written
submission, para. 612)?

86. The United States does not agree that Article 5.6 is not relevant where Article 5.7 applies.
The EC provides no basis for arguing that even a provisional measure should not be more trade
restrictive than required to achieve the appropriate level of SPS protection.

 (c) Article 5.7 "effectively" excludes Article 5.5 (EC first written submission,
para. 618)?

87. The United States does not agree that Article 5. 7 "effectively excludes" Article 5.5. Article
5.5 is addressed to arbitrary or unjustifiable discr imination in appropriate levels of SPS protection,
while Article 5.7 does not even address
 the level of protection. The EC provides no basis for arguing
that the adoption of a provisional measure excuses a WTO Member from its obligation not to engage
in such arbitrary or unjustifiable discrimination.

 (d) the sufficiency of relevant scientific evidence depends, inter alia, on a country's
level of protection and the nature of the risks (e.g., reversibility of damage)? (see
EC first written submission, paras. 605-606).

88. The United States does not agree that the "suffici ency of relevant scientific evidence" depends
on the level of protection or the nature of the risks. In the Japan-Apples dispute, the Appellate Body
rejected the idea that the application of 5.7 turns on the nature of the risk under examination:

"relevant scientific evidence" will be "insuffi cient" within the meaning of Article 5.7
if the body of available scientific evid ence does not allow, in quantitative or
qualitative terms, the performance of an adequate assessment of risks as required
under Article 5.1 and as defined in Annex A to the SPS Agreement. Thus, the

question is not whether there is sufficient evidence of a general nature or whether
there is sufficient evidence re lated to a specific aspect of a phytosanitary problem, or
a specific risk. The question is whether the relevant evidence, be it "general" or

3 Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, para. 179.

"specific", in the Panel's parlance, is sufficient to permit the evaluation of the
likelihood of entry, establishment or spread of, in this case, fire blight in Japan.
4
51. Concerning the complaining parties' clai ms in respect of the various member State
safeguard measures, are those measures "c ases where relevant scientific evidence is
insufficient" within the meaning of Article 5.7 of the SPS Agreement?

89. No, the scientific evidence was not "insuffici ent." To the contrary, each of the products
subject to a member State measure were subject to positive risk assessments by the EC's own
scientists.

52. Do the complainants agree with the definiti on of "an adequate ri sk assessment" as put
forward by the European Communities in the last sentence of para. 604 of its first written
submission?

90. No, the United States does not agree with the EC's conception of an "adequate risk
assessment." For example, there is no basis in the SPS Agreement for finding that a risk assessment
must be "unequivocal," that it has "withstood the passage of time," or that it is "unlikely to be
revised." In fact, in the EC – Hormones dispute, the Appellate Body rejected the idea that a risk
assessment must resolve all possible uncertainties:

In one part of its Reports, the Panel opposes a requirement of an "identifiable risk" to
the uncertainty that theoretically always remains since science can never provide
absolute certainty that a given substance will not ever have adverse health effects.
We agree with the panel that this theoretical uncertainty is not the kind of risk which,
under Article 5.1, is to be assessed.
5
Contrary to the EC's suggestion, the SPS Agreement already sets forth the requirements and definition
of a risk assessment in Article 5.1 and Annex A.

For the United States

73. The United States states at para. 163 of its first written submission that one of the
justifications put forward by Italy for its suspensi on of the sale and use of four corn products
relates to concerns about "occupational allergi es to Bt bacterium spores in farmers using Bt
pesticides". Does the United States consider that measures taken to protect farmers from
"occupational allergies" are subject to the SPS Agreement? Please explain.

91. The US conclusion that the Italian decree is an SPS measure is in part based on the stated
concern that the products could have adverse eff ects on consuming animals. A measure to protect
against such a risk would clearly constitute a measure "to protect ... animal life or health" from
"toxins" and thus would fall within the scope of Section1(a) of the SPS Agreement Annex A
definition of SPS measure.

92. The purpose for which the other report, sugg esting the possibility of "occupational allerg[ies]
to Bt bacterium spores in farmers using Bt pestic ides," was cited by the Italian government is less
clear. In the absence of any explanation, one possi bility is that the Italian government was relying on
this report of allergic reactions in farmers appl ying Bt microbial pesticides as an indication of a

4 Japan – Measures Affecting the Importation of Apples, WT/DS245/AB/R, para. 179.
5 EC – Hormones, para. 186 (emphasis in original, footnote omitted).

possible risk of allergic reactions from consumption of the engineered corn. An action to protect
humans or animals who consume the corn from suffe ring allergic reactions constitutes a measure to
"protect human life or health" from "toxins" in "foods " and thus would fall within the scope Annex A,
paragraph 1(b) of the SPS Agreement. Additionally, to the extent the basis for the Italian decree was
to protect farmers from occupational allergies in a plant used for food or feed, such a measure would
also fall within the scope of paragraph 1(b). Paragr aph 1(b) is not restricted to dietary risks, but
includes any measure taken to protect human or animal life or health from "risks arising
from...toxins...in foods...or feedstuffs." Measures ta ken to protect against occupational exposures
from the Bt toxin in the corn would clearly fall within this description.

74. At para. 24 of the US first oral statement, the United States argues that "the EC has
decided not to submit final decisions for a ma jority vote by the Commi ssion". Please explain
who in the European Communities made that decision (i.e., the Commission, certain member
States, the Council, etc.?).

93. The decision not to submit final decisions for a majority vote by the Council (and failing a
qualified majority, on to the Commission) appears to have been made by the unit within the
Commission responsible for biotechnology matters. From statements made by relevant Commission
officials, it appears that they well understood that the moratorium was not consistent with the WTO
obligations of the Communities, but with a "blocking minority" of member States preventing approval
under defined EC procedures, the Commission unit decided not to submit final decisions for a
majority vote, knowing that a negative vote would ha ve also been unsupported by risk assessment or
sound science and, thus, by the Communities' WTO obligations.

75. With reference to paras. 138 and 139 of the US first written submission:

 (a) Please explain for each individual app lication (those referred to in letters (a)
through (d) of para. 138) why, in the United States' view, there has been an
undue delay.

 (b) In answering sub-question (a) abov e, please also indicate, based on the
provisions of EC Directives 90/220 and 2001/18 and Regulation 258/97 what you
consider to be the processing period that should have applied to the applications
in question.

94. The EC's moratorium – that is, its decision not to decide with respect to all pending
applications – was adopted without any justifica tion and must necessarily am ount to "undue delay"
under Annex C(1)(A). Thus, regardless of whether any particular product application exhibited some
progress or whether some delays might have been justifiable under Annex C(1)(A), each product
listed in paragraphs 138 and 139 of the US first submission was subject to the moratorium and thus
subject to "undue delay" because the EC had decided not to allow any
 application to proceed to final
decision.

95. In addition, as noted in the answer to Qu estion 47 above, the United States plans to address
the EC's product histories more fully in its rebuttal submission.

 (c) Please provide support for the assertion that prior to the adoption of the alleged
moratorium all approval procedures undertaken under EC Directive 90/220
were completed in less than three years.

96. Please see Annex II attached to these answers.

 ( d) With reference to sub-question (c) ab ove, were all those procedures completed
within the timelines provided for in EC Directive 90/220?

97. Directive 90/220 does not precisely specify the time of each step, but appears to contemplate
a time-frame from application to decision of no more than 1 year.

76. Have there been instances in which applicants requested to be informed of the stage of
the procedure and/or requested an explanatio n for any delays, but where these requests were
denied or no response was provided?

98. As explained in paragraphs 96-97 of the US First Submission, the EC's adoption of an
unpublished, nontransparent moratori um on all biotech approvals is f undamentally inconsistent with
the EC's transparency obligations under Annex C(1)(B).

77. With reference to paras. 157 to 159, 161 and 163 to 164, could the United States be more
specific regarding which of the concerns/justific ations cited by the various EC member States
relate to risks or damage arising from the spread of "pests", from "disease-causing organisms",
from "toxins", from "contaminants", and why? (E.g, under what heading(s) would the concern
about insect resistance fall, and why? What is the relevant pest, disease-causing organism,
etc.?)

99. The member State measures cite the following concerns: (1) the effects of Bt toxin on non-
target organisms; (2) a concern that the ingestion of antibiotic resistant genes by humans and animals
would cause the recipients to also develop resistance; (3) the potential for insects to develop resistance
to the Bt toxin, and thus, become more difficult to manage and control; (4) concern over the impact on
agriculture, the environment, and consumer hea lth, from the genetic escape and the spread of
herbicide tolerance to other plants. These risks all fall within the scope of the SPS Agreement.
(1) Effects of the Bt toxin on non-target animals

100. As noted in the response to Question 34, a pest is defined as "any thing or person that is
noxious, destructive, or troublesome." The Compact Oxford English Dictionary , 1971, page 2145.
Thus, any Bt crop presenting a risk to non-target orga nisms could be considered to be a "pest" within
the meaning of the SPS Agreement, pursuant to Annex A, paragraph 1(a).
(2) Ingestion of antibiotic resistant genes woul d lead to the spread of antibiotic resistance

101. As noted in the response to questions 40 and 41, the stated concern is that the antibiotic
resistance gene would be transferred from the plan t to a human or animal pathogen in the digestive
tract of a human or animal consuming food from the pl ant. For an animal infected with the pathogen
that would ordinarily be treated with the antibiotic to which the pathogen had become resistant, the
transfer of the resistance gene would "contribute to the establishment and spread of disease"--the
disease caused by the now resistant pathogen—a risk that clearly falls within paragraph 1(a).
Similarly, for the human infected with the antibiotic -resistant pathogen, the transfer of the resistance
gene would be a risk "arising from a …disease-causing organism in foods," which would fall under
paragraph 1(b).

102. Alternatively/additionally, the antibiotic resi stance gene falls within the definition of an
additive. The gene is a component of the food from the biotech plant; is not normally consumed as a
food by itself; is not normally used as a typical ingredient of the food, and it intentionally added to the

plant (and thus the food from the plant), for a tec hnological purpose in the manufacture of the food.
As such, protection against any associated health risks falls within paragraph 1(b).

(3) Potential for insects to develop resistance to Bt

103. The articulated concern here is that, as insect populations become resistant to the less toxic
pesticide Bt, more toxic pesticides would need to be applied to control the pest, causing greater
environmental damage. In this instance, the pest would be the Bt crop, which indirectly causes an
increased potential for risks to animal or plant life or health. Such risks are clearly covered by the
SPS Agreement.

104. In this regard, it is worth noting two IPPC st andards that address this point. Section 2.3.1.2 of
ISPM 11, Pest Risk Analysis for Quarantine Pest s Including Analysis of Environmental Risks,
describes some of the potential "indirect pest effects" that can be considered in determining whether
an organism is a quarantine pest: "environmental and other undesired effects of control measures
feasibility and cost of eradication or containment" (page 19).

105. In addition, the recent IPPC revisions to I SPM 11, tailoring the existing standard to address
biotech crops ["living modified organisms"] includes the following:

Annex 3, "DETERMINING THE POTENTIAL FOR A LIVING MODIFIED
ORGANISM TO BE A PEST"
Potential phytosanitary risks for LMOs may include:
a. Changes in adaptive characteristi cs which may increase the potential for
introduction or spread, for example alterations in:
– tolerance to adverse environmental conditions (e.g. drought, freezing, salinity
etc.)
– reproductive biology
– dispersal ability of pests
– growth rate or vigour
– host range
– pest resistance

– pesticide (including herbicide) resistance or tolerance .
(Emphasis added.)

(4) Effects on agriculture, the environment, and c onsumer health from the spread of herbicide
tolerant genes to other plants

106. There are essentially two SPS-related concerns at issue here. First, the stated concern is that,
assuming the two species are growing in proximity, herbicide tolerance genes from a crop plant might
cross-breed with wild relatives or other sexually-compa tible plants and transfer the herbicide-tolerant

gene. While most studies to date indicated that the plants containing these herbicide tolerance genes
do not have increased fitness characteristics that would lead to increased invasiveness, the concern has
been raised that the herbicide tolerant gene would confer a selective advantage on the off-spring. One
resulting risk, should that occur, would be that th e herbicide-tolerant offspring would eventually
eliminate the existing flora, or otherwise result in a lo ss of biological or genetic diversity, either in the
plant species, or by affecting the larger ecosystem. In the event of such a circumstance, the herbicide-
tolerant plant would present a risk of "invasiven ess," or "weediness," and thereby meets the definition
of a pest under the SPS agreement. A second ca tegory of risks would be that, if the resulting
herbicide tolerant offspring results in an incr eased use of herbicides, it would thereby increase the
risks to flora, fauna, and consumer health. The ri sks to flora and fauna fall within Annex A paragraph
1(a)--risks to "animal or plant life or health arising from the …establishment or spread of pests," while
the risks to consumer health would fall within para graph 1(d)—"other damage within the territory of
the Member from the…establishment or spread of pests."

107. Here as well, it is worth no ting two IPPC standards that addr ess this point. Sections 2.3.1.1
and 2.3.1.2 of ISPM 11, describes some of the poten tial effects that can be considered in determining
whether an organism is a quarantine pest:

In the case of the analysis of environmental risks, examples of direct pest effects on
plants and/or their environmental consequences that could be considered include:
– reduction of keystone plant species
– reduction of plant species that are major components of
ecosystems (in terms of abundance or size), and endangered
native plant species (including effects below species level
where there is evidence of such effects being significant)
– significant reduction, displaceme nt, or elimination of other
plant species.
Specified examples of indirect pest effects on plants and/or their environmen tal consequences to be
considered include:

– significant changes in ecological pro cesses and the structure, stability or
processes of an ecosystem (including further effects on plant species, erosion,
water table changes, increased fire hazard, nutrient cycling, etc.)

(Page 19.) In addition, the recent IPPC revisions to ISPM 11, tailoring th e existing standard to
address biotech crops ["living modified organisms"] include the following:

Annex 3, "DETERMINING THE POTENTIAL FOR A LIVING MODIFIED
ORGANISM TO BE A PEST"
Potential phytosanitary risks for LMOs may include:…
b. Adverse effects of gene flow or gene transfer including, for example:
– transfer of pesticide or pest r esistance genes to compatible species

– the potential to overcome existing reproductive and recombination barriers
resulting in pest risks
– potential for hybridization with existing organisms or pathogens to result in
pathogenicity or increased pathogenicity.

ANNEX I

47. Using the analytical framework presented by Canada at paras. 19 to 26 of Canada's first oral statement, could the complaini ng parties indicate
briefly how the European Communities has given effect to the allege d moratorium in respect of each of the relevant individual p roduct applications?
(see EC first written submission, p. 70 et seq)

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
202 C/DE/96/05
Bayer OSR
Falcon
90/220 Circulation to MS Nov.96 No vote in Reg.Cttee
209 C/BE/96/01
Bayer OSR MS8
90/220 Circulation to MS Jan 97 No vote in Reg. Cttee
216 C/DK/97/01
Monsanto
RR Fodder Beet
90/220 Despite ...
- positive MS opinion
(7 Oct.1997), and
- positive SCP opinion
(23 June 1998), and
- Applicant responds to all MS
questions
(27 Apr.1998):

Commission failed to submit
measure for vote by Regulatory
Committee

222 C/ES/96/02
Monsanto
Bt Cotton (531)
90/220 Regulatory Committee vote held
on 11 Feb. 1999. No qualified
majority necessary for adoption of
Commission’s proposed measure
approving product.
Despite...
- positive MS opinion
(19 Nov.1997), and
- positive Scientific Committee
opinion (14 July 1998), and
- 11 Feb.1999 vote in
Regulatory Committee with no
outcome:
AND legal obligation to
forward to Council "without
delay" under Art.21 of 90/220

Commission failed to submit to
Council

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
229 C/ES/97/01
Monsanto
RR cotton
(RRC1445)
90/220 Regulatory Committee vote held
on 11 Feb. 1999. No qualified
majority necessary for adoption of
Commission’s proposed measure
approving product.
Despite...
- positive MS opinion
(19 Nov.1997), and
- positive Science Committee
opinion (14 July 1998), and
- 11 Feb.1999 vote in
Regulatory Committee with no
outcome:
AND legal obligation to
forward to Council "without
delay" under Art.21 of 90/220

Commission failed to submit to
Council

235 C/SE/96/3501
Amylogene
Starch Potato
90/220 Circulation to MS June 98 No vote in Reg. Cttee
239 C/D/98/06
Bayer OSR
Liberator
90/220 Circulation to MS 98/99 No vote in Reg. Cttee
244 C/F/96/05-10
Syngenta
HT/Bt11 stack
90/220 Circulation to MS May.99 No vote in Reg. Cttee
254 C/NL/98/11
Monsanto
RR OSR (GT73)

90/220 Total time for CA review: 54
months (7.Jul 1998 to
22.Jan.2003)
Time taken by Applicant to
respond to questions: 12
months
Difference: 32 months
instead of 90 days (Art. 12 of
90/220)
(note that 10 were taken to
resolve confidentiality issues
in relation to detection
methods)

MS review was completed
on 6 Oct.2003

EFSA scientific review completed
11 Feb.2004

Regulatory Committee vote
expected 16 June 2004

258 C/BE/98/01
Bayer
LL Soybeans
90/220 still at MS level
264 C/GB/99/M5/2
Bayer
LL OSR
90/220 still at MS level

266 C/ES/99/01
Stoneville
BXN Cotton
90/220 still at MS level

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
270 C/NL/00/10
Pioneer/Dow
BtCorn Cry1F
90/220 Circulation to MS after
Aug. 03
No vote in Reg. Cttee
275 C/ES/01/01
Pioneer Dow
BtCorn Cry1F
90/220 Circulation to MS after
Aug. 03
No vote in Reg. Cttee
279 C/ES/00/01
Monsanto
RR corn (NK603)

90/220 Total time for CA review: 25
months
Time taken by Applicant to
respond to questions: 13
months
Difference: 12 months
instead of 90 days (Art. 12 of
90/220)
 Regulatory Committee vote held
on 18 Feb. 2004. No qualified
majority necessary for adoption of
Commission’s proposed measure
approving product.
Proposed measure has been
submitted to Council –expected
vote at 28 June 2004 ENV
Council

285 C/NL/94/25/A
Bejo Zaden
withdrawn
90/220
286 C/ES/98/01
Monsanto
RR corn (GA21)

Withdrawn:
15 Sept. 2003
90/220 Despite ...
- positive MS opinion
(27 May 1998)
- applicant answers all MS
questions (21Oct.1999)
- positive SCP opinion
(22. Sep. 2000),
- completed MS consultation
- reduction of scope by applicant
to exclude cultivation and
progress less controversial import
only
(21 Mar.2001):

Commission failed to submit
measure for vote by Regulatory
Committee

287 C/F/95/06/01
Monsanto
RR OSR (GT73)

Withdrawn:
15 Jan.2003
90/220 Competent Authority refused
to consider or respond since
Feb.1996 (date of last request
for information to applicant
Total Time: more than 100
months

288 C/ES/98/02
Syngenta Bt11
withdrawn
90/22ß

MS review not completed
289 C/PT/99/01
Bayer LL Soya
withdrawn
90/220 MS review not completed

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
290 C/ES/99/02
Monsanto
MaisGard x RR
corn (MON810 x
GA21) stack

Submitted:
3 Sept. 1999

Withdrawn:
15 Sept. 2003
90/220 In the light of legal
uncertainty caused by the
moratorium, the applicant was
unable to devote resources to
respond to the questions posed
by the MS CA in a timely
fashion.

291 C/F/95/12-01/B
Pioneer MON809
withdrawn
90/220 MS review done Circ ulation to MS no vote
292 C/ES/96/01
Zeneca
Tomato
90/220 MS review done Circualtion to MS no vote
293 C/GB/97/M3/2
Monsanto
RR corn (GA21)

Submitted:
6 Nov. 1997

Withdrawn:
29 March 2001
90/220 Total time for CA review:
15.5 months (6 Nov1997 – 23
Mar. 1999)
CA ready to forward dossier
to Commission with positive
opinion (16.Feb.1999);
requests updated dossier,
which was submitted by
applicant on 23. Mar.1999)

MS failed to forward dossier
to Commission for another 7.5
months (2 Nov.1999)
 Commission fails to submit
measure to Regulatory Committee
after completion of MS
consultation on 18 Feb.2000

294 C/NL/98/08
Pioneer
T25 x MON809
withdrawn
90/220 MS review done Circ ulation to MS no vote
295 C/NL/98/09
Pioneer
HighOleic Soy
90/22ß MS review not completed

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
296 C/BE/99/01
Monsanto
/Syngenta
RR sugar beet

Submitted:
22 Dec.1998

Withdrawn:
April 2004
90/220 MS CA fails to complete
review, thereby exceeding 90
day limit by several years.
April 1999, Nov.2000 and
Jan.2001 MS CA requests
applicant to "voluntarily"
comply with 2001/18 (despite
fact that 2001/18 would not be
in force until Oct.2002),
saying that Commission and
Member States would
otherwise oppose dossier.

297 AgrEvo
T14
withdrawn
90/220 MA review not completed
298 C/F/95/01A
Bayer Crop Science
Ms1xRf1
Canola/Oilseed
Rape

90/220 Commission
Decision 97/392/EC
consents to placing
on the market. MS
refuses to issue
consent letter
298 C/F/95/01B
Bayer Crop Science
Ms1xRf2
Canola/Oilseed
Rape
90/220 Commission
Decision 97/393/EC
consenting to
placing on the
market. MS refuses
to issue consent
letter
301 Monsanto
RR corn (GA21)

Submitted
24 July 1998

258/97 Total time for CA review: 18
months (24 July 1998 to 17
Jan. 2000)
Time taken by applicant to
respond to questions: 8
months
Difference: 10 months
instead of 90 days (Art. 6(3)
258/97)
 SCF review takes 17 months out
of which one month can be
attributed to applicant –
considered to be excessive

Commission fails to submit
measure to Regulatory Committee
after completion of MS
consultation on 18 Feb.2000

305 Syngenta
Bt11 Sweet Corn
258/97 approved 2004
310 Bayer LL Soybeans 258/97 MS review not completed

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
314 Monsanto
MaisGard & RR
corn
(MON810 x GA21)
stack

Submitted:
16 Mar.2000
258/97 In the light of legal
uncertainty caused by the
moratorium, the applicant was
unable to devote resources to
respond to the questions posed
by the MS CA in a timely
fashion.

317 Pioneer
BtCorn Cry1F
258/97 MS review completed Ci rculation to MS no vote
322 Monsanto
RR corn (NK603)

Submitted:
24 Apr. 2001
258/97 Total time for CA review: 18
months (24 Apr. 2001 to 5
Nov. 2002)
Time taken by applicant to
respond to question: 3.5
months (13 Dec.2001 to 28
Mar.2002)
Difference: 14.5 months
instead of 90 days (Art. 6(3))

 Regulatory Committee vote held
on 30 April 2004. No qualified
majority necessary for adoption of
Commission’s proposed measure.

328 Bejo-Zaden
Radicchio
withdrawn
258/97
329 Bejo-Zaden
Chicory
withdrawn
258/97
330 Pioneer
High Oleic Soya
withdrawn
258/97
331 Zeneca
Tomato
258/97
332 Pioneer
T25 x MON810
258/97
333 Monsanto/
Syngenta
RR sugar beet (77)

Submitted:
3 Nov.1999

Withdrawn:
16 April 2004
258/97 In the light of legal
uncertainty caused by the
moratorium, the applicant was
unable to devote resources to
respond to the questions posed
by the MS CA in a timely
fashion.

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
337 Monsanto
MON863
X MON810

Submitted :
13 Aug 2002
258/97 Product is moving according
to the rules.

ANNEX II

Approvals under 90/220 prior to the Moratorium

Note: Unless indicated otherwise, the application number for each product indicates the year that the
application was submitted. E.g., Application C/D/92/I-1 was submitted in 1992.

1. Vaccine against Aujeszky's disease
C/D/92/I-1 approved 18.12.92 completed in less than 3 years

2. Vaccine against rabies Rhône-Mêrieux
C/B/92/B28 & C/F/93/03-02 approved 19.10.93 completed in less than 3 years

3. Tobacco tolerant to bromoxynil
C/F/93/08-02 approved 08.06.94 completed in less than 3 years

4. Vaccine against Aujeszky's disease (further uses)6
C/D/92/I-1 approved 18.07.94 completed in less than 3 years

5. Male sterile swede rape resistant to glufosinate ammonium (MS1, RF1)
C/UK/94/M1/1 approved 06.02.96 completed in less than 3 years

6. Soybeans tolerant to glyphosate Monsanto
C/UK/94/M3/1 approved 03.04.96 completed in less than 3 years

7. Male sterile chicory tolera nt to glufosinate ammonium
C/NL/94/25 approved 20.05.96 completed in less than 3 years

8. Bt-maize tolerant to glufosin ate ammonium (Bt-176) Ciba-Geigy
C/F/94/11-03 approved 23.01.97 completed in less than 3 years

9. Test kit to detect antibio tic residues in milk Valio Oy
C/F1/96-1NA approved 14.07.97 completed in less than 3 years

10. Carnation lines with modified flower colour Florigene
C/NL/96/14 approved 01.12.97 completed in less than 3 years
(MS consent)

11. Swede rape tolerant to glufosinate ammonium (Topas 19/2)
C/UK/95/M5/1 approved 22.04.98 completed in less than 3 years

12. Maize tolerant to glufosinate ammonium (T25) AgrEvo
C/F/95/12/07 submitted June 96, approved 22.04.98 completed in less than 3 years

13. Maize expressing the Bt cryIA(b) gene (MON 810) Monsanto
C/F/95/12-02 submitted June 96, approved 22.0 4.98 completed in less than 3 years

14. Maize tolerant to glufos inate ammonium and expressing the Bt cryIA(b) gene (Bt-11)
C/UK/96/M4/1 approved 22.04.98 completed in less than 3 years

15. Carnation lines with improved vase life Florigene
C/NL/97/12 approved 20.10.98 completed in less than 3 years

16. Carnation lines with modified flower colour Florigene
C/NL/97/13 approved 20.10.98 completed in less than 3 years

ANNEX D-2

REPLIES BY CANADA TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE FIRST SUBSTANTIVE MEETING

For all parties

1. Are the parties of the view that the Panel must base its findings and conclusions on the
facts as they existed on the date of establishment of this Panel?

1. The Panel must make its findings and conclusi ons regarding whether the EC was in violation
of its WTO obligations as of the date of establishment of the Panel, August 29, 2003.

2. To the extent that facts that occurred after th e date of establishment of the Panel are relevant
to the determination of whether the EC was in violation of its WTO obligations as of August 29,
2003, the Panel should consider those facts. For in stance, if after the date of establishment of the
panel, an EC official stated that the "moratorium ha s been lifted" in 2004, the fact that the statement
was made could serve as evidence of the existen ce of the moratorium as of the date of the
establishment of the panel.

2. Annex A of the SPS Agreement contains two apparently alternative definitions of risk
assessment. Which of these definitions would be a ppropriate to evaluate the purported risks of
biotech products? Or would both definitions be appropriate?

3. Both definitions could be appropriate. The first definition of risk assessment in Annex A,
paragraph 4, applies to assessments of risks posed by pests or diseases. The second definition applies
to risks to human or animal health of the sort identified in sub-paragraph 1(a) of Annex A. The
definition of risk assessment in Annex A that would be appropriate to evaluate the risks of biotech
products therefore would depend on th e nature of the risk being assessed . To the extent that the EC
approval procedures are applied to protect human or animal life or health from risks falling within
paragraph 1(b) of Annex A, these approval procedures would fall within the second category of risk
assessments. For example, as Regulation 258/97 is a pplied to protect human lif e or health from risks
arising from contaminants and toxins in food, an assessment of these risks would fall within the
second category.

4. To the extent that the EC approval procedures are applied to protect against risk falling within
paragraphs 1(a), (b) and (d) of Annex A, the fi rst definition of risk assessment in Annex A,
paragraph 4 would apply. For example, Directive 2001/18 is applied, in part, to protect animal or
plant life or health from risks arising from the entr y, establishment or spread of pests. A risk
assessment respecting these risks would be covered by the first definition of risk assessment in
Annex A, paragraph 4. However, to the extent th at Directive 2001/18 is applied to protect animal life
or health from risks arising from contaminants or toxins in feedstuff, a risk assessment respecting
these risks would be covered by the second definition in Annex A.

3. Do the parties consider that food allergens can be considered to be "toxins" or "disease-
causing organisms" in a food, beverage or feedstuff?

5. Canada does not consider f ood allergens to be "toxins" or "disease-causing organisms".
However, a food allergen could be considered a "contaminant" under the SPS Agreement where the
presence of the food allergen in a food is unintentio nal. This would be the case, for example, where

the genetic modification results in the unintended pr esence or creation of a substance with allergenic
properties. Canada elaborates on this in its answer to Question 27.

6. The SPS Agreement sets out obligations in respect of sanitary measures related to food safety.
The presence of allergens in foods is squarely a food safety issue. It could not have been the intention
of the drafters of the SPS Agreement to exclude such an important aspect of food safety assessment
from the scope of the SPS Agreement . Excluding allergens would lead to the irrational result that
food safety measures applied to protect human life or health from risks of certain substances that
affect the population as a whole (i.e. toxins) would fall within the SPS Agreement while food safety
measures applied to protect human life or health fro m risks of certain substances that affect only a
sub-set of the population (i.e. food allergens) would not.

7. International organizations, such as the F AO and WHO, have recognized the assessment of
possible allergenicity as one element of the recommended food safety assessment for biotech
products.
1 The EC includes the assessment of allergen icity potential in its food safety procedures
under Regulation 258/97 as set out in Commission Recommendation 97/618/EC.2

4. Which (if any) are the other binding international law instruments which are relevant to
this case? Could the parties please identify the specific provisions which they believe to be of
relevance, and explain specifically how these provisions could be applied in this case?

8. With the possible exception of the International Plant Protection Convention, 1979 ("IPPC
1979"), there are no binding internationally law instruments relevant to this case.

9. In accordance with Article 11 of the Dispute Settlement Understanding , a panel must assess
the applicability of the covered agreements and the conformity with those agreements of the measures
of the Member complained against. Pursuant to Ar ticle 3.2 of the DSU, a panel is to interpret the
covered agreements "in accordance with the customar y rules of interpretation of public international
law." These customary rules of interpretation are codified in the Vienna Convention on the Law of
Treaties (VCLT). The Panel in this case is bound to apply these rules, as codified in the VCLT for the
purposes of interpreting the relevant covered agreements.

10. For other binding international law instrument s to be relevant to the assessment of a WTO
Member's conformity with its obligations under th e covered agreements, it would have to be shown
that these other instruments: (a) are relevant to th e interpretation of those obligations in accordance
with Articles 31 or 32 of the VCLT; (b) are successi ve treaties relating to the same subject matter
consistent with Article 30 of th e VCLT; (c) amend or modify the covered agreements in accordance
with Part IV of the VCLT; or (d) are deemed rele vant by the covered agreements themselves. With
the exception of the IPPC, no other binding intern ational law instruments qualify as relevant under
any of these four categories.

11. Canada notes that the International Plant Protection Convention, 1997 ("IPPC 1997"), cited
by the EC at paragraph 410 of its written submis sion, is not currently in force. The IPPC 1997
embodies amendments to the IPPC 1979. While Ca nada, Argentina and the United States, as well as
several EC Member States, have deposited instruments of acceptance of the amendments, the requisite
two-thirds of contracting parties of the IPPC 1979 has not yet been reached in order for IPPC 1997 to
take effect.

1 Exhibit EC-44, p. 53.
2 Exhibit CDA-24, Article 3.10 ("Allergenic Potential").

12. The IPPC 1979, which is in force, is a "bi nding international legal instrument". Canada,
Argentina and the United States, together with most of the EC Member States, have either ratified or
adhered to the IPPC 1979.

For all complaining parties

5. With Reference to paras. 285 to 297 of the EC first written submission, how do the
complaining parties account for the fact th at the companies withdrawing notifications
apparently did not cite undue delays in the pr ocessing of notifications as reasons for the
withdrawal (except in the case of the notifi cation concerning Monsanto Roundup Ready oilseed
rape (GT73))?

13. It is understandable in the circumstances th at companies withdrawing notifications did not
cite undue delays in the processing of applications as reasons for the withdrawal. As companies have
an interest in maintaining a good working relations hip with the regulatory authorities responsible for
approving their products, it is reasonable to expect companies to act with circumspection. The
absence of specific reference to undue delay does not imply that undue delay was not the cause of the
withdrawal. Many companies have cited "commerc ial reasons" for withdrawi ng their applications.
Given rapid advancements in the field of biotechnol ogy, protracted delays in an approval process may
cause products submitted for approval in 1998 to become obsolete. Also, given the considerable time
and financial resources necessary to support an appli cation, it may not be commercially justified to
proceed with the application in the face of the lega l uncertainty created by the moratorium. The sheer
number of withdrawals (thirteen under Directives 90/220 and 2001/18 and six under
Regulation 258/97) is evidence of the dramatic impact the moratorium has had on the trade in biotech
products in the EC.

14. Nor can the silence of the applicants be ta ken as evidence of satisfaction with the process;
they are just as likely to be concerned about main taining good relations with the regulators, and may
feel constrained in voicing complaints for fear, whethe r legitimate or not, that future applications will
be unfairly treated.

6. With reference to pp. 27-36 of the EC first written submission, could the complaining
parties please indicate whether the European Communities' description of their own regulatory
systems is accurate?

15. The EC does not describe the Canadian regulat ory system anywhere in its submission. The
only paragraph that might be seen to depict the Canadian regulatory system is paragraph 78.
However, not only does paragraph 78 fail to accurately depict the Canadian regulatory system, it is
misleading.

16. The premise of the paragraph is that in many countries the details of specific risk assessments
are reviewed continuously. The EC cites Canada as an example. Even if the premise was accurate,
and Canada doubts that it is, Canada is certainly not an example. Referring to a Royal Society of
Canada Report, the paragraph states that the report criticized the use of the principle of substantial
equivalence as a decision threshold to exempt new GM products from rigorous safety assessments.
The EC insinuates that Canada regulates biotech pro ducts in this manner. The Royal Society's Expert
Panel stated in its report that the concept of subs tantial equivalence represen ts an effective safety
standard and not a decision threshold. Mo re specifically, the Royal Society noted in
recommendation 8.5, which the EC does not mention, that "when substantial equivalence is invoked
as an unambiguous safety standard (and not as a decision threshold for ri sk assessment), it stipulates a

reasonably conservative standard of safety consistent with a precautionary approach to the regulation
of risks associated with GM food."

17. This latter interpretation is in line with the way Canada has applied, and continues to apply,
the concept of substantial equivalence in assessing the safety of foods derived from biotechnology, as
well as with the interpretation of the application of substantial equivalence noted by recent Joint
FAO/WHO Expert Consultations on Foods Derive d from Biotechnology and the Codex Guidelines
for the Conduct of Safety Assessment of Foods derived from Recombinant DNA Plants and
Microorganisms. The FAO/WHO and Codex documen ts clearly articulate that the concept of
substantial equivalence is a comparative approach focusing on the determination of similarities and
differences between the genetically modified food and its conventional counterpart, which permits the
identification of potential safety and nutritional issues. In any event, this case is not about substantial
equivalence.

18. As for the assertion that Canada is revi ewing its food safety and environmental safety
guidelines for plants with novel traits, be they pr oducts of modern biotech or products of other
breeding techniques, Canada does review these guide lines from time to time. Canada is completing
the update of its Guidelines for the Safety Assessment of Novel Foods
. The revised guidelines build
upon the original guidelines published in 1994. Revisions proposed are to reflect:

– the promulgation, in 1999, of the regulations on Novel Foods which
introduced changes to the definition of novel foods (which includes but is not
limited to foods derived from genetically modified organisms) and made the
pre-market notification process mandatory in Canada;
– the experience gained over the past ten years of conducting safety
assessments of novel foods derived from microorganisms and plants in
Canada; and,
– relevant national and international developments in the area of safety
assessment of novel foods (including the recent Codex guidelines).
19. Overall, the revised guidelines provide more cl arity and explanation with regard to substantial
equivalence and offer more deta iled requirements for the chemical, nutritional, microbiological,
molecular biological and toxicological assessment of genetically modified and other novel foods.
Canada has accomplished these revisions while continuing to assess and to regulate novel foods.

7. In the light of the European Communities' answer to Question 1 above in which it
touched upon the concept of "mootness", do the co mplaining parties consider that this concept
is of relevance in the present case?

20. Generally, a legal proceeding is considered "moot" when it no longer presents a justiciable
controversy because the issues involved have b ecome academic or ha ve ceased to exist.
3 T o t h e
extent that the EC is implying that the issues in th is dispute have become academic or have ceased to
exist, Canada vigorously disagrees.

21. The concept of "mootness" has arisen in previous WTO cases where a defending Member
asserts that the measure in dispute is no longer in existence. Even in cases where the measure has been
unambiguously withdrawn, panels ha ve found that it is within their jurisdiction to make findings in

3 Black's Law Dictionary, p. 1008. (Exhibit CDA-111)

relation to the measure as at the time of the establishment of the panel.
4 The WTO dispute settlement
bodies have based these decisions on the over-arching objective of the DSU of securing a
"satisfactory settlement of the matter" or "positive resolution to the dispute".
5

22. Canada does not agree that the measure in ques tion, the moratorium, has been withdrawn. It
is therefore, necessary for the Panel to make findings in relation to the moratorium as it existed as of
the date of the establishment of the Panel in order to secure a "positive resolution to the dispute".6

To Canada:

9. At page 200 of its written submission , under the heading "Request for findings and
recommendations", Canada claims that the EC me mber State safeguard measures are contrary
to the TBT Agreement and in particular, to Articl es 5.1.2 and 5.2.1. However, Canada provides
no arguments in support of such claims in its su bmission, nor does it indicate, at page 75 of its
submission, that it is not pursuing claims unde r these Articles. Does Canada wish to raise
claims under Articles 5.1.2 or 5.2.1 in relation to the EC member States safeguard measures?

23. As Canada indicated during th e first substantive meeting of the parties, it will not be raising
claims under Articles 5.1.2 and 5.2.1 of the TBT Agreement in relation to the EC Member State
national measures. Canada has submitted a corrige ndum to the Panel with respect to the relevant
paragraphs in its First Written Submission.

10. With reference to paras. 326 to 331 of Canada's first written submission, the Panel
would be grateful if Canada could provide clarif ication with regard to the following point. In
paragraph 327, Canada asserts that the "pro duct-specific marketing bans" are technical
regulations, as they meet the three criteria app lied by the Appellate Body. However in the
paragraph concluding the sub-section in quest ion (para. 331), Canada states that the EC
legislation (rather than the "product-specific marketing bans") meets the definition of a
"technical regulation". What is the point Canada is trying to make at paras. 326 to 331? That
the "product-specific marketing bans" are "technical regulations", or that relevant EC
legislation should be considered a "technical regulation"?

24. Canada apologizes to the Panel if the thrust of its arguments with respect to the product-
specific marketing bans and the TBT Agreement is less than completely clear.

25. In the alternative to its arguments with respect to the SPS Agreement, Canada is arguing, at
paragraphs 326 to 331 of its First Written Submission that the EC's relevant legislative instruments –
that is, Directives 90/220 and 2001/18, and Regulat ion 258/97 – contain both technical regulations
and conformity assessment procedures. Canada is also arguing that the product-specific marketing
bans are technical regulations in so far as they am ount to the application – or, more accurately, the
mis- or non-application – of these legislative instruments.

4 See Chile – Price Band System, Report of the Panel, para. 7.125. See also Indonesia – Autos, Report
of the Panel, para. 14.9 and India – Autos, Report of the Panel, para 7.26. In the latter case India claimed that
because the law requiring MOUs to be signed with manufacturers was no lo nger in effect, the measures was
revoked and therefore the existing MOUs fell outside the panel's jurisdiction. The panel found that the original
measures were within its' jurisdiction and made findings on the MOUs.
5 DSU, Article 3.4, 3.7. See also, Chile – Price Band System , Report of the Appellate Body,
paras. 140-144.
6 DSU, Article 3.7.

For all parties

22. How many products have been approved under the simplified procedure for foods
produced from but not containing GMOs since October 1998?

26. It is important to note that no product has b een "approved" under the simplified procedure.
The process does not involve an approval, but si mply a notification to the Commission based on a
favourable opinion by a competent authority as to the "substantial equivalence" of the product in
question to existing foods.

27. Exhibit CDA-25 contains copies of the "Su mmary of notifications received [] by the
Commission pursuant to Article 5 of Regulation 258/97 of the European Parliament and of the
Council" for the years 1997, 1998, 1999, 2000, 2002 and 2003 published in the Official Journal of the
EC. It does not appear that a summary was published for the year 2001.

28. According to these summaries, seven food or food ingredients produced from GMOs were
notified to the Commission pursuant to Article 5 of Regulation 258/97 from October 1998 to the end
of 2003.

23. The European Communities states at paras. 26-28 of its first written submission that
none of the current biotech gene transfer me thods are able to precisely control where the
foreign gene will insert into the recipient cell's genome, or whether that insertion will be stable,
and further describes the screening for the desired traits. How do the points described here
compare with the results of conventional selective breeding techniques?

29. By failing to refer to conventional selective breeding techniques and other forms of genetic
modification, such as mutagenesis, the EC a ppears to imply that the "potentially adverse
consequences for human health and the environmen t" identified in paragraph 26 are exclusive to
rDNA techniques. This is simply not true.

30. The ability to precisely control the resulti ng new genome is greater with rDNA techniques
than with conventional selective breeding techniques and other forms of genetic manipulation, such as
mutagenesis. While conventional selective breed ing techniques and mutagenesis may result in
random rearrangements of the genome, rDNA techni ques permit a more precise modification of the
genome, resulting is less disruption to other non -targeted areas of the genome. Thus, rDNA
techniques enable plant breeders to develop a gr eater understanding of what has occurred at the
molecular level the genome than do conventional selective breeding techniques and mutagenesis.

31. Regardless of the method used, the resulting orga nism must be screened for the desired traits
(i.e. the desired phenotypic characteristic). This may involve screening several generations of the
organism to ensure stability of the genetic modification. Regulators can then evaluate the end product
to determine its safety.

24. How does the potential for a llergenicity to be introduced through biotech foods (e.g., as
described by the European Communi ties at para. 45 of its first written submission) compare
with the potential for its introduction through non-GM novel foods?

32. In paragraph 45, the EC do es not provide any supporting sci entific evidence for its assertion
that rDNA techniques can produce novel proteins w ith allergenic properties. Nonetheless, Canada
recognizes that it is theoretically possible, although highly unlikely, that rDNA techniques could
produce novel proteins with previously unknown allerg enic properties. However, there is no reason to

conclude that this possibility is any greater for biotech foods as compared with non-GM novel foods.
As far as Canada is aware, no approved product in the EC or elsewhere produced from rDNA
technology has ever been found to possess new allergenic properties.

25. How do concerns regarding potential problems of invasiveness or persistence of biotech
crops in the environment (e.g., as described by the European Communities at para. 55 of its first
written submission) compare with the development of herbicide/pesticide resistance in
conventional crops which may then become invasive or persistent in the environment?

33. Canada agrees that the risks identified by th e EC at para. 55 are theoretically possible. The
risk of out-crossing is routinely assessed as a part of the approval procedures for biotech products in
the EC and in Canada. However, if the EC is impl ying that the risks identified at para. 55 are limited
only to biotech products, Canada disagrees. The risk s of invasiveness and persistence are comparable
as between biotech and non-biotech products.

34. "Conventional crops" can and do develop herbicide/pesticide resistance. Moreover, using
traditional breeding methods or mutagenesis, "conve ntional crops" have been specifically developed
for herbicide/pesticide resistance traits. In Canada , the potential risks of invasiveness or persistence
arising from plants with herbicide-tolerant tra its are assessed and managed regardless of the
production method for developing the herbicide/pesticide resistance trait.

35. It is important to note that the potential for out-crossing has more to do with the species of the
crop in question than the genetic modification. Th e invasiveness of a plant is dependant on multiple
genes and is unlikely to be altere d by the addition of one or a few transgenes. In assessing the risk of
invasiveness or persistence, the following factors are considered: the quan tity and viability of seeds
produced by the crop, the pollen flow rate of the crop, and the viability of the seeds in various soil
types and under various weather conditions. These factors should be taken into consideration
regardless of whether the herbicide-tolerance w as developed through rDNA techniques, conventional
breeding or mutagenesis.

36. It is also important to note that herbicide management systems are a common feature of
agronomic practice. This applies to conventiona l and biotech products alike. Resistance to one
herbicide, regardless of whether the crop is biot ech or not, does not imply that risks cannot be
controlled. It may simply mean that another herbicide must be used to control any resulting
volunteers (i.e. re-growth of a previously grown crop in a subsequent crop).

26. For what, if any, crops is Europe considered to be the center of origin? What relevance
does this have to the approval of biotech crops?

37. As far as Canada is aware, the EC's commun ity level scientific assessments of biotech product
applications have never cited the fact that Europe is the centre of origin for a particular crop as a
concern relevant to the assessment of the risks of those products.

38. In general, centres of origin are importa nt for plant breeding purposes because they are
typically the "centre of genetic diversity" for a partic ular crop. It is important for plant breeders to
know the centre of diversity of the plant of interest because this is where there is the greatest diversity
of plant germplasms. Centres of origins may be relevant to the approval of biotech crops because as a
centre of genetic diversity there may be a greater range of plant species related to the biotech product
under review and, thus, concerns relating to ou t-crossing may be greater. However, the EC's
scientific bodies consider, as a matter of course, the potential for out-crossing to related wild species,
regardless of whether or not Europe is a centre of origin. The reference to "centres of origin" is

another example of the EC raising abstract, hypotheti cal concerns that have never been raised in the
context of specific applications because they are not relevant or that have been rejected as
unsubstantiated.

27. In the context of the Codex working definition of a contaminant, do you consider that
the modification or reaction created by gene transfers, or the resulting protein, could be
considered a "contaminant"? (see, e.g., EC first written submission, para. 403)

39. Canada considers that the modification or r eaction created by gene transfer, or the expressed
protein, could be considered a "contaminant" as that term is defined in C odex General Standard for
Contaminants and Toxins in Food (Codex Stan 193-1995 (Rev.1-1997) ("Codex Stan 193").

40. First, Codex Stan 193 defines contaminant as "any substance not intentionally added to food
…". While the insertion of the transgene is intenti onal, that insertion may have unintended effects,
one of which could be the creation or expression of an unintended substance. Second, the Codex
definition requires that the substance must be "pr esent in food as a result of production". One of the
examples of production cited is "operations carried out in crop husbandry." As the development of
seeds is an example of production linked closely to crop husbandry, it logically follows that an
unintended substance arising from the genetic modification or reaction by gene transfers is "present in
food as a result of production". Therefore, such an unintended substance could be considered a
"contaminant" for the purposes of Codex Stan 193.

28. Is one of the food-safety related concerns regarding biotech products that genetic
modification might unintentionally result in the production of a toxin in the modified food
product? Would this be a toxin in the context of the Codex working definition of a toxin? (see,
e.g., EC first written submission, para. 405.) Would this be a toxin in the context of the SPS
Agreement, Annex A?

41. Yes. A food-safety related concern rega rding biotech products is that the genetic
modification might unintentionally result in the producti on of a toxin. The same is true of products
from traditionally-bred plants. As stated in the OE CD Report of the Task Force for the Safety of
Novel Foods and Feeds (Exhibit CDA-7) at page 15:

Increases in the level of natural toxicants can occur in plant varieties bred using
traditional techniques. It is possible, ther efore, that GM varieties could also have
altered expression of natural toxicants and antinutrients…
A related safety concern is that expression of the transgenic protein could result in the
plant producing a toxicant not observed in the parent species.
42. Toxins that are unintentional by-products of genetic modification would likely not be
considered a "toxin" in the context of Codex St an 193. Codex Stan 193 does not provide an
exhaustive definition of toxin but only sets out the typ es of "toxins" that fall within the scope of that
standard. These include toxins that are not inte ntionally added to food (i.e. mycotoxins and
phycotoxins). This is not surprising given that the primary focus of Codex Stan 193 is on
"contaminants".

43. Codex Stan 193 further notes that "inherent natural toxicants that are implicit constituents of
foods resulting from a genus, species or strain or dinarily producing hazardous levels of a toxic
metabolite(s), i.e. phytotoxins are not generally c onsidered within the scope of this standard."
Moreover, the standard further states "[inherent na tural toxicants] are, however, within the terms of

reference of the CCFAC [Codex Committee on Food A dditives and Contaminants] and will be dealt
with on a case-by-case basis."

44. Codex Stan 193 does not support the EC assertion that toxins arising from genetic
modification do not fall within the definition of "toxin" in the SPS Agreement. To the contrary, the
standard expressly recognizes the existence of "inhere nt natural toxicants" that fall outside the scope
of Codex Stan 193, but are nonetheless a food safety concern.

45. There is no question that internationall y accepted food safety assessment procedures for
biotech products provide for the assessment of the toxicity of both the intentional and unintentional
consequences of the genetic modification. The EC approval procedures for biotech foods without
question assess for potential toxicity and as such are squarely measures applied to protect against risks
arising from toxins in foods.

29. With reference to para. 420 of the EC first written submission, is there any way in which
a GMO can damage biodiversity or the ecologica l balance of an area other than through
negatively affecting the wild flora and/or fauna of the area? Please explain.

46. The EC's assertion in paragraph 420 is far too vague to provide a detailed response. In
Canada's view, the most likely way in which bi otech products can damage biodiversity or the
ecological balance of an area is by negatively affec ting wild flora and/or fauna. This risk squarely
falls within sub-paragraph 1(d) of Annex A.

30. With reference to para. 421 [422?] of the EC first written submission, what sort of
negative impact on human or animal life or health may be caused by the increased use of
specific herbicides or the use of novel biotech -specific herbicides? Should these potential
negative effects be addressed differently than those which could occur from any other use of
herbicides? Please explain.

47. First, Canada is not aware of the existe nce of "novel biotech-specific herbicides". The
herbicides associated with most, if not all, of the herbicide-tolerant biotech products with pending
applications in the EC (glufosinate-ammonium a nd glyphosate) are commonly available herbicides.
They have not been developed for specific biotech products; to the contrary, the biotech products
were developed specifically for the herbicides, which have long been used on non-biotech crops.

48. Second, the type of negative impact on human, or animal life or health, caused by the use of
herbicides is specific to individual herbicides. These impacts are routinely assessed at the time the
herbicide is approved for marketing and may involv e the imposition of conditions on the use of the
herbicide. Any negative impact on human or animal life or health, if one exists, is related to the
agronomic practices associated with herbicide use, not the biotech product per se. In fact, certain
herbicide-tolerant biotech crops permit more e nvironmentally sustainable agronomic practices. For
example, the use of herbicide-tolerant Roundup R eady canola (tolerant to the herbicide glyphosate)
enables farmers to practice zero-till agriculture resu lting in less adverse impacts on the environmental
than the traditional practice, common in the EC, of using pre-emergent herbicides.

31. With reference to para. 422 [423?] of th e EC first written submission, how does
herbicide resistance negatively affect flora and fauna? How is this potential effect different for
biotech crops compared to the development of herbicide resistance in non-biotech crops?

49. Canada understands the questi on to be referring to the "negative impact on wild flora and
fauna" in paragraph 423 not 422.

50. The EC claims that "[t]his specific use of he rbicide" could have a "negative impact on wild
flora and fauna". If the EC is suggesting that he rbicide use could have a "negative impact on wild
flora and fauna", Canada agrees. However, whethe r herbicide use or misuse negatively impacts wild
flora and fauna is a general issue not limited to biotech products.

51. One possible effect of herbicide use is that it may lead to the development of herbicide-
tolerance in surrounding wild flora. For exam ple, some broad-spectru m herbicides, such as
imidazolone, may give a selective advantage to weeds that are tolerant of that herbicide due to the fact
that the herbicide remains effectiv e in the soil longer than other herb icides. By contrast, glyphosate
(marketed under the tradename Roundup), is less likely to give the same advantage because
glyphosate rapidly degrades in the soil. Imidaz olone is typically applied to traditionally-bred
herbicide-tolerant crops, while Roundup is typically applied to biotech herbicide-tolerant crops.
Whether wild flora develops herbicide-tolerance is related to the characteristics of the herbicide used,
including its accumulation and residual soil activity, not the presence of the herbicide-tolerant crop.

52. One possible effect of herbicide-tolerant crops on wild flora and fauna is that the herbicide-
tolerant trait may be transferred to wild flora th rough out-crossing. Consequently, the wild flora may
be able to withstand an application of the herbicid e to which it is now tolerant. The presence of the
herbicide-tolerant gene in the wild flora, how ever, will not provide a selective advantage in the
absence of herbicide use.

53. In any event, these concerns are not limited to biotech products. The herbicides associated
with the majority of biotech products with pending applications in the EC, glufosinate-ammonium and
glyphosate, are not specific to biotech products at al l. Moreover, there are many types of herbicides
used primarily with conventionally bred herbicid e-tolerant plants, such as imidazolinone, imazamox
imazethapyr and sethoxydim. The EC's statements in paras. 422 and 423 apply equally to these other
herbicides. If the EC is suggesting that it is legitimate to stall the approval of biotech products
because of concerns about the negative impact of he rbicide use, Canada disagrees. Concerns about
the negative impact of herbicides should be dealt wi th on their own merits and apply to the use of
herbicides in relation to all crops, conventional and biotech alike.

32. With reference to para. 423 of the EC fi rst written submission, could any undesirable
cross-breed of plant be considered to be a "pest"? Is the IPPC definition of "pest" relevant in
this context?

54. It is Canada's view that any undesirable cr oss-breed of plant could be considered to be a
"pest" under the SPS Agreement to the extent that the undesirable cross-breed of the plant harms
"animal or plant life or health" or "human life or health" or cause "other damage".

55. To the extent that the "pest" in question is a pest to plants or plant products, the definition of
"pest" in the IPPC, 1979 may inform the inte rpretation of the term "pest" as used in the SPS
Agreement. That definition is:

any form of plant or animal life, or any pathogenic agent, injurious or potentially
injurious to plants or plant products.
56. Therefore, if the "undesirable cross-breed of plant" is "injurious or potentially injurious to
plants or plant products" then it should be considered a "pest" for the purposes of the SPS Agreement.
However, this does not define the full extent of what may be considered a "pest" under the SPS
Agreement.

33. With reference to para. 425 of the EC first written submission, could the development of
resistant target insects be of concern if such pests cannot become established or spread?

57. At paragraph 425, the EC seems to suggest th at if a pest management strategy is no longer
effective because the target pest has developed resist ance, an alternative pest management strategy to
combat the resistant target pest would no longer be an SPS measure. This argument is without merit.
If a pest management strategy is no longer effectiv e because the target pest has developed resistance,
the risks that then arise are those relating to the establishment or spread of the resistant pests.

34. With reference to para. 46 of the EC first oral statement, do the parties consider that
any potential negative impact on soil micro-organ isms from the use of biotech crops could be
considered to be "other damage to the territory of a Member arising from the entry,
establishment or spread of a pest"? Please explain.

58. Yes. To the extent that a plant could cau se "damage to the territory of a Member" by
negatively impacting on soil-micro-organisms, the plant could be considered a pest.

35. With regard to the requirement to undertak e and complete procedures without undue
delay (Annex C(1)(a) of the SPS Agreement):

 (a) What is the object and purpose of this requirement?

59. In Canada's view, the object and purpose of the requirement for WTO Members to undertake
and complete procedures "without undue delay" is similar in purpose to the substantive requirement in
Articles 2.2 and 5.6 of the SPS Agreement not to create unnecessary barriers to trade. In other words,
there is an obligation on the Members to ensure th at their procedures are not only designed, but also
implemented and applied as efficiently and expeditious ly as possible in the circ umstances, without at
the same time compromising the substantive objective of ensuring that SPS measures are fulfilled.

 (b) Is it correct that a delay in the completion of procedures would not result, ipso
facto, in a breach of Annex C(1)(a)? If so, how is a panel to determine when a
delay rises to the level of being "undue"?

60. Canada agrees that a delay in the completion of procedures would not result, ipso facto, in a
breach of Annex C(1)(a). The delay must be " undue". What constitutes "undue delay" must be
assessed in light of all the relevant circumstances.

61. In paragraphs 237 to 244 of its First Wr itten Submission, Canada set out some relevant
considerations for determining whet her a delay rises to the level of being "undue." The ordinary
meaning of "undue delay" suggests that both the ju stification for and the duration of the delay are
relevant considerations in determining whether a delay is undue.
7

62. In terms of duration of the delay, Canada disagrees with the EC's assertion at paragraph 480
of its First Written Submission that time constraints set forth in the relevant approval procedure are
not relevant to a determination as to whether the delay has been excessive. Under Annex C(1)(a), a
Member is obligated to publish the standard processi ng time for an approval procedure. There is no
reason, in law or logic, that such standard processing time should not be considered in determining the
excessiveness of the duration of the delay. Whethe r a product has been previously approved in other

7 The EC agrees with this proposition. EC's First written Submission, para. 479.

jurisdictions and the processing time for those appr ovals in other jurisdictions are also relevant
considerations, although not dispositive, in determining whether the delay is undue.

63. There is, of course, a distinction to be draw n between delays attributable to a Member and
those outside a Member's control. Force majeure , such as the example cited by the EC of an
earthquake destroying the building of a competent authority
8 would fall into the latter category. A
state is not legally responsible for acts of force majeure and should not be held legally responsible for
delays caused by force majeure. However, to Canada's knowledge, force majeure is one excuse that
the EC has not yet raised for the suspension of its approval procedures.

64. Canada also rejects the EC's contention that de lays due to scientific considerations of the kind
that fall outside the SPS Agreement cannot be taken into account in determining a whether a delay is
"undue" under Annex C. This proposition is based on the misguided premise that the reason for the
delay should determine whether the obligations of A nnex C apply. It is not the reason for the delay
but the nature of the approval procedure that determines whether Annex C applies.

36. With respect to those applications origin ally submitted under EC Directive 90/220 and
subsequently "re-submitted" under EC Direct ive 2001/18, did the re-submission of these
applications mark the beginning/opening of a new procedure for the purposes of Annex C(1)(a)
of the SPS Agreement, or is/was there only one sing le procedure? What are the implications of
your reply for the calculation of the length/dur ation of the relevant approval procedure(s)?
Specifically, from what time/event should the le ngth be calculated (e.g., when the original
procedure was initiated under EC Directive 90/220; when the second procedure was initiated
under EC Directive 2001/18)?

65. The approval procedures under Directives 90/220 and 2001/18 constitute a single, continuous
approval procedure for the purposes of paragraph 1(a) of Annex C. The length of time/duration of the
approval procedure should be calculated from the time the notification was first submitted to the
relevant competent authority. In those cases where a notification was initially submitted under
Directive 90/220 and then re-submitted under Dir ective 2001/18, the date of submission under
Directive 90/220 should be considered the date on which the procedure commenced.

66. The conclusion that the approval procedure fo r biotech products is one single procedure is
supported by the text of Directive 2001/18. Firs t, Directive 2001/18 simultaneously repealed and
replaced Directive 90/220. There was no overlap. Second, Article 35 of Directive 2001/18 provides
that "pending notifications" under Directive 90/220 sh all be subject to the new Directive and that
notifiers shall "complement" their notifications by submitting additional informa tion. Third, to find
otherwise would be to allow Members to avoid "undue" delay simply by changing or replacing
regulatory instruments and starting the process anew.

37. With reference to Annex A(1) of the SPS Ag reement, are the parties of the view that
"procedures" and, more specifically, "approval procedures" are SPS measures? If so, are
(approval) procedures as such subject to the requirem ents of Articles 2.2, 5.1, 5.5 and 5.6 of the
SPS Agreement? Why? Why not? In answering this question, please include a discussion of
the second clause of Article 8 ("otherwise ensure that [… ]") of the SPS Agreement and indicate
which are the relevant "provisions of this Agreement".

67. To determine whether the procedures described in the chapeau to paragraph 1 of Annex C are
SPS measures, one must first look to the definition of an "SPS measure" that is found in paragraph 1

8 EC's First Written Submission, para. 481.

of Annex A. That definition quite clearly includes approval procedures, provided that such
procedures are measures applied to protect against th e types of risks outlined in subparagraphs 1(a)
through (d). Articles 2.2, 5.1, 5.5 and 5.6 refer generally to "sanitary and phytosanitary measures",
without in any way distinguishing between "procedures" and other types of SPS measures.

68. This is also consistent with the wording of Article 8, which requires the Members to "observe
the provisions of Annex C in the operation of contro l, inspection and approval procedures", as well as
"otherwise ensur[ing] that their procedures are not inconsistent with the provisions of this
Agreement". The use of the term "otherwise" indicates that the procedures are subject, not only to the
"provisions of Annex C" but also "the provisions of this Agreement". Logically, the "provisions of
this Agreement" must be taken to refer to provisions other than those found in Annex C.

69. Hence, Canada concludes that the types of pr ocedures referred to in paragraph 1 of Annex C
of the SPS Agreement are subject to, not only the obligations found in Articles 2.2, 5.1, 5.5, and 5.6,
but also the other obligations of the SPS Agreement , including, for example, the obligations in
Article 3.

38. With particular reference to the complain ing parties' challenge to various member State
safeguard measures under Article 5.5 of th e SPS Agreement, please answer the following
questions:

 (a) Which is the relevant "Member" for the purposes of the Panel's analysis of the
complaining parties' challenges? Is it: (i) the member State applying the
safeguard measure or (ii) the European Communities as a whole?

70. Although the "measures" in question were ta ken by individual EC Member States, these
"measures" were taken pursuant to EC-wide legislat ion (Article 16 of Directive 90/220; Article 23 of
Directive 2001/18; and Article 12 of Regulation 258/97) . That legislation establishes the appropriate
level of protection for "safeguard" measures taken by the EC Member States.

71. Furthermore, the EC has taken legal respons ibility for the conduct of its Member States and
for the defence of their measures, as reflected, for example, in its defence of France's measure in EC –
Asbestos. For these reasons, the relevant "Member", for the purposes of Article 5.5, is the EC as a
whole, rather than to the individual Member Stat es, notwithstanding the fact that they are also WTO
Members.

 (b) Would it be permissible under Article 5.5 for an EC member State to apply
within its territory, either permanently or provisionally, a higher level of
protection than that which is applied in the rest of the European Communities?

72. There is nothing per se in Article 5.5 that prevents an individual EC Member State from
applying an appropriate level of protection that is higher (or lower) than that which is applied in the
rest of the EC. Whether such action is permitted ca n only be determined with reference to the three
elements necessary for a violation of Article 5.5.

For all complaining parties

39. Do the complaining parties agree with the statement at para. 17 of Norway's written
submission that "modern biotechnology" ref ers to more than just "recombinant DNA"
technology? Please explain what relevance, if any, this difference may have for the issues in this
dispute.

73. In its first submission, Canada used the te rm "modern biotechnology" to refer to recombinant
DNA techniques. However, the term "modern biotec hnology" could be applied to other techniques of
agricultural biotechnology. In any event, this dispute does not turn on the definition of this term.

40. Do the complaining parties agree with Norway arguments at paras. 130-131 of its
written submission that risks associated with th e use of antibiotic resistant marker genes do not
fall within the scope of the SPS Agreement?

74. Canada does not agree with Norway's asserti on. Potential risks arising from the use of
antibiotic resistance marker genes include reduced clinical efficacy of antibiotics used to protect
livestock from diseases, disease-carrying organisms or disease-causing organisms. This falls squarely
within the scope of paragraph 1(a) of Annex A of the SPS Agreement.

41. Do the complaining parti es agree with Norway's statement at para. 130 of its written
submission that plant DNA is not an "organism" and that concerns related to effects on plant
DNA do not fall within the scope of the SPS Agreement?

75. The answer to this question is related to the answer to Question 74. The issue is not whether
plant DNA is an organism or plant DNA causes diseas e, but that the risks arising from the use of
antibiotic resistant marker genes are risks that fall within paragraph 1(a) of Annex A.

42. Do the complaining parties agree with No rway's assertion at para. 141 of its written
submission that " [t]he situation which characterises the present dispute is therefore one where
a lot of scientific research has been carried out on a particular issue without yielding reliable

evidence"? (emphasis in the original) Please explain your views.

76. No. Norway's assertion ignores the considerab le body of scientific evidence complied with
the EC's own scientific committees. The EC's ow n committees have not indicated that there is
insufficient scientific evidence upon which to make scientific justified conc lusions in relation to
particular applications. To the contrary, the EC 's own scientific committees have determined that
there is sufficient and reliable evidence upon which to base their conclusions regarding the safety of
the biotech products in question. Norway's assertion is tantamount to alleging negligence on the part
of the EC's scientific committees.

77. Moreover, Norway's assertion ignores the c onsiderable body of pee r-reviewed scientific
research that has been conducted both within the EC and internationally, including the EC's own
decade long biosafety research project, involving 400 r esearch teams in 81 projects. In the Foreword
to the publication reviewing that research, "EC-S ponsored Research on the Safety of Genetically
Modified Organisms", Sir John Beringer, former Chair of the UK Advisory Committee on Releases
into the Environment, stated:

Is it all doom and gloom? It most certainly is not, as this compilation of results from
81 EC-supported projects on GM safety research demonstrates. One of the "best kept
secrets" during the last few years of acrimonious discussion about GMOs has been
the enormous body of research being conduc ted in Europe and elsewhere that is
directly relevant to risk assessments. For those of us who have been involved in
running GM safety committees in Member St ates there has been a steady stream of

research results that have enabled our co mmittees to improve their ability to make
risk assessments and recommend safe conditions for the release of GMOs.
9
78. Norway's assertion is self-serving and without merit.

43. According to the European Communities, the processing of some applications was
delayed due to exchanges deriving from the requests for voluntary commitments or
amendments of the notifications so that the noti fications would be in line with the requirements
provided for by new legislation. For example, in respect of release into the environment, in the
summer of 1999 a Common Position on the propo sed modification of the Directive was adopted
by the Council, and since then notifiers appear to have tried to address additional concerns
contained in it. The European Communities ci tes similar cases in respect of the novel food
legislation as well. However, there is no ref erence to these cases in the complaining parties'
submissions. Do the complaining parties agree with the European Communities' account? If
so, could they please explain their understanding of these cases? Please explain the relevance of
these cases to your belief that a de facto moratorium existed.

79. However the EC may now wish to characterize the evolution of its regulatory regimes, the
fact remains that the EC's highest officials, as well as numerous EC documents, referred, and continue
to refer, to the fact that applications for approval of biotech products were subject to a "moratorium",
a "suspension" or a "standstill", and to the need to "relaunch" the process. Canada has already
documented this in its written submission and oral statement. These are not terms invented by Canada
to describe this state of affairs; they are terms that originate with the EC itself. Canada's assertion that
a de facto moratorium exists is thus, in part, guided by those who are intimately familiar with, and in
charge of, the EC's approvals processes, and who evidently consider these terms to be an accurate
reflection of the state of affairs in the EC.

80. As to the specifics of the cases cited by the EC , first, Canada finds it curious that the EC
claims that it is entitled, under the WTO Agreement, to withhold indefinitely approval of products for
multiple risk assessments had been done, and for which no scientific evidence of adverse effects on
human health or the environment exists, on the basis of "requirements" that did not even exist in its
own laws at the time the approvals were withheld.

81. Second, even if the companies were comply ing with these extra-legal requirements, their
willingness to do so can hardly be characterized as "voluntary", given their evident desire to move
their products through the approval process. In fact, GATT and WTO jurisprudence has recognized,
albeit in a different context, that "voluntary" ac tions on the part of private sector enterprises can
amount to legal "requirements" where the enterprise in question is effectively left with no choice in
the face of government demands, even where t hose demands do not arise from formal legal
instruments.
10 Canada is not making this point to suppor t a claim that the "voluntary" requirements
imposed on the product applicants are "measures" that are being challenged; ra ther, Canada is merely
noting the elastic qualities of the term "voluntary " and how its true mean ing can only be discerned
through an appreciation of the context in which it is used.

82. The more plausible characterization of the " voluntary commitments" is that the applicants
were told that these were the require ments that they would have to meet if they wanted their products
considered and approved. Put differently, it is at least questionable whether the applications would

9 Exhibit CDA-13, pp. 11-12.
10 Japan – Semi-Conductors, Report of the Panel, paras. 106-111; Japan – Film , Report of the Panel,
para. 10.374.

have been approved – regardless of whether they met the legal requirements in place at the time – if
the applicants had not agreed to comply with the additional or extra-legal re quirements. In effect,
there was little practical choice for the applicants in the matter, with the exception of simply
withdrawing the product applications.

83. Third, to accept that the EC is entitled to impose ever-changing requirements on applicants in
order to have their product applications processed and approved, is to accept that WTO Members can
prevent products from ever being approved, regard less of whether the products actually pose any
risks, simply by continuing to alter the process requirements indefinitely on the basis of vague
concerns about "scientific uncertainty", or th e on-going and never-ending need to "update" or
"modernize" or "streamline" the existing regulatory regime. This would defeat the very object and
purpose of the disciplines put in place through the WTO Agreement with respect to non-tariff barriers
to trade, and could not therefore have been the intention of the drafters.

84. Finally, the simple fact is that even the app licants' efforts to meet th e extralegal requirements
imposed by the EC seem to have had little effect. With the very recent exception of Bt-11, all of these
applications have yet to be approved, and there is no indication that they will be approved at any time
in the near future, despite the fact that Directive 2001/18 has now been in effect for almost two years,
and the EC apparently began to impose its requirements long before that time.

44. Are the complaining parties making any claims in respect of a "failure to consider"
applications (as opposed to a "failure to grant fi nal approval" or a "failure to allow products to
move to final approval")? If so , could they please indicate which, if any, of the applications
referred to in their first written submissions and/or first oral statements in their view constitute
instances of "failure to consider" and why?

85. Juxtaposing the phrases "failure to consider a pplications" and "failure to allow products to
move to final approval" creates a false dichotomy. The EC's de facto moratorium has as its ultimate
intent the prevention of products from being approve d. This is reflected, for example, in the
Declaration of the five EC Member States, and is given effect through a variety of means, at various
stages in the approvals process. The concept of "failure to consider" does not simply refer to
applications being completely ignored; it also refe rs to the timely and efficient completion of all
necessary steps at a particular stag e in the process. Thus, in some cases, at some stages, there is a
"failure to consider applications" in the sense that they are not assessed or evaluated on their merits
and allowed to move on to the next stage. While th ey have not been formally rejected, the fact that
they are held up at that stage amounts to a "failure to consider" them. Of course, this "failure to
consider" contributes to or forms a part of the "failure to allow products to move to final approval".

45. With reference to paras. 2 and 24 of the US first oral statement ("failure to allow
products to move to final approval"), paras. 16 and 40 of Canada's first oral statement
("stalling and blocking of applications at key decision-making stages") and paras. 21 and 26 of
aprobación"), can it be said that the comp laining parties view the alleged moratorium
essentially as a "decision not to decide", for an unspecified period of time, with respect to any
applications for approval, rather than as a "decision to decide negatively" with respect to any
and all such applications?

86. Whether the EC has made a "decision not to d ecide" or a "decision to decide negatively", in
either case, the effect is that products for which the EC's scientific experts have explicitly identified
no evidence of risks of adverse effects to human he alth or the environment are being prevented from
being marketed. Given the limited commercial "she lf-life" for many of these products, due to the on-

going development of new varieties, a prolonged delay – particularly an indefinite delay of many
years – can be equated with a complete denial to approve because of the lost and irretrievable market
opportunities. The reality is that many of these products may never be marketed in the EC because by
the time they receive approval – if they ever receiv e approval – the market will have passed them by.
Thus, whether the product applications are formally rejected, or are simply held up in the system, will
in all likelihood, and certainly for many of these products, amount to the same thing, practically
speaking.

46. Are the complaining parties asserting that the alleged across-the-board moratorium led
to "undue delays" with respect to all applications pending as of the date of establishment of this
Panel, regardless of when these applications were submitted to the relevant member State
authority?

87. The across-the-board moratorium leads to "undue delays" with respect to all applications that
reach critical decision-making junctures in the approval procedures. The fact that certain applications
have not yet reached one of these critical deci sion-making junctures does not mean that such
applications will avoid the effect of the moratorium.

88. Furthermore, Canada recognizes that certain EC Member State competent authorities have
conducted risk assessments and prepared their initia l reports on the basis of sound science (e.g. Bt
cotton (531) application C/ES/96/02). Thus, for any particular application, there may not have been
undue delay at each stage of the approval proce ss. This does not mean, however, that these
applications have not, or will not, eventually experience undue delay.

89. Canada notes, however, that, with respect to the moratorium, the violation of the EC's WTO
obligations does not depend on product applica tions actually experiencing undue delay. The
existence of the moratorium does not depend on whether there are any product applications or
whether pending product applications have faced undue delay if tho se product applications have not
yet reached a critical decision-making juncture.

47. Using the analytical framework presented by Canada at paras. 19 to 26 of Canada's first
oral statement, could the complaining parties indicate briefly how the European Communities
has given effect to the alleged moratorium in re spect of each of the relevant individual product
applications? (see EC first written submission, p. 70 et seq)

90. Please refer to the Annex to this submission fo r a table outlining how the EC has given effect
to the moratorium in respect of each relevant individual product application.

48. With reference, inter alia, to paras. 285 to 297 of the EC first written submission, do the
complaining parties consider that procedural delays would be justified in situations:

 (a) where they are caused by risk consider ations which do not fall within the scope
of Annex A of the SPS Agreement;

91. This depends on the justification for and the dura tion of the delay. If the "risk considerations"
in question are justified on the basis of scientif ic evidence and the length of delay caused by the
assessment of those risks is reasonable in the circumstances, the procedural delays may be justified.

92. Canada disagrees that the justification for de lay to an approval procedure falling within the
scope of the SPS Agreement cannot be examined by a Panel unde r Annex C, if the defending Member
asserts that the delay is caused by "risk considerati ons" that do not fall within the scope of Annex A.

The implication of the EC's argument is that if a delay to an approval procedure that qualifies as an
SPS measure is related to non-SPS considerations, then Annex C would cease to apply to the approval
procedure. This would effectively nullify the ob ligations of Annex C, as a Member could simply
assert that the delay was caused by non-SPS consider ations, precluding a determination as to whether
the approval procedure has been "undertaken and co mpleted without undue delay." The delay being
examined is the delay to the SPS measure, the appr oval procedures. The obligations in respect of
those approval procedures do not cease to apply me rely because those measures are also applied to
protect against non-SPS risks.

 (b) where they have been voluntarily accepted by the applicant;

93. Again, this depends on the circumstances. As set out in Canada's answer to Question 43, it is
doubtful in this case that the applicants had mu ch choice but to comply with the "voluntary"
commitments imposed by the EC in anticipation of revi sions to its legislation if they hoped to secure
approve for their products. The "voluntary" commitments should be viewed as an effective change in
the requirements of the legislation. Any delay ar ising from such "voluntary" commitments should be
assessed in the same manner as one would assess a delay caused by a legislative or regulatory
amendment.

 (c) where the entry into force of new legislation is imminent and the applications
that are pending under the old legislation on the date of entry into force of the
new legislation become subject to the stricter requirements of the new
legislation;

94. In principle, where the entry into force of new legislation is truly imminent, it may be
justified to delay the completion of the approval procedure pending the entry into force of the new
legislation. However, this must be subject to re asonable limits. Several factors should be considered,
including, the length of time before which the new legislation enters into force; the purpose of the
"stricter requirement" (i.e. if the stricter requirement is a measure applied to protect human, animal or
plant life or health, then such a delay may be c onsidered reasonable; however, if the stricter
requirement was not necessary to protect human, animal or plant life or health, then the delay may not
be reasonable); whether or not compliance with th e "stricter requirement" could have been achieved
under the existing legislation; and the amount of time the application has been pending under the old
legislation.

 (d) where they are not attributable to a Member (e.g., where they have been caused
by the applicant);

95. Where the applicant has caused the delay, a delay in the completion of the approval procedure
would be justified.

 (e) where they are necessary in order to ensure compliance with existing legislation
and relevant international standards (e.g., Codex Principles; see Exhibit EC-44);

96. It depends on the nature of the "existing legi slation". If the existing legislation was the SPS
measure containing the approval procedure, and that existing legislation was consistent with the SPS
Agreement, then procedural delays that were "necessar y in order to ensure compliance" with the
existing legislation would be justif ied. However, if the existing legislation was unrelated to the
approval procedure, then the delay may not be justified.

97. To the extent that the Member has incorporat ed the relevant international standard into its
domestic law, the same considerations as with "e xisting legislation" apply. Where a relevant
international standard has not been adopted, Canada fails to see how the standard is relevant to an
approval procedure under Annex C.

 (f) where they result from efforts to elab orate monitoring requirements, adequate
agricultural practices and similar efforts to manage SPS risks?

98. To the extent that risks that need to be managed are identified based on relevant scientific
evidence, the elaboration of risk management tool s for such risks is a legitimate component of the
approval procedure. However, the risk management tools must be tailored to the actual risks of the
product in question, developed in a manner consistent with Annex C, including the stipulation that
"any requirements for control, inspection and a pproval of individual specimens of a product are
limited to what is reasonable and necessary" and must not be arbitrary and result in discrimination or
a disguised restriction on international trade. For instance, the need for a monitoring plan for biotech
products for which an application has been s ubmitted for import and processing only, but not
cultivation, may not be "reasonable and necessary". Such risk management measures must also
comply with all other relevant provisions of the SPS Agreement. To the extent that risk management
tools are legitimate, they should be developed in an open and transparent fashion within a reasonable
timeframe.

 Would any of the above situations justify (i) the alleged across-the-board moratorium
and; (ii) the alleged product-specific delays referred to in the complaining parties' submissions?

(i) No. (ii) No.

49. With reference to paras. 440 and 441 of the EC first written submission, it appears that
the European Communities is arguing, in eff ect, that the SPS Agreement would apply to a
measure (a legal provision, etc.) to the extent that measure pursues SPS objectives as defined in
Annex A(1) of the SPS Agreement, and that the TBT Agreement would simultaneously apply to
that same measure (legal provision, etc.) to the extent that measure is a technical regulation
which does not pursue SPS objectives. Do the comp laining parties agree with this argument? In
answering this question, please address the provisions of Article 1.5 of the TBT Agreement.

99. The EC appears to be trying to engage in a very complicated metaphysical exercise when it
states in paragraph 441 of its First Written Subm ission that "a measure that pursues multiple
objectives must be considered to be a series of meas ures". This raises the very difficult question of
what constitutes a discrete "measure". For example, can or must a single provision (e.g., an Article,
or a paragraph or a subparagraph, whatever the case may be) in a legislative or regulatory instrument,
which sets out a singular and discrete legal require ment or burden, be considered as a single or
indivisible "measure" even if the objective or purpose underlying that provision is multifaceted? The
EC seems to believe not only that it can, but also that it must, be divided on the basis of those
objectives, at least in the case of the SPS Agreement and TBT Agreement.

100. The text of Article 1.5 of the TBT Agreement states that it does not apply to SPS measures as
defined in Annex A of the SPS Agreement . This does not assist in resolving the more discrete
question of whether a single or "indivisible" me asure taken for both SPS an d non-SPS reasons can be
considered as both an SPS measure and a non-SPS measu re, or whether, as the EC contends, it "must
be considered to be a series of measures. On balanc e, Canada is of the view that a hermetic approach
to the SPS Agreement and the TBT Agreement , respectively, is probably neither valid from an
interpretive standpoint, nor useful from a practical perspective. A Member's measure is an SPS

measure to the extent that it addresses SPS risks; to the extent that it addresses other risks or policy
objectives, it is another type of measure, including, possibly, a TBT measure. Whether a measure that
addresses both SPS risks and other types of risks or policy objectives should be considered a single
measure or a "series of measures" is purely semantic.

101. In any event, it is not necessar y to resolve this issue in order to answer the questions that are
before this Panel. It seems clear that all the Pa rties agree that a measure taken for reasons having to
do with the definition of an SPS measure in Anne x A must be examined in the light of the
requirements of the SPS Agreement . As a consequence, if that measure does not meet those
requirements, it gives rise to a violation of one or more of the provisions of the SPS Agreement. The
fact that the measure might also have a TBT dime nsion and may even be TB T-consistent would be
entirely beside the point because consistency with one Agreement cannot operate to excuse or remedy
a violation under another Agreement.

102. More to the point, the EC has not identified any risks – whether TBT or SPS – that would
justify delaying the approval of the specific products that are the subject of Canada's complaint. To
the extent that risks have been identified, they ha ve been addressed in the EC's own risk assessments,
which found no evidence that these products are likely to cause adverse effects to human health or the
environment.

50. With reference to Article 5.7 of the SPS Agreement, do the complaining parties agree
with the European Communities that:

 (a) Article 5.7 excludes the applicability of Article 5.1 and is not an exception
(affirmative defence) to Article 5.1 (EC first written submission, para. 575)? In
answering this question, please address the relevance of the Appellate Body
Reports on Japan – Apples (footnote 316), EC – Hormones (para. 104) and EC –
Sardines (para. 275) and Japan – Agricultural Products II (paras. 86 et seq);

103. Canada fails to see how the simple invocation of Article 5.7 – even as a "threshold" argument
– can act to exclude the applicability of Article 5.1. As Canada noted in its oral statement, the issue is
not the provisional nature of the measure – a clai m, by the way, that the EC has asserted but, in
Canada's view, not demonstrated – but whether the "relevant scientific eviden ce is insufficient" to
allow for an objective assessment of risk.

104. In Japan – Apples , Japan argued that sufficient scientif ic evidence existed to maintain the
measure under Article 2.2. The United States argue d the opposite. Importantly, the United States did
not, in its initial claims and arguments, assert that Ar ticle 5.7 did not apply to the measure at issue in
that dispute. Japan invoked Article 5.7 as an a lternative argument that, if the panel found that
sufficient scientific evidence did not exist, then the measure was captured by Article 5.7 and therefore
exempted from the primary requirement in Article 2.2 not to maintain measures without sufficient
scientific evidence. The same approach was used by both the United States and Japan in Japan –
Agricultural Products II. In neither case did the United States argue the inapplicability of Article 5.7
as part of establishing its prima facie case of a violation of Article 2.2. Evidently, neither the United
States, nor Japan, nor the panels, considered that making out a prima facie case under Article 2.2
required also the explicit demonstration that the requ irements of Article 5.7 had not been met. Had
that been the case, then presumably the Unite d States would have failed to establish its prima facie
case and a violation of Article 2.2 would not have been made out. Clearly, that is not what happened.

105. Establishing a prima facie case under Article 2.2 that a measure is being maintained without
sufficient scientific evidence can be demonstrated in at least two ways. One way is to demonstrate

that no risk assessment exists that meets the requi rements of a "risk assessment" as defined in the SPS
Agreement. Another way is to demonstrate the absence of any risk assessment on which the measure
in question can reasonably said to be based.

106. To the extent that there is a relationship betw een Article 5.1 and Article 5.7, that relationship
stems from the requirement in Article 2.2 not to maintain a measure wit hout sufficient scientific
evidence. In the case of Articles 5.1 and 2.2, the cen tral issue is whether there is sufficient scientific
evidence to support the measure at issue. In contrast , in Article 5.7, the central issue is whether there
sufficient scientific evidence to conduct an objective assessment of the risk. Where there is sufficient
scientific evidence for an objective assessment of the risk, in accordance with Article 5.1 that
assessment must serve as the basis for the measure, that is, it must sufficiently support or reasonably
warrant that measure.

107. As Canada has already demonstrated, the pr oducts subject to the EC Member State national
measures have already been the subject of multiple risk assessments, and have already been approved
for marketing throughout the EC. This proves, prima facie, that the relevant scientific evidence was
sufficient, not only to conduct an objective assessment of the risk, but to come to the conclusion that
there was no evidence that these products were likely to give rise to any adverse effects to human
health or the environment. To put it slightly di fferently, the risk assessments conducted by the EC's
own experts must have demonstrated to the satisfaction of the EC itself that no scientific evidence
existed to justify denying these pr oducts approval for marketing within the EC. Otherwise, the EC
would presumably not have approve d the products in the first pl ace, and equally presumably would
not now be asking the EC Member States to withdraw the national bans.

108. With respect to the current Appellate Body jurisprudence on Article 5.7, Canada is of the
view that none of the passages referred to by the Panel in the four reports provide only limited
guidance in addressing the question of the allocation of the burden of proof.

109. The relevant paragraphs in Japan – Agricultural Products II do not address the basic issue of
burden of proof at all. In that case, Japan had i nvoked Article 5.7 as a defence in the face of a finding
that the United States had discharged its burden of proof in demonstrating a violation of Article 2.2.
The issue addressed in the relevant paragraphs was whether Japan had met the requirements of the
four elements set out in Article 5.7. The refe rence to the burden of proof in footnote 316 of the
Appellate Body report in Japan – Apples provides no information other than the Appellate Body's
confirmation that the assignment of the burde n of proof was not being appealed. In EC – Sardines ,
the Appellate Body expressly noted the "conceptu al similarities between, on the one hand,
Articles 3.1 and 3.3 of the SPS Agreement and, on the other hand, Article 2.4 of the TBT Agreement"
in finding "no reason why the Panel should not have relied on the principle [the Appellate Body]
articulated in EC – Hormones to determine the allocation of the burden of proof under Article 2.4 of
the TBT Agreement". The conceptual similarity in that ca se was the fact that Articles 3.1 and 3.3 of
the SPS Agreement, and Article 2.4 of the TBT Agreement all deal with the obligation to base
measures on international standard unless a valid reas on exists to depart from those standards. As
described in more detail below, no such "concep tual similarity" exists between Article 5.7 and
Articles 3.1 and 3.3.

110. Finally, and perhaps most tellingly, in EC – Hormones , the Appellate Body found that the
"general rule – exception" relationship did not apply to Articles 3.1 and 3.3 of the SPS Agreement in
the manner that it does in the case of, for example, Articles III and XX of the GATT 1994. The
Appellate Body noted that the panel had misconceived the relationship because:

Article 3.1 of the SPS Agreement simply excludes from its scope of application the
kinds of situations covered by Article 3.3 of that Agreement, that is, where a Member
has projected for itself a higher level of sanitary protection than would be achieved by
a measure on an international standard.
11
111. This is not the case with respect to Articles 2.2 and 5.1, and 5.7. In effect, Article 5.7
operates as an exception to Articles 2.2 and 5.1. It is an exception because it allows a Member to
maintain a measure without sufficient scientific evidence, on the specific grounds that sufficient
scientific evidence to complete on objective assessment of risk does not exist. Thus, the application
of Article 5.7 logically only arises where it has been determined that a measure is maintained without
sufficient scientific evidence, which, unless justified under Article 5.7, would amount to a violation of
Article 2.2. Unlike Articles 3.1 and 3.3, which a llow the Members to choose which track to follow in
the light of the appropriate level of protection sough t to be achieved, Article 5.7 does not operate as
an option for the Members to choose in place of Articl e 2.2. If sufficient scientific evidence exists to
conduct an objective risk assessment, then Article 5.7 is simply not available.

112. In this context, the relationships between Articles 3.1 and 3.3 of the SPS Agreement, and the
first and second parts of Article 2.4 of the TBT Agreement, as compared to the relationship between
Article 5.7 on the one hand, and Articles 2.2 and 5.1 on the other hand, are irrelevant.

 (b) Article 5.6 is not "relevant" wh ere Article 5.7 applies (EC first written
submission, para. 612);

113. Canada disagrees with the EC's assertion that Article 5.6 is irrelevant where Article 5.7
applies. Moreover, the EC makes this asserti on without any supporting textual analysis or
jurisprudential support. There is nothing in the text of Article 2.2, Article 5.6 or Article 5.7 to support
such an interpretation. Furthermore, in Japan – Agricultural Products II , the Appellate Body noted
that Article 5.7 operates as "a qualified exemp tion from the obligation under Article 2.2 not to
maintain SPS measure without su fficient scientific evidence".
12 It did not state that the exemption
extended to Article 2.2 as a whole. Given the relationship between Article 5.6 and the first element of
Article 2.2, it is therefore logical to conclude that the exemption also does not extend to Article 5.6.

 (c) Article 5.7 "effectively" excludes Article 5.5 (EC first written submission,
para. 618)?No, there needs to be consistency, the acceptable level of protection
must still be taken into account.

114. The EC makes the bare assertion that Article 5.7 of the SPS Agreement contains an express
rule that effectively excludes Article 5.5 but fails to indicate what that rule is or where exactly it may
be found. It then asserts, once again without any supporting evidence or textual analysis, that the
operation of Article 5.7 necessarily excludes the remainder of Article 5 as a whole.

115. Neither assertion can withstand scrutiny. Ther e is no language in Article 5.7 that reasonably
lends itself to a finding that the application of Article 5.5 is effectively excluded if Article 5.7 applies
– and, in any event, as has already been made cl ear, Canada in no way concedes that Article 5.7 does
apply in this case. In fact, there is no logical or textual connection to be made between these two
provisions.

11 EC – Hormones, Report of the Appellate Body, para. 104.
12 Para. 80 (emphasis added).

116. Article 5.7 is connected to Article 2.2. Fu rthermore, based on the Appellate Body's statement
in Japan – Agricultural Products II , quoted in Canada's answer to part (b) of Question 50, that
connection appears to be limited to the third elemen t of Article 2.2, that is, the requirement not to
maintain a measure without sufficient scientific evidence.

117. In contrast, the obligation in Article 5.5 do es not find its general expression in Article 2.2 at
all. It is found in Article 2.3. Article 2.3 does not mention Article 5.7. In fact, Article 2.3 -- and
therefore Article 5.5 – concerns itself with issues th at are very different as compared to the issues
addressed in Article 2.2. These issues have to do with discrimination and disguised restrictions on
trade, and consistency of application in the concept of appropriate levels of sanitary and phytosanitary
protection. Setting or applying appropriate levels of protection is essentially a policy matter.

118. In short, there is no reason – whether based on th eir respective texts or on the internal logic of
Articles 2.2, 2.3, 5.5 and 5.7 – for concluding that Article 5.7 can result in the exclusion of the
application of Article 5.5.

 (d) the sufficiency of relevant scientific evidence depends, inter alia, on a country's
level of protection and the nature of the risks (e.g., reversibility of damage)? (see
EC first written submission, paras. 605-606).

119. Canada does not agree with the EC's characterization of what constitutes "sufficient scientific
evidence".

120. First of all, it is not clear whether the EC is referring to the term as used in Article 2.2, or as
used in Article 5.7. The term as used in Article 2.2 is relevant to an interpretation of Article 5.1.

121. In the context of Article 2.2, the sufficiency of the scientific evidence relates to whether it
adequately supports the measure taken. As has been noted in the jurisprudence, the ordinary meaning
of "sufficient" is "of a quantity, extent, or scope adequate to a certain purpose or object".
13 With
respect to the requirements of Article 2.2 and Article 5.1, this means that there must exist a rational or
objective relationship between the SPS measure and the scientific evidence. This is to be determined
on a case-by-case basis and will depend on the partic ular circumstances of the case, including the
characteristics of the measure at issue and the quality and quantity of the scientific evidence.

122. In the context of Article 5.7, the referen ce to insufficient scientific evidence goes to the
determination as to whether that provision is availa ble to exempt the measure in question from the
requirement under Article 2.2 not to maintain a measu re without sufficient scientific evidence. In
other words, the sufficiency of the scientific ev idence goes to the question of whether there is
adequate scientific evidence to make an objective assess ment of risk. If there is sufficient scientific
evidence to make an objective assessment, then Artic le 5.7 would not be available, and the measure
would have to conform to the requirements of Article s 5.1 and 2.2, third element. There would be no
need, and therefore no justification, for a provisional measure taken pursuant to Article 5.7.

123. Furthermore, the appropriate level of protecti on is a matter that goes, not to whether there is
sufficient scientific evidence to make an objective assessment of risk, but the selection of the measure
to address any risks disclosed by the scientific evidence. This is also true for the nature of the risks.

13 EC – Hormones, Report of the Appellate Body, para. 187.

51. Concerning the complaining parties' clai ms in respect of the various member State
safeguard measures, are those measures "c ases where relevant scientific evidence is
insufficient" within the meaning of Article 5.7 of the SPS Agreement?

124. According to the EC's own scientific comm ittee opinions, which considered the information
provided by the EC Member States in support of their national bans, these were not cases where there
was "insufficient scientific evidence". These comm ittees found that sufficient scientific evidence was
available to them to complete their assessments, a nd to come to a favourable opinion with respect to
the biotech products in question. The EC has not provided any scientific rationale to demonstrate the
absence of sufficient scientific evid ence or, more generally, to support the continued maintenance of
these measures. To the contrary, it has officially re quested the Member States in question to lift their
national bans.

52. Do the complainants agree with the definiti on of "an adequate ri sk assessment" as put
forward by the European Communities in the last sentence of para. 604 of its first written
submission?

125. Canada agrees with the EC's earlier stat ement in paragraph 604 of its First Written
Submission, in which it quotes the Appellate Body to the effect that a risk assessment is a "process
characterized by systematic, disciplined and objective enquiry and analysis, that is, a mode of
studying and sorting out facts and opinions,…". It is Canada's understanding that this is exactly what
is supposed to be done by the Competent Authorit y of the Member State where a product application
originates, and the independent scientific committees (such as the Scientific Committee on Plants).

126. By contrast, the definition put forward by th e EC in the last sentence of paragraph 604 has
several problematic elements. First, it states that an adequate risk assessment is one prepared by a
"reputable source". It is unclear what the EC means by this term. If the EC intends it to be
synonymous with "qualified and respected", as used by the Appellate Body in EC – Hormones ,
14
Canada would agree. In any event, Canada has to assume that the scientific experts chosen by the EC
and its Member States to conduct their risk assessments are "reputable".

127. Of equal importance are the standards of sci entific methodology applied to the collection and
analysis of the data. The quality of a risk assessmen t must rest on the reliabi lity of the data and the
professionalism and independence that the risk assessor brings to the task of analysing that data.

128. The second problematic element in the EC's de finition is its assertion that an adequate risk
assessment "unequivocally informs the legislator" about the risk. Again, the meaning of this phrase is
unclear. In any event, the vast majority, if no t all, of the risk assess ments produced by the EC
scientific community for individual product applic ations are unequivocal in their conclusions, and
state clearly their findings, without expressing any significant concerns about ambiguity or absence of
key data. It seems, however, that there is no re lationship between how the EC "legislators" have
treated the applications, and the unequivocal and pr ecise risk assessments provided to them by the
independent scientific experts. No matter what th e scientific experts have said, the legislators have
found themselves unable to act – that is, to decide – on the product applications.

129. The third problematic element in the EC's de finition is its assertion that an adequate risk
assessment is one that "has withstood the passage of time". Certainly there is nothing in the definition
of "risk assessment" in paragraph 4 of Annex A of the SPS Agreement to indicate that the adequacy of
a risk assessment is dependent on any passage of time. On the contrary, it is only if there is

14 EC – Hormones, Report of the Appellate Body, para. 194.

insufficient scientific evidence for an objective assessment of the risks, in accordance with Article 5.7
of the SPS Agreement , that the passage of time becomes relevant. In those circumstances, time
becomes a factor in so far as the Member mainta ining the provisional measure must review that
measure within a reasonable period of time. In cont rast, where there is sufficient scientific evidence
for an objective risk assessment to be carried out – and all indicators in the present case support the
proposition that the scientific evidence available to the EC's risk assessors was sufficient for their
purposes – it is impossible to understand how the objectives of the SPS Agreement could be served if
a Member could fail to act on the basis of a favourable risk assessment of a product while awaiting the
passage of some unspecified period of time.

130. In the circumstances of this cas e, when most, if not all, of the product applications in issue
have languished despite receiving favourable risk assessments, it is not surprising that the EC would
advance such an obviously self-serving criterion to determine the adequacy of a risk assessment.
However, Canada doubts very much that the EC would advocate that product applications by EC
companies in other WTO Member jurisdictions should also be held up for many years while
regulators in those Member jurisdictions wait for the completed risk assessments to "withstand the
passage of time".

131. In any event, in the instant case, Canada h as demonstrated that there are no risk assessments
that support a complete moratorium on approvals. Likewise, there are also no risk assessments that
support the refusal of the EC to approve the four product applications listed in Annex II of Canada's
Request for the establishment of a panel in this dispute.

To Canada

59. Could Canada please submit a copy of Commission Recommendation 97/618?

132. Commission Recommendation 97/618 has al ready been submitted as Exhibit CDA-24.
Please advise if additional copies are required.

60. With reference to para. 86 of Canada's fi rst written submission, does Canada agree with
the European Communities that the applicat ion concerning GT73 which was submitted to
France in 1995 was not later re-submitted under EC Directive 2001/18? (see EC first written
submission, para. 287) If so, what is the rele vance of this application to Canada's claim in
respect of what it calls "product-specific marketing bans"?

133. Canada agrees that the application concerning GT73 submitted to France in 1995
(C/F/95/06/01) was not re-submitted under Directive 2001/18. In a letter dated January 15, 2003 to the
French competent authority, Monsanto wrote "As a consequence of the prolonged inaction on this
notification from the French Competent Author ity, Monsanto is focusing its commercial and
regulatory activity on supporting th e cultivation of GT-73 oilseed rape outsider the EU and, as a
consequence, we have elected not to longer pu ruse the notification C/F/95/06/01 under Directive
2001/18/EC." (Exhibit EC-79).

134. This is relevant to Canada's claim because it demonstrates that if the delay is long enough, it
has the effect of discouraging applicants from con tinuing with their applications. A lengthy delay
causing an applicant to discontinue an application in frustration may be less overt and direct than a
marketing ban, but it is no less effective.

61. With reference to para. 42 of the US oral statement, is the United States correct in
stating that "the co-complainants here are not saying that a pattern of decisions itself constitutes

a measure. Instead, the co-complainants have pointed to an unbroken pattern of [non-]
decisions as the inevitable result of the moratorium, which is itself an independent measure"?

135. Yes, the United States is correct. While th e moratorium consists of concerted acts and
omissions by the EC and its Member States, it is mo re than "an unbroken pattern of [non-]decisions".
The ultimate intention behind the moratorium is the prevention of biotech products from being
approved. The "unbroken pattern of [non-] decisions " is the manner in which the EC and its Member
States have given effect to the moratorium, or, using the US terminology, the "result of the
moratorium."

62. With reference to para. 207 of Canada's first written submission, is it Canada's position
that if the European Communities wished to apply a higher level of protection, it would have to
apply that higher level of protection also to biot ech products that have already been approved,
such that, for some products, the approval might have to be revoked?

136. Article 5.5 requires that each Member avoid ar bitrary or unjustifiable distinctions in the level
of protection that it considers appropriate in comparable situations if they result in discrimination or a
disguised restriction in international trade. Biotech products for which applications for approval were
made to the EC after the imposition of the morato rium are in a comparable situation to biotech
products approved for marketing in the EC prior to the imposition of the moratorium. Canada has
shown that the apparent distincti on in the appropriate levels of pr otection the EC has applied to these
two categories of products is arbitrary and unjustifia ble, and results in discrimination or a disguised
restriction on international trade. As there is no basis for holding product applications affected by the
moratorium to a higher appropriate level of protecti on than that applied to products approved prior to
the imposition of the moratorium, to avoid a violation of Article 5.5 the EC must apply the same
appropriate level of protection to the pre-moratorium biotech products and biotech products subject to
the moratorium, whatever that level of protection is. If the EC therefore wants to impose a higher
level of protection on more recent biotech products, it would also have to do so in respect of the
products approved prior to the imposition of the moratorium.

63. With reference to paras. 293 to 295 of Canada's first written submission:

 (a) Please address in more detail at what stage in the relevant procedure "delays"
arose, and why they are considered "undue".

137. Please see Canada's response to Question 47.

 (b) Is it correct that some of the alleged delays occurred prior to October 1998, i.e.,
before the alleged across-the-board morato rium was applied? If so, are these
delays relevant in the light of Canada's statement that the "product-specific
marketing bans are a direct consequence of the moratorium"? (Canada's first
written submission, para. 255)

138. It is correct that some of the alleged dela ys occurred prior to October 1998 (e.g. Ms1/Rf1 and
Ms1/Rf2 were approved by the Commission in J une 1997; the first notification for GT73 was
submitted to the competent authority of France in Ma y 1995). Whatever the motivation of France
prior to October 1998, these products were the vict ims of the moratorium after October 1998 as much
as any products. For the period of the moratorium, the product-specific marketing bans were a direct
consequence of the moratorium as applied to individual product applications.

64. With reference to paras. 301 to 303 of Cana da's first written submission, could Canada
please clarify whether it is challenging the alle ged "product-specific marketing bans" as "laws,
regulations or requirements" in their own right (sub-heading a)) or as instances of application
of "laws, regulations or requirements", specifically, of EC Directives 2001/18 and 90/220 and
Regulation 258/97?

139. Under the GATT 1994, Canada is challengi ng the product-specific marketing bans as the
application of "laws, regulations or requirements" . The "laws, regulations or requirements" in
question are Directives 90/220 and 2001/18, and Regulation 258/97. Paragraphs 301 to 303 are
intended to demonstrate that the product-specific ma rketing bans are instances of the application (or,
more accurately, the mis- or non-application) of th e relevant legislation, including the prohibition on
the marketing of unapproved biotech products.

65. With reference to paras. 326 to 331 and 335 to 336 of Canada's first written submission,
could Canada please clarify whether it is cha llenging the alleged "product-specific marketing
bans" as "technical regulations" in their ow n right (sub-heading a)) or as instances of
application of "technical regulations", specifi cally, of EC Directives 2001/18 and 90/220 and
Regulation 258/97?

140. As Canada has now explained in its answer to Question 10, in the alternative to its arguments
with respect to the SPS Agreement, Canada is arguing, at paragraphs 326 to 331 of its First Written
Submission that the EC's relevant legislative instruments – that is, Directives 90/220 and 2001/18, and
Regulation 258/97 – contain both technical regula tions and conformity assessment procedures.
Canada is also arguing that the product-specific mark eting bans are technical regulations in so far as
they amount to the application (or, more accurately , the mis- or non-application) of these legislative
instruments.

66. With reference to paras. 361 to 363 of Cana da's first written submission, could Canada
please confirm that it is challenging the allege d "product-specific marketing bans" as instances
of application of conformity assessment proced ures, specifically, of EC Directives 2001/18 and
90/220 and Regulation 258/97?

141. That is correct.

67. With reference to para. 381 of Canada's first written submission, please explain when /
at what point a delay becomes a ban.

142. The EC's own pre-marketing approval re quirement effectively imposes a prohibition on
biotech products until those products are found to be safe and, accordingly, approved. The
moratorium effectively extends that ban or prohib ition indefinitely. To be clear, Canada is not
challenging the pre-marketing approval requirement , as such. But it is challenging a measure – the
moratorium – that converts that pre-marketing ap proval requirement into a complete, rather than
conditional, ban.

143. There are other considerations that contribute to the characterization of the moratorium as a
ban rather than a delay. For example, a measure that departs to such a significant degree from the
approval procedure in question – that is, moving from approvals based on risk assessment to no
approvals regardless of the scientific evidence -- can more properly be characterized as a mis- or non-
application rather than a "slow" application of the relevant legislation. Furthermore, when there is
clear evidence of concerted action on the part of th e EC Member States to conspire to prevent the
approval of biotech products, regardless of their merits in terms of actual risks to human health or to

the environment, and not a single biotech product is approved for more than five years, it is more
appropriate to speak of a ban rather than a mere dela y. Finally, it is especially telling that the EC's
own most senior officials have not referred to a "del ay" in approvals, but rather, to a "moratorium", a
"suspension", and a "standstill". Under the circumstan ces, and in the light of all the evidence, a "ban"
rather than a mere "delay" is the more accurate description of the situation.

144. Even if one were to speak of a "delay", Canada considers that, in this particular case, referring
to "delay" rather than a "ban" is, practically speak ing, a distinction without a difference. As was
noted by Canada in its reply to Question 45, the limited commercial life – and therefore value – of
these products means that any prolonged delay – par ticularly an indefinite delay that has already
lasted many years – can be equated with a complete denial to approve because of lost and irretrievable
market opportunities. Thus, whether these products are formally rejected, or are simply held up in the
system, will, in all likelihood, amount to the same thing.

145. The WTO itself recognizes this problem, in a different context, in having special, expedited
dispute settlement procedures for perishable goods. Of course, Canada is not seeking to imply that
biotech products are "perishable goods" in the sense me ant by that term as used in Article 4(8) and
4(9) of the DSU, but the idea is the same.

68. With reference to paras. 476 to 480 of Cana da's first written submission, could Canada
please confirm that it is challenging the relevant member State safeguard measures as
"technical regulations" in their own right?

146. Canada confirms that it is challenging the EC Member State national measures as "technical
regulations" in their own right.

69. With reference to para. 655 of the European Communities' first written submission, is
the European Communities correct in arguing that Article 2.1 of the TBT Agreement only
applies "to differences in treatment between pr oducts that are covered by the technical
regulation in question"?

147. No. Canada does not agree with this interpretation.

148. First, the EC appears to be drawing an unwarranted distinction between the technical
regulation itself, and the application of that t echnical regulation, and suggesting that only the
application of the technical regulation is subject to the obligation in Article 2.1 of the TBT Agreement.
There is no textual or jurisprudential basis for drawing such a distinction.

149. Second, the text of Article 2.1 does not speci fy that a comparison of "like products" can only
be conducted with reference to produc ts covered by the same technical regulation. Likewise, while it
may be true that "there will always be a differen ce in treatment between produc ts that fall within the
technical regulation and those that do not", this h as nothing to do with whether two products can be
considered "like" or not. In any event, the rationa le for such different treatment may be a reason to
argue that such products are not "like", but it is not a reason to disqualify certain products from the
analysis in the first place.

150. Third, the EC mischaracterizes the thrust of Article 2.1 when it states that "it makes no sense
that a technical regulation must accord no less favour able treatment to products to which it does not
apply as it does to products to wh ich it does apply". Article 2.1 addresses the discriminatory use of
technical regulations as non-tariff barriers. The pur pose of Article 2.1 is to ensure that technical
regulations are not used to favour or have the e ffect of favouring domestic products over their like

imported counterparts. The impositi on of a requirement in the form of a technical regulation against
imported products and not against like domestic products is precisely the sort of discriminatory
treatment prohibited by Article 2.1. If this sort of discrimination were found not to fall within the
scope of the obligation in Article 2.1, WTO Me mbers could accord less favourable treatment to
imported products by subjecting them to technical re gulations to which they did not subject their own
like products. This cannot have been the intention of the drafters of the TBT Agreement.

151. In this particular case, the issue is wh ether it is acceptable under Article 2.1 of the TBT
Agreement to prohibit the marketing of corn/maize or canola/oilseed rape (colza) products with
certain characteristics, while permitting the mark eting of their domestically-grown non-biotech
counterparts, when the available sci entific evidence demonstrates clearly – and to the satisfaction of
the EC's own scientific experts – that the biotech varieties are no more risky than the non-biotech
varieties.

70. With reference to paras. 357 and 359 of Ca nada's first written submission, why is it
necessary to consider the first tw o of the three factors referred to at para. 359? Why would it
not be sufficient to determine whether the confor mity assessment procedure, or its application,
is more trade-restrictive than is necessary to fu lfil "the objective of ensuring that products
conform with" a requirement, as para. 357 appears to suggest?

152. The three elements set out in paragraph 359 of Canada's First Written Submission were
enunciated in the context of the application of Article XX(d) of the GATT 1994 to a measure, and
more specifically to the interpretation of the word "necessary". This word also appears in
Article 5.1.2 of the TBT Agreement , albeit in the context of a provision addressing disciplines on
procedural requirements. While there is no reason to believe that the ordinary meaning of the word
"necessary" in the context of Article 5.1.2 of the TBT Agreement is any different than its meaning in
Article XX(d) of the GATT 1994, the Appellate Body did indicate in Korea – Beef that the term was
capable of a range of meanings, ranging from "indi spensable" to "convenient" or "appropriate to the
end sought".

153. Given that the term "necessary" as used in Ar ticle 5.1.2 is not linked to a measure, as such,
but to the application of the conformity assessme nt procedure, the three elements set out in Korea –
Beef necessarily will require some adjustments in terminology. Thus, where Korea – Beef refers to
"the relative importance of the common interests or values that the measure is intended to protect",
the word "measure" should be replaced by "the app lication of the conformity assessment procedure".
The same adjustments apply to the other two elements.

154. Canada noted in para graph 357 of its First Written Submission that the concept of necessity is
relational. It focuses on the preservation of proporti onality between the trade-restrictive effect arising
from the application of the conformity assessment procedure and the underlying purpose of ensuring
conformity.

155. In light of the foregoing, the first two elem ents set out in paragraph 359 effectively provide
guidance to the interpreter for assessing the underlying purpose, and the extent to which that purpose
is being fulfilled through the app lication of the conformity assessment procedure. The third element
provides the counterbalance, that is, the relative restri ction on trade that is caused by that application.
Where the underlying purpose of the application of the conformity assessment procedure is highly
important in the sense that non-conformity leads to serious consequences, such as threats to human
health or safety, and the procedure makes a central c ontribution to the avoidance of such threats, then
it may be justifiable to enforce the procedure in a manner that is highly restrictive to trade.
Conversely, where the application of the proce dure makes no demonstrable contribution to the

underlying policy objective that is reflected in the technical regulation against which conformity is
being assessed, it is not justifiable for that mode of application to have a significant negative effect on
trade.

156. In this particular case, the product-specific ma rketing bans have influenced or affected the
application (or mis-application) of the conformity assessment procedure. The question that arises is to
what extent this application (or mis-application) of the conformity assessment procedure can be said
to be "necessary" in the sense described above and in paragraphs 357 to 363.

71. With reference to Article 5.2.1, first clau se, of the TBT Agreement, is there a difference
between a requirement to undertake and complete a procedure "as expeditiously as possible"
and a requirement to undertake and complete a procedure "without undue delay" (see
Annex C(1)(a) of the SPS Agreement)? For instance, is it possible that a procedure has not been
completed as expeditiously as possible, but th at this nevertheless did not entail any undue
delay?

157. Canada considers that, in principle, th ese two phrases are intended to reflect the same
concept. There is no reason in principle, logic, te xtual construction, or the negotiating history of the
two provisions, to suggest that they were intended to give rise to different obligations. This view is
also supported by the fact that, in each case, the pr ovision that follows (paragraph 1(b) of Annex C,
and Article 5.2.2 of the TBT Agreement ) uses essentially the same language in elaborating on the
requirements entailed by the concepts of "without undue delay" and "as expeditiously as possible".

158. At the same time, Canada notes that whether a procedure is completed "without undue delay"
or "as expeditiously as possible" must be determined on a case-by-case basis, and with regard to the
specific requirements of the SPS Agreement on the one hand, and the TBT Agreement on the other
hand.

72. With reference to para. 478 of Canada's fi rst written submission, could Canada please
indicate how the text of each of the relevant member State safeguard measures supports its view
that these measures specify which characteristics products must not exhibit in order to be
placed on the market rather than identifying sp ecific products which must not be marketed or
imported?

159. In each case, the measure refe rs to the specific genetic characteristic as the basis for the
prohibition, rather than the particular species in qu estion. For example, the French measures refer to
canola/oilseed rape (colza) containing the events T opas 19/2 and Ms1/Rf1. The effect is that, for
canola/oilseed rape (colza) to be marketed lega lly in France, it must not contain these genetic
characteristics. As long as the canola/oilseed rape (colza) complies with the requirement that it not
contain the specific genetic event specified, it can be legally marketed. As the Appellate Body has
noted,
15 product characteristics can be expressed in negativ e, as well as positive, terms. Furthermore,
the products in question do not have to be expressly identified, only identifiable.16

15 EC – Asbestos, Report of the Appellate Body, para. 69.
16 Ibid., para 70.

ANNEX

47. Using the analytical framework presented by Canada at paras. 19 to 26 of Canada's first oral statement, could the complaining parties indicate briefly how
the European Communities has given effect to the alleged moratorium in respect of each of the relevant individual product appli cations? (see EC first written
submission, p. 70 et seq)

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
216 C/DK/97/01
Monsanto
RR Fodder Beet
90/220 Despite ...
- positive MS opinion
(7 Oct.1997), and
- positive SCP opinion
(23 June 1998), and
- Applicant responds to all MS
questions
(27 Apr.1998):

Commission failed to submit
measure for vote by Regulatory
Committee

222 C/ES/96/02
Monsanto
Bt Cotton (531)
90/220 Regulatory Committee vote held
on 11 Feb. 1999. No qualified
majority necessary for adoption
of Commission’s proposed
measure approving product.
Opposition by MS not based on
scientific risk assessment.
Despite...
- positive MS opinion
(19 Nov.1997), and
- positive Science Committee
opinion (14 July 1998), and
- 11 Feb.1999 vote in Regulatory
Committee with no outcome:
AND legal obligation to forward to
Council "without delay" under
Art.21 of 90/220

Commission failed to submit to
Council

229 C/ES/97/01
Monsanto
RR cotton
(RRC1445)
90/220 Regulatory Committee vote held
on 11 Feb. 1999. No qualified
majority necessary for adoption
of Commission’s proposed
measure approving product.
Opposition by MS not based on
scientific risk assessment.
Despite...
- positive MS opinion
(19 Nov.1997), and
- positive Science Committee
opinion (14 July 1998), and
- 11 Feb.1999 vote in Regulatory
Committee with no outcome:
AND legal obligation to forward to
Council "without delay" under
Art.21 of 90/220

Commission failed to submit to
Council

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
254 C/NL/98/11
Monsanto
RR OSR (GT73)

90/220 Total time for CA review: 54
months (7.Jul 1998 to 22
Jan.2003)
Time taken by Applicant to
respond to questions: 12
months
Difference: 13 months
instead of 90 days (Art. 12
of 90/220)
(note that over 20 months
were taken to resolve
confidentiality issues in
relation to detection
methods)

Total time for MS
review:
8 months (22 Jan.2003 to
6 Oct.2003) instead of
105 days (Art.15)

EFSA scientific review
completed 11 Feb.2004
(total 3 months)

Regulatory Committee
vote expected 16 June
2004 (total 4 months)

279 C/ES/00/01
Monsanto
RR corn (NK603)

90/220 Total time for CA review: 25
months
Time taken by Applicant to
respond to questions: 13
months
Difference: 12 months
instead of 90 days (Art. 12
of 90/220)
 Regulatory Committee vote held
on 18 Feb. 2004. No qualified
majority necessary for adoption
of Commission’s proposed
measure approving product.
Opposition by MS not based on
scientific risk assessment.
Proposed measure has not yet been
submitted to Council

286 C/ES/98/01
Monsanto
RR corn (GA21)

Withdrawn:
15 Sept. 2003
90/220 Despite ...
- positive MS opinion
(27 May 1998)
- applicant answers all MS
questions (21Oct.1999)
- positive SCP opinion
(22. Sep. 2000),
- completed MS consultation
- reduction of scope by applicant
to less controversial import only
(21 Mar.2001):

Commission failed to submit
measure for vote by Regulatory
Committee

287 C/F/95/06/01
Monsanto
RR OSR (GT73)

Withdrawn:
15 Jan.2003
90/220 Competent Authority refused
to consider or respond since
Feb.1996 (date of last request
for information to applicant
Total Time: more than 100
months

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
290 C/ES/99/02
Monsanto MaisGard
x RR corn
(MON810 x GA21)
stack

Submitted:
3 Sept. 1999

Withdrawn:
15 Sept. 2003
90/220 Application withdrawn.
293 C/GB/97/M3/2
Monsanto
RR corn (GA21)

Submitted:
6 Nov. 1997

Withdrawn:
29 March 2001
90/220 Total time for CA review:
15.5 months (6 Nov1997 –
23 Mar. 1999)
Applicant and UK CA reach
agreement to forward dossier
to Commission with positive
opinion (16.Feb.1999) if
certain amendments are
made, which were made by
applicant on 23. Mar.1999)

MS failed to forward dossier
to Commission for another
7.5 months (2 Nov.1999)
 Commission fails to submit
measure to Regulatory
Committee after completion of
MS consultation on 18 Feb.2000

296 C/BE/99/01
Monsanto
/Syngenta
RR sugar beet

Submitted:
22 Dec.1998

Withdrawn:
April 2004
90/220 MS CA fails to complete
review, thereby exceeding 90
day limit by several years.
April 1999, Nov.2000 and
Jan.2001 MS CA requests
applicant to "voluntarily"
comply with 2001/18
(despite fact that 2001/18
would not be in force until
Oct.2002), saying that
Commission and Member
States would otherwise
oppose dossier.

298 C/F/95/01A
Bayer Crop Science
Ms1xRf1
Canola/Oilseed
Rape

90/220 Commission
Decision 97/392/EC
consents to placing
on the market. MS
refuses to issue
consent letter.

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
298 C/F/95/01B
Bayer Crop Science
Ms1xRf2
Canola/Oilseed
Rape
90/220 Commission
Decision 97/393/EC
consenting to
placing on the
market. MS refuses
to issue consent
letter.
209 C/BE/96/01
Bayer Crop Science
Ms8/Rf3
Canola/Oilseed
Rape

Submitted:
30 Sept 1996

90/220 CA renders positive
assessment (20 Dec.1996)

MS objections take
approx 12 months.
Commission requests
opinion of SCP, which
renders opinion in May
1998. For the next 12
months, discussions
ensue relating to
fulfilling SCP
recommendations
(including monitoring
plan). Summer 1999
application discussed at
Regulatory Committee.
Application not put to a
vote. Imposition of
“interim approach”.

Despite…
- positive MS opinion
(20 Dec.1996)
- positive SCP Opinion
(19 May 1998)
- one year addressing
recommendations of SCP

Commission failed to submit
measure for vote by Regulatory
Committee.

Application effectively returned
to MS CA. 7.5 year delay in
processing application.

301 Monsanto
RR corn (GA21)

Submitted
24 July 1998

258/97 Total time for CA review: 18
months (24 July 1998 to 17
Jan. 2000)
Time taken by applicant to
respond to questions: 8
months
Difference: 10 months
instead of 90 days (Art. 6(3)
258/97)
 SCF review takes 17 months out
of which one month can be
attributed to applicant

Commission fails to submit
measure to Regulatory
Committee after completion of
MS consultation on 18 Feb.2000

314 Monsanto MaisGard
& RR corn
(MON810 x GA21)
stack

Submitted:
16 Mar.2000
258/97 Application pending with the
MS CA.

Paragraph No.
in EC Written
Submission
Product Applicable
Legislation
Stages 1 & 2
Competent Authority Review
Stage 3
Circulation to Member
States
Stage 4
Regulatory Committee Vote
Stage 5
Council Decision
Stage 6
Consent to placing
on the market
322 Monsanto
RR corn (NK603)

Submitted:
24 Apr. 2001
258/97 Total time for CA review:
18 months (24 Apr. 2001 to 5
Nov. 2002)
Time taken by applicant to
respond to question: 3.5
months (13 Dec.2001 to 28
Mar.2002)
Difference: 14.5 months
instead of 90 days (Art.
6(3))

 Regulatory Committee vote held
on 30 April 2004. No qualified
majority necessary for adoption
of Commission’s proposed
measure. Opposition by MS not
based on scientific risk
assessment.

333 Monsanto/
Syngenta
RR sugar beet (77)

Submitted:
3 Nov.1999

Withdrawn:
16 April 2004
258/97 Application withdrawn.
337 Monsanto
MON863
X MON810

Submitted :
13 Aug 2002
258/97 Product is moving according
to the rules.

ANNEX D-3

REPLIES BY ARGENTINA TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE FIRST SUBSTANTIVE MEETING

For all parties

1. Are the parties of the view that the Panel must base its findings and conclusions on the
facts as they existed on the date of establishment of this Panel?

Yes.

2. Annex A of the SPS Agreement contains two apparently alternative definitions of risk
assessment. Which of these definitions would be a ppropriate to evaluate the purported risk of
biotech products? Or would both definitions be appropriate?

Argentina considers that both definitions are a ppropriate. The applying definition will depend on the
type of risk being assessed.

3. Do the parties consider that food allergens can be considered to be "toxins" or "disease-
causing organisms" in a food, beverage or feedstuff?

Considering the potential risk involved, the risk aris ing from a food allergens can be considered to be
comparable with the risk arising from "toxins" or "disease causing organisms". Allergens and toxins
or disease causing organisms relate with risks referred to health, even if in some cases allergens may
affect just a sub-set of the population, instead of the population as a whole.

4. Which (if any) are the other binding intern ational instruments which are relevant to this
case? Could the parties please id entify the specific provisions which they believe to be of
relevance, and explain specifically how these provisions could be applied in this case.

In connection with the specific question, there is no other binding international instrument.

5. With reference to paras. 285 to 297 of the EC first written submission, how do the
complaining parties account for the fact th at the companies withdrawing notifications
apparently did not cite undue delays in the pr ocessing of notifications as reasons for the
withdrawal (except in the case of the notifi cation concerning Monsanto Roundup Ready oilseed
rape (GT73))?

On the one hand, the absence of a specific referen ce to "undue delay" in the applicants withdrawals
does not imply that "undue delay" was not the case. On the other hand, the silence of the applicants
cannot be taken as evidence of satisfaction with the process, but rather as the applicants concern with
maintaining good relations with the approving au thorities. Anyway, this situation is another
expression of the effect of the "de facto" moratorium.

6. With reference to pp. 27-36 of the EC first written submission, could the complaining
parties please indicate whether the European Communities' description of their own regulatory
systems is accurate?

The EC has properly identified the Resolution 39/2003, which controls the liberation of agricultural
biotech products. However, footnote 68 of the EC 's First Written Submission quotes partially the
content of the above mentioned regulation.

7. In the light of the European Communities' answer to Question 1 above in which it
touched upon the concept of "mootness", do the co mplaining parties consider that this concept
is of relevance in the present case?

No, because the «de facto» moratorium is still in force, and given the fact that it has not been imposed
through any document or administrative act we ca nnot be certain neither on whether it will be
effectively withdrawn or not nor on the possib ilities of it being reintroduced -should it have been
withdrawn -. Additionally, we have mentioned the case Chile – Price Band System in the Oral
Hearing, in relation to the safeguard measures, which were subject to the Panel's finding on
inconsistency
1.

Argentina strongly disagrees with the EC's argument in the sense that the mo ratorium has ceased to
exist. Precisely, this EC attempt demonstrates th e accuracy of the complainants argument about the
existence of a "de facto" moratorium.

On the other hand, and assuming for the sake of the argument that the EC statement is correct, how
could something cease to exist if it never existed in the first place?

For Argentina

8. Please elaborate further on para. 71 (notion of appropriate balance) and para. 101
(notion of reasonable relationship) of Argentina's first written submission.

Paragraph 71 uses wording of WTO case law. Arge ntina referred to the necessary balance between
rights of Members to adopt measures to protect life and health and the equally important right of other
Members that these measures -if trade restricting- be adopted consistently with the SPS Agreement.

In paragraph 101 of its First Written Submission, Ar gentina mentions that a measure has to observe
the central requirements of the SPS Agreement, name ly to be based on scientific evidence and not to
be maintained without sufficient scientific evidence. Argentina considers that these requirements have
to be given particular importance, since they ar e established in the title "Basic rights and obligations"
of the SPS Agreement. In the present WTO dispute, the measure, the"de facto" moratorium, has been
established without this requirement -scientific evid ence-, and it is being maintained for more than
five years without scientific evidence supporting it.

In this sense, the Appellate Body determined that "sufficiency" implied a relationship between two
elements: i) the sanitary or phytosanitary measure and ii) the scientific evid ence. In the opinion of
Argentina, its application to the present dispute implies that the relationship must be between the
measure, the "de facto" moratorium, and the scientific evidence.

Since the EC has applied the measure, the "de facto" moratorium, with no support of any scientific
evidence, Argentina considers that the EC has infringed its obligations under Article 2.2 of the SPS
Agreement.

1 Panel Report in Chile – Price Band System and Safeguard Measures Relating Certain Agricultural
Products, WT/DS207/R, paragraph 7.125.

For all parties

22. How many products have been approved under the simplified procedure for foods
produced from but not containing GMOs since October 1998?

It must be highlighted that these products di d not receive any "approval", but did undergo a
"notification" procedure instead. So, strictly said, the answer is none.

23. The European Communities states at paras. 26-28 of its first written submission that
none of the current biotech gene transfer me thods are able to precisely control where the
foreign gene will insert into the recipient cell's genome, or whether that insertion will be stable,
and further describes the screening for the desire d traits. How do the points described here
compare with the results of conventional selective breeding techniques?

Compared to conventional selective breeding t echniques which frequently result in random
rearrangements of the genome, rDNA techniques permit a more precise modification of the genome,
resulting less disruptive to other non-targeted areas of the genome. These techniques enable plant
breeders to develop a greater understanding of wh at has occurred to the genome at the molecular
level.

Regardless of the method used, the resulting organism mu st be screened for the desired traits -i.e the
desired phenotypic characteristic-. This may involve screening several generations of the organism to
ensure stability of the genetic modification. Regulators can then evaluate the end product to determine
its safety.

24. How does the potential for a llergenicity to be introduced through biotech foods (e.g., as
described by the European Communi ties at para. 45 of its first written submission) compare
with the potential for its introduction through non-GM novel foods?

While it is theoretically possible that rDNA techni ques could produce novel proteins with previously
unknown allergenic properties, there is no reason to conclude that th is possibility is any greater for
biotech foods as compared with non-GM novel foods.

The potential allergenicity for biotech foods compar ed to conventional food is the same, because it
depends on the introduced gene and the donor, not on the method by which the gene is introduced.

25. How do concerns regarding potential problems of invasiveness or persistence of biotech
crops in the environment (e.g., as described by the European Communities at para. 55 of its first
written submission) compare with the development of herbicide/pesticide resistance in
conventional crops which may then become invasive or persistent in the environment?

The concerns are comparable, which is why it is import ant to consider the final trait, regardless of the
method of introducing the trait.

It is also important to note that herbicide manage ment systems to combat invasiveness of crops are a
common feature of agronomic practice. This app lies to conventional and biotech products alike.
Resistance to one herbicide, regardless of whether the crop is biotech or not, does not imply that risks
cannot be controlled. It may simply mean that anot her herbicide must be used to control any resulting
volunteers.

26. For what, if any, crops is Europe considered to be the center of origin? What relevance
does this have to the approval of biotech crops?

As regards to the specific question, Europe is cons idered to be the center of origin of wheat, oats,
barley and rye -none of which have currently any developed "biotech counterpart"-. Despite this, the
EC has not mentioned the issue of Europe being the center of origin of any specific crops. EC's vague
and general reference to "center of origin" is another attempt of raising abstract and hypothetical
concerns which have never been raised referred to specific applications because they are not relevant
or which have been rejected because they are unsubstantiated.

27. In the context of the Codex working definition of a contaminant, do you consider that
the modification or reaction created by gene transfers, or the resulting protein, could be
considered a "contaminant"? (see, e.g., EC first written submission, para. 403)

Considering the possible risks arising from a developing agricultural biotech product -with no risk
assessment- the gene transfers could generate effects similar to "contaminants".

The expression "reaction created by gene transfers" is less accurate. Despite that, considering the
general sense of the question and the point related to potential risks of an agricultural biotech product,
the gene transfer could generate effects assimilable
 to contaminants.

28. Is one of the food-safety related concerns regarding biotech products that genetic
modification might unintentionally result in the production of a toxin in the modified food
product? Would this be a toxin in the context of the Codex working definition of a toxin? (see,
e.g., EC first written submission, para. 405.) Would this be a toxin in the context of the SPS
Agreement, Annex A?

Whenever the genetic modification raises a food-safe ty concern, this concer n should fall within the
SPS Agreement as a human health concern.

29. With reference to para. 420 of the EC first written submission, is there any way in which
a GMO can damage biodiversity or the ecologica l balance of an area other than through
negatively affecting the wild flora and/or fauna of the area? Please explain.

In Argentina's view, the most likely way in which biotech products can damage biodiversity or the
ecological balance of an area is through negatively affecting wild flora and/or fauna.

Nevertheless, Argentina considers that the scope of Annex A:1(d) is broad enough ("to prevent or
limit other damage...") so as to encompass any fu rther damage to biodiversity or the ecological
balance.

30. With reference to para. 421 of the EC first written submission, what sort of negative
impact on human or animal life or health ma y be caused by the increased use of specific
herbicides or the use of novel biotech-specific herbicides? Should these potential negative
effects be addressed differently than those which could occur from any other use of herbicides?
Please explain.

Related to the expression "novel biotech-specific herb icides", the herbicides have not been developed
for specific biotech products; to the contrary, the bi otech products were developed specifically for the
herbicide.

The type of negative impact on human, or animal lif e or health, caused by th e use of herbicides is
specific to individual herbicides. These impacts are routinely assessed at the time the herbicide is
approved for marketing and may involve the imposition of conditions on the use of the herbicide. Any
negative impact on human or animal life or health, if any, is related to the agronomic practices
associated with herbicide use, not the biotech product per se. In fact, certain herbicide-tolerant biotech
crops permit more environmentally sustainable agronomic practices. For example, the use of
herbicide-tolerant soybean (tolerant to the herbic ide glyphosate) enables farmers to practice zero-till
agriculture resulting in less adverse impacts on the environment than the traditional practice, common
in the EC, of using pre-emergent herbicides.

31. With reference to para. 422 of the EC first written submission, how does herbicide
resistance negatively affect flora and fauna? How is this potential effect different for biotech
crops compared to the development of herbicide resistance in non-biotech crops?

The EC's arguments appear to be related to herbicide use, not herbicide resistance.

In any event, the potential effect of herbicid e resistance on flora and fauna is not dependent on
whether the herbicide tolerance trait has been produced through rDNA techniques, but rather on the
type of herbicide used. For example, some broad spectrum herbicides, such as imidazolone, may lead
to greater selection of herbicide tolerant weeds due to the fact that the herbic ide remains effective in
the soil longer than with other herbicides. By contrast, glyphosate (marketed under the tradename
Roundup), leads to lower selection pressure for he rbicide tolerant weeds as glyphosate rapidly
degrades in the soil. Imidazolone is typically appl ied to traditionally bred herbicide tolerant crops,
while Roundup is typically applied to biotech herbic ide tolerant crops. The potential negative effect is
more a function of the accumulation and residual soil activity of the herbicide than the method by
which the herbicide tolerant trait is produced.

The EC also fails to mention that one of the benefits of herbicide-tolerant crops is that they allow for
greater efficiency and provide greater flexibility for managing and rotating cr ops. Herbicide-tolerant
crops may result in a reduction in the use of herbicides, saving time, fuel and chemical costs, reducing
farmer's exposure to herbicides, and reducing the impact on the environment.

32. With reference to para. 423 of the EC fi rst written submission, could any undesirable
cross-breed of plant be considered to be a "pest"? Is the IPPC definition of "pest" relevant in
this context?

Yes, regarding the risks, any undesirable cross- bread of plant could be considered a "pest" -for
instance, when a herbicide-tolerant gene is transferred to the crops' weeds.

33. With reference to para. 425 of the EC first written submission, could the development of
resistant target insects be of concern if such pests cannot become established or spread?

Controlling insects has been part of agricultural ma nagement practices for a long time. If a pest
management strategy is no longer effective because the target pest has developed resistance, the "risks
arising from the entry, establishment or spread" of that pest do not disappear. Regulators and farmers
alike are still concerned about the risks of that p est becoming "established" or "spreading". This does
apply no matter whether the resistance was acqui red through pesticides within the genome of a crop
or through conventional application of pesticides.

34. With reference to para. 46 of the EC first oral statement, do the parties consider that
any potential negative impact on soil micro-organ isms from the use of biotech crops could be

considered to be "other damage to the territory of a Member arising from the entry,
establishment or spread of a pest"? Please explain.

Yes. For example, the modification of the balan ce of the complex micro-organism population in the
RIZOSFERA of the plant.

35. With regard to the requirement to undertak e and complete procedures without undue
delay (Annex C(1)(a) of the SPS Agreement):

 (a) What is the object and purpose of this requirement?

 The object and purpose of this requirement is to provide predictability within the
approval procedures.

 (b) Is it correct that a delay in the completion of procedures would not result, ipso
facto, in a breach of Annex C(1)(a)? If so, how is a panel to determine when a
delay rises to the level of being "undue"?

 Yes, it is correct, because a delay n eeds to be "undue" in order to breach
Annex C:1(a) of the SPS Agreement. Additi onally, a delay is "undue" when it is not
justified under a substantive provision of the SPS Agreement or under a specific
provision of Annex C of the same Agreement.

36. With respect to those applications origin ally submitted under EC Directive 90/220 and
subsequently "re-submitted" under EC Direct ive 2001/18, did the re-submission of these
applications mark the beginning/opening of a new procedure for the purposes of Annex C(1)(a)
of the SPS Agreement, or is/was there only one sing le procedure? What are the implications of
your reply for the calculation of the length/dur ation of the relevant approval procedure(s)?
Specifically, from what time/event should the le ngth be calculated (e.g., when the original
procedure was initiated under EC Directive 90/220; when the second procedure was initiated
under EC Directive 2001/18)?

We are dealing with a single procedure, and the length of the approval must be calculated from the
original application. Otherwise, a Member would be entitled to delay indefinitely the approval just by
changing its approval regulation.

37. With reference to Annex A(1) of the SPS Ag reement, are the parties of the view that
"procedures" and, more specifically, "approval procedures" are SPS measures? If so, are
(approval) procedures as such subject to the requirem ents of Articles 2.2, 5.1, 5.5 and 5.6 of the
SPS Agreement? Why? Why not? In answering this question, please include a discussion of
the second clause of Article 8 ("otherwise ensure that [… ]") of the SPS Agreement and indicate
which are the relevant "provisions of this Agreement".

Yes, the "approval procedures" are SPS measures, as stated in Annex A:1 which explicitly includes
"inter alia... approval procedures ...". Consequently, these approval procedures are subject to the
substantive provisions of the SPS Agreement as set fort h in Article 8. If there is any infringement of
the substantive provisions put forward by the complain ing parties -i.e. Articles 5.1, 2.2, 5.5, 5.6 and
2.3 of the SPS Agreement-, this would lead to an infringement of Article 8 of the same Agreement.
However, even without any infringement of the s ubstantive provisions, Article 8 could be breached
through infringement of any provision within Annex C.

38. With particular reference to the complain ing parties' challenge to various member State
safeguard measures under Article 5.5 of the SPS Agreement, please answer the following
questions:

 (a) Which is the relevant "Member" for the purposes of the Panel's analysis of the
complaining parties' challenges? Is i t: (i) the member State applying the
safeguard measure or (ii) the European Communities as a whole?

 The EC is the relevant WTO Member. It is the EC the one which has been
complained against in this proceedings and the one which is internationally
responsible before the WTO. This has been acknowledged by the EC in these
proceedings.

 (b) Would it be permissible under Article 5.5 for an EC member State to apply
within its territory, either permanently or provisionally, a higher level of
protection than that which is applied in the rest of the European Communities?

WTO Members do have the right to apply the level of protection they consid er to be appropriate.
Nevertheless, this does not imply that they can ignor e the rest of the requirements within Article 5.5
of the SPS Agreement.

Consequently, it can be inferred that EC Members may apply –permanently or provisionally- different
levels of protection than the one applied by the EC, as long as they respect the SPS Agreement.

In any case, we should bear in mind that the EC regulatory system -which Argentina is not
questioning in this dispute- provides safeguard measures to be used.

In this case, it should be noted that the prohib itions by some Member States on certain biotech
products -alleging safeguard measures- were rejected within the EC's own approving system based on
scientific evidence.

The real problem about these issues, according to Ar gentina, does not point to the fact whether EC
Member States are entitled to establish the level of protection they cons ider to be appropriate –which
has never been questioned in these proceedings-, but to establish whether the Member States have
infringed the SPS Agreement by exercising this right.

At any case, the EC did never raise the issue of ri ght to a higher level of protection by its Member
States, neither within the EC's First Written Submission nor within the Oral Intervention.

For all complaining parties

39. Do the complaining parties agree with the statement at para. 17 of Norway's written
submission that "modern biotechnology" ref ers to more than just "recombinant DNA"
technology? Please explain what relevance, if any, this difference may have for the issues in this
dispute.

There appears to be no difference in substance between the position expressed by the complaining
parties and that of Norway on this point. The phrase "modern biotechnology" might well refer to more

than just "recombinant DNA" technology. The m easures addressed in this dispute, however, are
applied with respect to agricultural products of recombinant DNA technology.

40. Do the complaining parties agree with Norway arguments at paras. 130-131 of its
written submission that risks associated with th e use of antibiotic resistant marker genes do not
fall within the scope of the SPS Agreement?

We do not agree. The mentioned risk falls within th e scope of the SPS Agreement, because it refers to
health and life.

41. Do the complaining parti es agree with Norway's statement at para. 130 of its written
submission that plant DNA is not an "organism" and that concerns related to effects on plant
DNA do not fall within the scope of the SPS Agreement?

Argentina agrees that DNA is not an organism. Howeve r, the risk to be protected against is the risk
arising from the modification of DNA within a living organism -a plant-, so it falls within the scope of
the SPS Agreement.

42. Do the complaining parties agree with No rway's assertion at para. 141 of its written
submission that " [t]he situation which characterises the present dispute is therefore one where
a lot of scientific research has been carried out on a particular issue without yielding reliable

evidence"? (emphasis in the original) Please explain your views.

Argentina does not agree. There is reliable evid ence at hand, namely the positive opinions of the
scientific committees of the EC.

43. According to the European Communities, the processing of some applications was
delayed due to exchanges deriving from the requests for voluntary commitments or
amendments of the notifications so that the noti fications would be in line with the requirements
provided for by new legislation. For example, in respect of release into the environment, in the
summer of 1999 a Common Position on the propo sed modification of the Directive was adopted
by the Council, and since then notifiers appear to have tried to address additional concerns
contained in it. The European Communities ci tes similar cases in respect of the novel food
legislation as well. However, there is no ref erence to these cases in the complaining parties'
submissions. Do the complaining parties agree with the European Communities' account? If
so, could they please explain their understanding of these cases? Please explain the relevance of
these cases to your belief that a de facto moratorium existed.

The EC has stated that there was a "Common Position" taken on an uncertain date somewhere "in
summer of 1999" -describing it as "a document adopted by the Council"
2 but with no submission of
this document-. Through the reference to a documen t like the "Common Position", the EC continues
acknowledging that the "de facto" moratorium is an intended measure, responding to a specific
intention, and addressed to all biotech products . Through the "Inter-Service Consultation" from
February 1999, the "Common Position" from summer 1999, and the following "interim approach", the
EC continues stating that there are, in fact, EC political actions not regulated in its approval system,
which did prevent the approval of biotech agri cultural products, which did respond to a political
intention of the EC, and which, added to all evid ence submitted by the co-complainants, demonstrates
the beginning of the "de facto" moratorium.

2 First Written Submission of the EC, paragraph 206, footnote 140.

With the introduction of these concepts -"Inte r-Service Consultation", "Common Position" and
"Interim Approach", all of which took place in early 1999, the moment when the "de facto"
moratorium was beginning to be applied after the l ast approval in 1998-, the EC is giving name to
stages which were not set forth in the approval proc edures and which had the effect of stalling these
procedures, thus manifesting the beginning of a "de facto" measure.

In short, these concepts further demonstrate that fro m the beginning of 1999 the EC intervened on the
approval procedures on the grounds of an alleged cha nge of legislation. The EC thus admits that it
applied a "de facto" measure. This "de facto" meas ure was supposed to last -at least as the EC first
stated- until Directive 2001/18/EC would come into e ffect. As the co-complainants demonstrated and
the EC did not refute, the "de facto" measure would still last longer. Argentina considers that the EC
admitted that the "de facto" moratorium had a begi nning and was maintained for years and request
the Panel to make finding on this issue accordingly.

44. Are the complaining parties making any claims in respect of a "failure to consider"
applications (as opposed to a "failure to grant fi nal approval" or a "failure to allow products to
move to final approval")? If so , could they please indicate which, if any, of the applications
referred to in their first written submissions and/or first oral statements in their view constitute
instances of "failure to consider" and why?

Argentina considers that the phrases "failure to grant final approval" or "failure to allow products to
move to final approval" used in the Panel's ques tion are equal to the phrase "suspension of" -as used
in the terms of reference of Argentina-

In the Argentinean claim, the phrase "suspension of... " refers to procedures with a positive scientific
opinion which was led to no approval anyway, while the phrase "failure to consider..." refers to
procedures which did not even obtain any scientific assessment at all within the proceeding.

Being so the case, Argentina claims against the "fa ilure to consider" the a pplication of A2704-12 and
A5547-127 soy.

45. With reference to paras. 2 and 24 of the US first oral statement ("failure to allow
products to move to final approval"), paras. 16 and 40 of Canada's first oral statement
("stalling and blocking of applications at key decision-making stages") and paras. 21 and 26 of
aprobación"), can it be said that the comp laining parties view the alleged moratorium
essentially as a "decision not to decide", for an unspecified period of time, with respect to any
applications for approval, rather than as a "decision to decide negatively" with respect to any
and all such applications?

No, the measure "de facto" moratorium cannot be ex clusively described as a "decision not to decide",
since it has been revealed sometimes as a "decision not to decide", while other times as a "decision"
of not approving (i.e. through the blocking in some stage within the EC approval system).
In this sense, Argentina points out that the "de f acto" moratorium implies both actions as well as
omissions.

46. Are the complaining parties asserting that the alleged across-the-board moratorium led
to "undue delays" with respect to all applications pending as of the date of establishment of this
Panel, regardless of when these applications were submitted to the relevant member State
authority?

The "de facto" moratorium had as an effect an "un due delay" in all the EC approval system. In this
sense, the "de facto" moratorium has affected all applications.

Being the "de facto" moratorium a general measure as described in the First Written Submission of
Argentina, it has affected all the applications re gardless of the moment in which these applications
were presented.

Argentina reminds that the "de facto" moratorium affects all applications of biotech products, while
the claim of "undue delay" refers to specific pr oducts of interest of Argentina. Additionally, we
remind the Panel that the "suspension of processing a nd failure to consider individual applications for
approval of specific biotech agricultural products of par ticular interest to Argentina" refers to specific
products of Argentina, too.

47. Using the analytical framework presented by Canada at paras. 19 to 26 of Canada's first
oral statement, could the complaining parties indicate briefly how the European Communities
has given effect to the alleged moratorium in re spect of each of the relevant individual product
applications? (see EC first written submission, p. 70 et seq)

For all the products of its interest, Argentina is refe rring to the latest stage in which the application
was affected by the "de facto" moratorium. Further details will be submitted in the rebuttal.

In the first and second stage, Argentina considers that there is indeed a "decision not to decide". The
measure, "de facto" moratorium, is indeed given effect through a "decision not to decide" when the
"initial reports" are not prepared
3.

In the third stage, the "de facto" moratorium is given effect through a specific action, expressed by the
objections of EC Member States. In this case, ther e is not a "decision not to decide", but a specific
action.

In the fourth stage, the "de facto" moratorium is given effect when the Commission does not submit
any draft decision to the Regulatory Committee -thus implying a "decision not to act"-
4.

In the cases in which the Commission did submit a draft decision to the Regulatory Committee, the
"de facto" moratorium is given effect when the Co mmittee has not been able to achieve the majority
of votes to make a decision. In this case it is diffi cult to establish whether there was a "decision not to
act", since there was indeed an action -the submissi on of the draft to the Regulatory Committee- with
no majority at the end.

In the fifth stage, when there is no majority w ithin the Regulatory Committee, the Commission must
submit the matter to the Council of Ministers. Wh en the Commission does not make the submission,
the "de facto" moratorium is given effect. Hence, there is a "decision not to decide"
5.

3 For Soybeans (A2704-12 and A5547-127) under Directive 90/220/EEC, see EC's First Written
Submission, paragraph 261, and under Regulation (EC) 258/97, see paragraphs 310-313.
4 For GA-21 maize under Directive 90/220/EEC, see EC's First Written Submission, paragraph 286 et
seq, and under Regulation (EC) 258/97, in paragraphs 301-304.
5 For Bt-531 cotton under Directive 90/220/EEC, see EC's First Written Submission,
paragraphs 222-228.
For RRC 1445 cotton under Directive 90/220/EEC, see EC's First Written Submission,
paragraphs 229-234.

In the sixth stage, once the decision has been made , the Member State in which the application was
presented must notify the applicant that the product is to be put in the market (according to Directive
90/220/EEC and Directive 2001/18/EC). Here there is also a "decision not to act".

48. With reference, inter alia, to paras. 285 to 297 of the EC first written submission, do the
complaining parties consider that procedural delays would be justified in situations:

 (a) where they are caused by risk consid erations which do not fall within the scope
of Annex A of the SPS Agreement;

 No, since the relevant risk falls within the scope of Annex A of the SPS Agreement
and does not have any justification in light of the SPS provisions.

 (b) where they have been voluntarily accepted by the applicant;

 No, applicants have no other choice bu t to accept any further requirements they are
put. Accordingly, their behaviour cannot be deemed to be "voluntarily", thus it might
not be inferred that the following procedural delays would be justified.

 Besides that, the behaviour of the applican t is not relevant anyway, since individuals
or firms are not in a position to wave rights or obligations under the covered
Agreements.

 (c) where the entry into force of new legislation is imminent and the applications
that are pending under the old legislation on the date of entry into force of the
new legislation become subject to the stricter requirements of the new
legislation;

 Argentina highlights that whether a ne w legislation is "imminent" rather than
"effective" has no legal value in order to consider any justification under the WTO.
On the contrary, Argentina reminds of the fact that, regardless of whether the EC's
new legislation was "imminent" or not, applicants had no other choice than complying
with the new requirements set forth by the EC authorities.

 (d) where they are not attributable to a Member (e.g., where they have been caused
by the applicant);

 Where the applicant has caused the delay, a delay in the completion of the approval
procedure would be justified.

 (e) where they are necessary in order to ensure compliance with existing legislation
and relevant international standards (e.g., Codex Principles; see Exhibit EC-44);

For NK-603 maize under Regulation (EC) 258/97, see EC's First Wr itten Submission, paragraph 327.
Nevertheless, with reference to the application under Directive 90/220/EEC an d Directive 2001/18/EC –
paragraph 284 – the Commission did indeed submit the matter to the Council; Argentina trusts that this is going
to end in a final approval as the EC keeps stating.

 If there was any existing legislation or othe r relevant rule, the obligation might be the
rejection or the approval of the applica tion, but never something like an "undue
delay".

 (f) where they result from efforts to elab orate monitoring requirements, adequate
agricultural practices and similar efforts to manage SPS risks?

 No, the delay is not justified, because th e approval must be based on risk assessment.
Where there is positive risk assessment, appr oval must be granted. Otherwise, the
refusal to approve becomes "undue delay".

 Would any of the above situations justify (i) the alleged across-the-board moratorium
and (ii) the alleged product-specific delays referred to in the complaining parties' submissions?

No to both cases.

49. With reference to paras. 440 and 441 of the EC first written submission, it appears that
the European Communities is arguing, in eff ect, that the SPS Agreement would apply to a
measure (a legal provision, etc.) to the extent that measure pursues SPS objectives as defined in
Annex A(1) of the SPS Agreement, and that the TBT Agreement would simultaneously apply to
that same measure (legal provision, etc.) to the extent that measure is a technical regulation
which does not pursue SPS objectives. Do the co mplaining parties agree with this argument?
In answering this question, please address the provisions of Article 1.5 of the TBT Agreement.

No, Argentina does not agree. The SPS Agreement a nd the TBT Agreement are mutually exclusive,
according to Article 1.5 of the TBT Agreement. Besid es, and specifically related to paragraph 441, by
definition a measure cannot be a "series of measu res". Additionally, Argentina considers that the
measure at issue does not comply with the TBT requ irements related to the form of the measure as
contemplated in Annex 1 of the TBT Agreement.

50. With reference to Article 5.7 of the SPS Agreement, do the complaining parties agree
with the European Communities that:

 (a) Article 5.7 excludes the applicability of Article 5.1 and is not an exception
(affirmative defence) to Article 5.1 (EC first written submission, para. 575)? In
answering this question, please address the relevance of the Appellate Body
Reports on Japan – Apples (footnote 316), EC – Hormones (para. 104) and EC –
Sardines (para. 275) and Japan – Agricultural Products II (paras. 86 et seq)?

 Without prejudice to Argentina's position on the nature of the relation between
Articles 5.7 and 5.1 of the SPS Agreement, in order to exclude the applicability of
Article 5.1 by virtue of Article 5.7, subs tantive requirements of the latter must be
fulfilled. It is up to the EC to satisfy the burden of proof within the logic of its
arguments
6 related to the four elements of Artic le 5.7. Argentina argued in its First
Written Submission about the lack of fulfilment of Article 5.7 requirements by the "de
facto" moratorium. The EC argued in its submission about the exclusion by Article
5.7 in the Member States bans. However, no proof has been advanced, even in
relation to the first requirement of Article 5.7 -absence of scientific evidence- vis-à-
vis scientific evidence supporting the approvals . The Panel formally requested the EC

6 EC's First Written Submission, paragraph 575.

to table this evidence in order to satisfy its burden of proof, so the complainants are
not in a position to argue further on the second, third and forth requirement of Article
5.7 of the SPS Agreement.

 Additionally, Argentina endorses Cana da's argument in paragraphs 67 and
subsequent, highlighting that in the case of the Member State bans, risks assessments
were performed at least two times for each product. It is clear that there is in fact
sufficient scientific evidence in order to have the Member States bans lifted.
Argentina will further develop this argument as necessary in the rebuttal.

 (b) Article 5.6 is not "relevant" where Article 5.7 applies (EC first written
submission, para. 612)?

Argentina does not agree with this attempt of the EC of turning Article 5.7 to a pivotal Article capable
of disabling other provisions in the SPS Agreement, given that there is no textual relationship between
them -unlike Articles 2.2 and 5.7 which are refe rred to as rule and exemption-.Besides, both
provisions do not deal with the same matter: while Article 5.7 refers to the amount of information
needed for applying a measure and to the provisional character of that measure, Article 5.6 refers to
the degree of trade restriction resulting from that measure. Articles 5.7 and 5.6 deal with different
obligations.

 (c) Article 5.7 "effectively" excludes Article 5.5 (EC first written submission, para.
618)?

 On the same grounds, Argentina rejects the EC's assertion on Article 5.7 as excluding
Article 5.5. The latter refers to distincti ons in levels of protection which entail
discrimination or disguised trade restrictions.

 (d) the sufficiency of relevan t scientific evidence depends, inter alia, on a country's
level of protection and the nature of the risks (e.g., reversibility of damage)? (see
EC first written submission, paras. 605-606)

 In the context of Article 2.2, the suffi ciency of the scientific evidence relates to
whether it adequately supports the measur e taken. As has been noted in the
jurisprudence, the ordinary meaning of "suffi cient" is "of a quantity, extent, or scope
adequate to a certain purpose or object". With respect to the requirements of Article
2.2 and Article 5.1, this means that th ere must exist "a rational or objective
relationship between the SPS measure and the scientific evidence". This is to be
determined on a case-by-case basis and will depend on the particular circumstances of
the case, including the characteristics of the measure at issue and the quality and
quantity of the scientific evidence.

 The sufficiency of the scientific eviden ce goes to the question of whether there is
adequate scientific evidence to make an objective assessment of risk. If there is
sufficient scientific evidence to make an objective assessment, then Article 5.7 would
not be available. There would be no need for a provisional measure.

 The EC has acknowledged that by requesting the Member States to lift their bans
7.

7 Canada's Oral Intervention, paragraph 68.

51. Concerning the complaining parties' clai ms in respect of the various member State
safeguard measures, are those measures "c ases where relevant scientific evidence is
insufficient" within the meaning of Article 5.7 of the SPS Agreement?

No, they are not. There was sufficient relevant scien tific evidence at hand, opposed to the bans, which
were declared groundless by the scientific Committees of the EC.

52. Do the complainants agree with the definiti on of "an adequate ri sk assessment" as put
forward by the European Communities in the last sentence of para. 604 of its first written
submission?

The EC definition of "adequate risk assessment" is not the correct one. An adequate risk assessment
must basically consider two aspects: the phe notypical expression and the genetic molecular
characterization. The assessment criteria must be based in a case-by-case approach.

Consequently, the definition of "a dequate risk assessment" in paragraph 604 is not correct, since it
does not consider the aforementioned aspects and b ecause it does not currently remain valid given the
advances in scientific knowledge.

For Argentina

53. With reference to para. 42 of the US oral statement, is the United States correct in
stating that "the co-complainants here are not saying that a pattern of decisions itself constitutes
a measure. Instead, the co-complainants have pointed to an unbroken pattern of
[non-]decisions as the inevitable result of the moratorium, which is itself an independent
measure"?

Argentina considers that the "de facto" moratorium is a "measure".

In this sense, Argentina is of the opinion that the "de facto" moratorium is a compound of actions and
omissions by the EC which has lead to the failure of approval of biotech agricultural products from
1998 to the present (or to the establishment of the Panel).

For this reason, and as stated in its First Writte n Submission and Oral Statement within the First
Meeting of the Panel with the parties, the "de fact o" moratorium -given its characteristics- cannot be
restrained to concepts like "patterns of decisions or non-decisions".

The "de facto" moratorium constitutes an EC measur e which had the effect of not allowing approvals
in the mentioned period.

This measure is given effect through changes in the EC legislation which implied stalling the approval
procedures, through failure to consider the appli cations -in those products which did not obtain any
scientific assessment-, through suspensions of th e procedures -in those products which did obtain a
positive scientific assessment-, through a constantly and systematically alleged necessity for more
adequate legislation, in such a way that the ne w legislation -Directive 2001/18/EC- had no time to
enter into effect while the EC already was talk ing about new necessities. In short, the approval
requirements became a "moving target" for the applicants.

In other words, the "de facto" moratorium is a measure by the EC. This is inferred from the
declarations of the EC's own officials whic h acknowledged its existe nce many times. These

declarations, as mentioned by Argentina, are not pe r se binding for the EC, but are crucial since they
are capable of proving the existence of the "de facto" moratorium.

54. With reference to para. 314 of Argentina' s first written submission, could Argentina
explain why the "additional information that may have been required or delays in the technical
reports by the respective scientific committees" do not justify the alleged delays in the
processing of any of the products specified by Argentina?

The last sentence of paragraph 314 must be read in the broader context of the same paragraph and in
the much broader context of paragraphs 296 to 31 5. Then, it appears clear that there is no other
specific information supporting the breach of the timeframes of the EC procedures.

Given the lack of any other relevant scientific evid ence, the conclusion contained in the last sentence
of paragraph 314 flows naturally. There were no other elements at the time when the delays took
place.

55. Have there been instances in which applicants requested to be informed of the stage of
the procedure and/or requested an explanatio n for any delays, but where these requests were
denied or no response was provided?

Argentina is not aware of any of those situations . However, given the nature of the "de facto"
moratorium, it becomes irrelevant.

56. With reference to para. 469 of Argentina' s first written submission, could Argentina
provide further details regarding why the member State safeguard measures were established
in accordance with Annex A(1) of the SPS Agreement?

Argentina considers that these measures were applied- within the pertinent EC legislation- with SPS
purposes, namely the safeguard mechanism estab lished by Directive 90/220/EEC and Regulation
(EC) 258/97). Additionally, these measures were anal ysed by the EC Scientific Committees, which
found them to be groundless.

Besides, not only the purpose was an SPS one, but the Member States themselves decided to apply the
measures under that provision.

57. With reference to para. 655 of the European Communities' first written submission, is
the European Communities correct in arguing that Article 2.1 of the TBT Agreement only
applies "to differences in treatment between pr oducts that are covered by the technical
regulation in question"?

No. Argentina considers that a determination of similarity has to be made according to GATT/WTO
jurisprudence.

The EC argument is incorrect, since it leaves the determination of similarity based on whether any
product be or be not included within a specific regulatory system.

Besides that, if one were to follow that idea, a WTO Member would be able to apply so many
regulatory schemes as the amount of similarity determ inations it is intended to avoid. Being that the
case, it would be very easy for a Member to avoid its WTO obligations (as stated by New Zealand in
its Submission as a Third Party).

58. With reference to Article 5.2.1, first clau se, of the TBT Agreement, is there a difference
between a requirement to undertake and complete a procedure "as expeditiously as possible"
and a requirement to undertake and complete a procedure "without undue delay" (see Annex
C(1)(a) of the SPS Agreement)? For instance, is it possible that a procedure has not been
completed as expeditiously as possible, but th at this nevertheless did not entail any undue
delay?

First, Argentina recalls that the SPS Agreement and the TBT Agreement are mutually exclusive.

Second, Argentina considers the terms "undue delay" to be of a stricter nature than the terms "as
expeditiously as possible". The former refers exp licitly to the word "undue", which implies the
existence of requirements in order to render the dela y "due" or "undue". It is the opinion of Argentina
that Article 8 of the SPS Agreement refers to both substantive requirements -those listed, for instance,
in Articles 5.1, 2.2, 5.5, 5.6 and 2.3 of the SPS Agreement- and to other requirements, listed in
Annex A of the same Agreement.

On the other hand, the wording "as expeditiously as possible" only refers to the obligation to act in a
quick manner, regardless of any further requirements besides the proper speed.

Despite the distinction, and with reference to the last question, Argentina considers that the proper
order of analysis should be the opposite. The SPS Agreement and the TBT Agreement are mutually
exclusive. Besides, the former deals with the specific object and purpose of protecting life and health
while the latter makes no specific reference. Since the SPS Agreement has more requirements
addressing the issue of delay -see "undue delay" w ith its requirements vis-à-vis the "expeditiousness"
of the TBT Agreement-, the analysis should be ma de beginning with the SPS Agreement. Should the
SPS Agreement -and the "undue" delay- be disregarded for some reason, then one should consider the
TBT Agreement and the acting "as expeditiously as possible".

Consequently, we do not believe
 that a procedure that has not been completed as expeditiously as
possible -under the TBT Agreement- would nevert heless not entail any undue delay -under the SPS
Agreement-.