AUSTRALIA – MEASURES AFFECTING THE IMPORTATION OF APPLES FROM NEW ZEALAND
Document: Report of the Appellate Body
Date: 29 November 2010
Document codes: WT/DS367/AB/R
Complainant: New Zealand
Respondent: Australia
Third parties: Chile, EU, Japan, Pakistan, Taiwan, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, 8, Annex C  Sanitary and Phytosanitary Measures (SPS)

AUSTRALIA – MEASURES AFFECTING THE IMPORTATION
OF APPLES FROM NEW ZEALAND

AB-2010-2

Report of the Appellate Body

APPELLATE BODY

Australia, Appellant/Appellee
New Zealand, Other Appellant/Appellee

Chile, Third Participant
European Union
1, Third Participant
Japan, Third Participant
Pakistan, Third Participant
Separate Customs Territory of Taiwan, Penghu,
 Kinmen and Matsu, Third Participant
United States, Third Participant
AB-2010-2

Present:

Zhang, Presiding Member
Hillman, Member
Oshima, Member

I. Introduction
1. Australia and New Zealand each appeals certain issues of law and legal interpretations
developed in the Panel Report, (the "Panel Report"). 2 The Panel was established on 21 January 2008 to consider a
complaint by New Zealand concerning several Aust ralian measures on the importation of apples from
New Zealand.3
2. Following a request for access to the Austra lian market filed by New Zealand in
January 1999, the Australian Quarantine and Insp ection Service ("AQIS") initiated an import risk
analysis4 to assess the risks associated with the importa tion of apples from New Zealand, including,
notably, the risks associated with the following three quarantine pests: fire blight, European canker,
and apple leafcurling midge ("ALCM"). 5 In November 2006, Biosecurity Australia issued its

1This dispute began before the entry into force of the Treaty of Lisbon amending the Treaty on
European Union and the Treaty establishing the European Community (done at Lisbon, 13 December 2007) on
1 December 2009. On 29 November 2009, the World Trade Organization received a Verbal Note (WT/L/779)
from the Council of the European Union and the Commission of the European Communities stating that, by
virtue of the Treaty of Lisbon, as of 1 December 2009, the European Union replaces and succeeds the European
Community. Thus, although the European Communities reserved its right to participate in the panel
proceedings as a third party, and th e Panel referred to the European Comm unities in its Report, the European
Union filed a third participant's submission in this appe al, and we will refer to th e European Union in this
Report.
2WT/DS367/R, 9 August 2010.
3Panel Report, paras. 1.1 and 1.2.
4Panel Report, para. 2.31. At the time, Biosecurity Australia was part of AQIS. In 2004, Biosecurity
Australia was created as a separate agency, and is part of the Commonwealth Department of Agriculture,
Fisheries and Forestry. (Ibid., para. 7.157; Biosecurity Australia, Final Import Risk Analysis Report for Apples
from New Zealand (Canberra, November 2006) (the "IRA"), Part B (Panel Exhibit AUS-2), p. 8)
5Panel Report, para. 2.27. In addition to fire blight, European canker, and ALCM, the IRA assessed the
risks associated with eight other pests.

Final Import Risk Analysis Report for Apples from New Zealand (the "IRA").
6 This risk assessment
was "semi-quantitative" in that, for each pest, it co mbined a quantitative assessment of the likelihood
of entry, establishment and spread with a qualita tive assessment of the li kely associated potential
biological and economic consequences. 7 The combination of these probability assessments then
yielded an overall determination of "unrestricted risk ", that is, the risk associated with the importation
of apples from New Zealand in the absence of any risk management measures. 8 When the
"unrestricted risk" associated with a specific pest was determined to exceed Australia's appropriate
level of protection ("ALOP") 9, then possible risk management measures that could be adopted to
mitigate the risk were evaluated, and recommendations made accordingly. 10 Thus, the IRA
recommended a number of risk management measures to the Director of Animal and Plant
Quarantine.
11 The Director subsequently determined that the importation of apples from New Zealand
can be permitted subject to, inter alia, the application of the phytosan itary measures specified in the
IRA.12
3. The 17 measures listed by New Zealand in its re quest for the establishment of a panel are
among those specified in the IRA. 13 Of the 17 challenged measures, eight relate to fire blight, five to
European canker, and one to ALCM. Three additio nal "general" measures apply to all three of these
pests.14 The IRA provides that New Zealand and Aust ralia must agree standard operating procedures
for each quarantine pest of concern before exports of apples may begin, but no such agreement has yet
been reached.15 Further details regarding the measures examined by the Panel and the process leading
to their adoption are set out in section IV of this Report.

6Biosecurity Australia, Final Import Risk Analysis Report for Apples from New Zealand (Canberra,
November 2006), Part A (Panel Exhibit AUS-1), Part B (Panel Exhibit AUS-2), and Part C (Panel Exhibit
AUS-3).
7Panel Report, paras. 2.36 and 2.61-2.67.
8Panel Report, paras. 2.56 and 2.57.
9Australia's appropriate level of protection is expressed in qualitative terms as "providing a high level
of sanitary or phytosanitary protection aimed at reducing risk to a very low level, but not to zero". (See Panel
Report, paras. 2.59, 7.963, and 7.1136; and IRA, Part A, p. 3, and Part B, p. 4)
10The IRA states that the measures, or combinations of measures, that it sets out are necessary to
achieve Australia's appropriate level of protection by reducing risk to an acceptable level. (Panel Report,
paras. 2.58, 2.59, and 7.134 (referring to IRA, Part A, pp. 9 and 13, and Part B, pp. 41, 105-115, 151-155,
187-192, and 313-325))
11Further details on the methodology used by the IRA to assess the risks associated with the import of
apples from New Zealand and to recommend risk management measures are set out infra, paras. 132-148 of this
Report.
12Biosecurity Australia Policy Memorandum 2007/07, Biosecurity Policy Determination – Importation
of Apples from New Zealand , 27 March 2007 (Panel Exhibit NZ-2) quoted, in relevant part, in Panel Report,
para. 7.165.
13The 17 measures are set out infra, para. 125 of this Report. See also Request for the Establishment of
a Panel by New Zealand, WT/DS367/5.
14Panel Report, para. 2.92. These general requirements are also relevant to other pests examined in the
IRA, which are not at issue in this dispute.
15Panel Report, para. 2.33.

4. Before the Panel, New Zealand claimed that th e measures at issue, both individually and as a
whole, are inconsistent with Articles 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, and 8, and Annex C(1)(a) to the
Agreement on the Application of Sanitary and Phytosanitary Measures (the " SPS Agreement ").16
New Zealand alleged that the Australian measures: (i) are maintained without scientific evidence 17;
(ii) are not based on a proper risk assessment 18; (iii) subject imported fruit with a degree of risk
equivalent to or higher than that of New Zealand a pples to measures substantially less restrictive than
those imposed on imports of New Zealand apples 19; and (iv) are more trade restrictive than necessary
to achieve Australia's appr opriate level of protection. 20 New Zealand also claimed that the IRA
ignores available scientific evidence, Australia n border inspection processes, relevant apple
production processes in New Zealand, relevant di seases or pests in New Zealand, and relevant
climatic conditions in both New Zealand and Australia. 21 Furthermore, New Ze aland alleged that the
delay of almost eight years between New Zealand' s request for the admission into Australia of
New Zealand apples and the completion of Australia's approval procedures was "undue".22
5. On 13 March 2008, Australia requested a pre liminary ruling from the Panel regarding the
consistency of New Zealand's panel request with Article 6.2 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes (the "DSU"). On 6 June 2008, the Panel issued a
preliminary ruling and determined that the 17 sp ecific measures set out in New Zealand's panel
request had been properly identified; that no other measure had been identified by New Zealand; and
that New Zealand's panel request contained sufficient information re garding the legal basis of the
complaint to present the problem clearly wi th respect to the 17 identified measures. 23
On 22 August 2008, Australia requested a second preliminary ruling. Australia requested the Panel to
find that New Zealand's claim under Ar ticle 8 and Annex C(1)(a) to the SPS Agreement fell outside
the scope of the dispute, because New Zealand ha d not identified the "process" that had allegedly
been "unduly delayed". On 8 September 2008, the Panel informed the parties that it would address
New Zealand's claim under Article 8 and Annex C(1)(a) to the SPS Agreement in its final report since
it had found no good cause to issue a second preliminary ruling. 24 On 19 December 2008, the parties

16Panel Report, para. 3.1.
17Panel Report, para. 4.13.
18Panel Report, para. 4.28.
19Panel Report, para. 4.44.
20Panel Report, para. 4.46.
21Panel Report, para. 4.43.
22Panel Report, para. 4.49.
23Communication from the Chairman of the Panel, Preliminary Ruling by the Panel, WT/DS367/7.
24Panel Report, para. 1.16.

advised the Panel that they had reached agreemen t on one of the 17 measures. Consequently, the
Panel did not rule on New Zealand's claims in respect of this measure.
25
6. The Panel decided to seek expert advice and requested the International Plant Protection
Convention (the "IPPC") Secretariat and the Council fo r International Congresses of Dipterology to
provide names of experts in the following fields: fire blight ( Erwinia amylovora); European canker
(Neonectria galligena ); ALCM ( Dasineura mali ); and pest risk assessment, including semi-
quantitative methodologies. 26 On 15 December 2008, the Pane l informed the parties that it had
appointed seven experts: Dr. Jean-Pierre Paul in and Dr. Tom Deckers for fire blight;
Dr. Bernardo Latorre and Dr. Terence Swinburne for European canker; Dr. Jerry Cross for ALCM;
and Dr. Gritta Schrader and Dr. Ricardo Sgrillo for pest risk assessment, including the use of semi-
quantitative methodologies.27
7. The Panel Report was circulated to Members of the World Trade Organization (the "WTO")
on 9 August 2010. For the reasons set out in its Report, the Panel found that:
(a) [t]here is no evidence that the process of selection and
consultation of experts was c onducted improperly, that due
process in the expert consultation phase of these proceedings
was compromised, nor that Australia's procedural rights were in
any manner negatively affected in this regard
28;
(b) [t]he 16 measures at issue in the current dispute, both as a
whole and individually, constitu te SPS measures within the
meaning of Annex A(1) and are covered by the
SPS Agreement
29;
(c) Australia's measures at issue re garding fire blight, European
canker and ALCM, as well as the requirements identified by
New Zealand as "general" measures that are linked to all three
pests at issue in the present dispute, are inconsistent with
Articles 5.1 and 5.2 of the SPS Agreement and, by implication,
these requirements are also inconsistent with Article 2.2 of the
SPS Agreement
30;
(d) New Zealand has failed to demonstrate that the measures at
issue in the current dispute are in consistent with Article 5.5 of
the SPS Agreement and, consequentially, has also failed to

25Panel Report, paras. 1.20 and 2.96. The agreement concerned Measure 12 relating to European
canker. (See infra, para. 126 of this Report)
26Panel Report, paras. 1.21-1.32.
27Panel Report, para. 1.33.
30Panel Report, para. 8.1(c); see also paras. 7.510 (with respect to fire blight), 7.781 (with respect to
European canker), 7.887 (with respect to ALCM), 7.905 (with respect to the general measures), and 7.906
(overall conclusion).

demonstrate that these measures are inconsistent with
Article 2.3 of the SPS Agreement
31;
(e) Australia's measures at issue re garding fire blight, European
canker, and ALCM, are inconsiste nt with Article 5.6 of the
SPS Agreement; New Zealand has failed to demonstrate,
however, that the requirements identified by New Zealand as
"general" measures that are linked to all three pests at issue in
the present dispute, are inconsistent with Article 5.6 of the
SPS Agreement
32; and
(f) New Zealand's claim under Annex C(1)(a) ... and its
consequential claim under Article 8 of the SPS Agreement are
outside of the Panel's terms of reference in this dispute.33
Accordingly, the Panel recommended that the Disput e Settlement Body (the "DSB") request Australia
to bring those measures found to be inconsistent into conformity with its obligations under the
SPS Agreement.
8. On 31 August 2010, Australia notified the DSB of its intention to appeal certain issues of law
covered in the Panel Report and cer tain legal interpretations devel oped by the Panel, pursuant to
Articles 16.4 and 17 of the DSU, and filed a Notice of Appeal 34 pursuant to Rule 20 of the Working
Procedures for Appellate Review (the "Working Procedures").35 On 7 September 2010, Australia filed
an appellant's submission.36 On 13 September 2010, New Zealand notified the DSB of its intention to
appeal certain issues of law covered in the Panel Re port and certain legal interpretations developed by
the Panel, pursuant to Articles 16.4 and 17 of the DSU, and filed a Notice of Other Appeal 37 pursuant
to Rule 23(1) and (2) of the Working Procedures. On 15 September 2010, New Zealand filed an other

31Panel Report, para. 8.1(d); see also paras. 7.1089, 7.1090, and 7.1095.
32Panel Report, para. 8.1(e); see also para. 7.1403. With respect to New Zealand's claim relating to the
first requirement in Article 2.2 of the SPS Agreement, that measures be applied only to the extent necessary to
protect human, animal or plant life or health, the Panel recalled that it had already found the measures at issue to
be inconsistent with the requirement in Article 2.2 that Members' sanitary and phytosanitary measures be based
on scientific principles and not be maintained without sufficient scientific evidence. ( Ibid., para. 7.1409) The
Panel considered that a positive solution to the dispute did not require it to assess whether the same measures
violate another requirement in Article 2.2. Thus, the Panel deemed it unnecessary to rule on this
"Article-5.6-related Article 2.2 claim by New Zealand" or "to engage in a detailed analysis of the relationship
between the third condition of the Article 5.6 test and the first requirement of Article 2.2" of the SPS Agreement.
(Ibid., para. 7.1410)
34WT/DS367/13 (attached as Annex I(a) to this Report). By letter dated 16 September 2010, Australia
requested authorization from the Appellate Body Division hearing this appeal to corr ect a clerical error in its
Notice of Appeal, pursuant to Rule 18(5) of the Working Procedures . On 17 September 2010, pursuant to
Rule 18(5), the Division invited New Zealand and the th ird participants to comment on Australia's request. No
objections to Australia's request were received. On 23 September 2010, the Division authorized Australia to
correct the clerical error in its Notice of Appeal. (WT/DS367/13/Corr.1 (attached as Annex I(b) to this Report))
35WT/AB/WP/5, 4 January 2005. (Note: Although this version of the Working Procedures applied to this
appeal, it has been replaced by a subsequent version, WT/AB/WP/6, 16 August 2010)
36Pursuant to Rule 21 of the Working Procedures.
37WT/DS367/14 (attached as Annex II to this Report).

appellant's submission.
38 On 27 September 2010, Australia and New Zealand each filed an appellee's
submission.39 On the same day, the European Union, Japan, and the United States each filed a third
participant's submission40 and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
notified its intention to appear at the oral hearing as a third participant. 41 On 28 September 2010,
Chile and Pakistan each notified its intention to appear at the oral hearing as a third participant.42
9. On 1 September 2010, the Division hearing this a ppeal received a joint letter from Australia
and New Zealand requesting the Appellate Body to au thorize public observation of the oral hearing.
On 2 September 2010, the Division invited the third participants to comment in writing on the joint
request of Australia and New Zealand and on the l ogistical arrangements proposed in the request.
Comments were received on 6 September 2010 from th e European Union, and on 7 September 2010
from the Separate Customs Territory of Taiwan, Pe nghu, Kinmen and Matsu, and the United States.
These third participants expressed support for the request by the participants. In a Procedural Ruling
dated 14 September 2010, the Division authorized pub lic observation of the oral hearing by means of
simultaneous closed-circuit television broadcast, shown in a separate room.43
10. The oral hearing in this appeal was held on 11 and 12 October 2010. The participants and
four of the third participants (Chile, the Europ ean Union, Japan, and the United States) made oral
statements. The participants and third participan ts responded to questions posed by the Members of
the Division hearing the appeal.
II. Arguments of the Participants and the Third Participants
A. Claims of Error by Australia – Appellant
11. First, Australia appeals the Panel's finding that the 16 measures at issue, both as a whole and
individually, constitu te SPS measures within the meaning of Annex A(1) to the SPS Agreement .
Second, Australia appeals the Panel's finding that the measures at issue regarding fire blight and
ALCM, as well as the requirements identified by Ne w Zealand as "general" measures that are linked
to all three pests at issue in the present dispute, are inconsistent with Articles 5.1 and 5.2 of the
SPS Agreement and, by implication, with Article 2.2 of the SPS Agreement. Third, Australia claims

38Pursuant to Rule 23(3) of the Working Procedures.
39Pursuant to Rules 22 and 23(4) of the Working Procedures.
40Pursuant to Rule 24(1) of the Working Procedures . On 29 September 2010, the Director of the
Appellate Body Secretariat received the executive summary of the United States' third participant's submission.
By letter dated 30 September 2010, the Division informed the United States that the executive summary would
not be accepted because it had been submitted after 27 September 2010, the de adline for filing a third
participant's submission. The original and copies of the executive summary were returned to the United States.
41Pursuant to Rule 24(2) of the Working Procedures.
42Pursuant to Rule 24(4) of the Working Procedures.
43The Procedural Ruling is attached as Annex III to this Report.

that the Panel failed to engage with all of the im portant evidence before it, failed to understand the
methodology employed in the IRA, and, thus, faile d to make an objective assessment of the facts
before it, as required by Article 11 of the DSU. Finally, Australia appeals the Panel's finding that
Australia's measures at issue are more trade restri ctive than required and are therefore inconsistent
with Article 5.6 of the SPS Agreement.
1. Annex A(1) to the SPS Agreement: "SPS Measure"
12. Australia requests the Appellate Body to find that the Panel applied an incorrect legal
interpretation of the definition of sanitary and ph ytosanitary ("SPS") measure in Annex A(1) to the
SPS Agreement and, accordingly, to reverse the Panel's fi nding at paragraphs 7.172 and 8.1(b) of the
Panel Report that the measures at issue individually constitute SPS measures within the meaning of
that definition. Australia accepts that all of the measures at issue constitute SPS measures when taken
as a whole or "grouped appropriately". 44 However, Australia contends that the Panel erred in finding
that the 16 measures at issue cons titute SPS measures not only as a whole, but also individually, and
that the Panel failed to assess whether the 16 measures individually meet the requirements of
Annex A(1) to the SPS Agreement.
13. Australia contends that, in order for a measure to fall discretely within the definition of an
SPS measure in the first sentence of Annex A(1), it mu st have three essential characteristics. First, it
must imply the taking of some discrete and recognizable action or course of action as a means to an
end. Second, the measure must be applied, that is, deployed or put into practical operation. Third, the
measure must be so applied for a specific purpose, namely, to protect against a specified category of
risk. The last sentence of the definition in Annex A(1) serves to ensure that the things to which it
refers are not excluded a priori from being deemed to be SPS measur es. Australia stresses, however,
that the last sentence does not mean that any requirement, procedure, or process described in the list is
necessarily to be classified as an SPS measure, and does not undermine the essential characteristics of
an SPS measure required by the first sentence of th e definition. It follows that, for a panel to
characterize a measure as an SPS measure, the panel mu st identify, practically and purposively, some
action or course of action (including an identifiabl e omission) that a Member puts into practical
operation for the purpose of protecting against some re levant risk. Activities or requirements, such as
administrative processes or procedures, that have no operation other than to enhance the efficacy of
some active mechanism for protecting animal or plant life or health from relevant risk, should not be
identified as separate SPS measures. Such ancilla ry processes or procedures should be identified
together with the mechanisms to which they rela te collectively as amounting to a single, composite

SPS measure. Otherwise, cautions Australia, poten tially every detail of an administrative regime
would be opened up for separate evaluation of compliance with the SPS Agreement.
14. Australia maintains that its conception of an SPS measure is supported by the 2008 Glossary
of Phytosanitary Terms , the IPPC's International Standards for Phytosanitary Measures ("ISPM"s)
ISPM No. 5
45, which draws a distinction between a phytosanitary measure and a phytosanitary
procedure. A phytosanitary measure is "[a]ny legislati on, regulation or official procedure having the
purpose to prevent the introduction and/or spread of quarantine pests, or to limit the economic impact
of regulated non-quarantine pests"; a phytosanitary procedure is "[a]ny official method for
implementing phytosanitary measures including the pe rformance of inspections, tests, surveillance or
treatments in connection with regulated pests".
46 Australia asserts that these definitions make clear
that a phytosanitary procedure, aimed simply at implementing a phytosanitary measure, is not itself a
distinct phytosanitary measure.
15. With regard to the present dispute, Australia a lleges that the Panel failed to ask whether each
"measure" identified by New Zealand individually met the essential characteristics of the definition of
an SPS measure in Annex A(1)(a). The Panel's fi nding that all 16 measures have a purpose that
corresponds to Annex A(1)(a) is not sufficient fo r each of them individually to amount to an SPS
measure. Indeed, certain requirements identifie d by New Zealand were dependent on a principal
measure and would be meaningless and ineffective to achieve any protection from risk if considered
individually. Australia illustrates this point by referring to what New Zealand identified as
Measure 3. This measure requires that an orchard inspection methodology be developed and
approved that addresses issues such as: visibility of symptoms in the tops of trees; the inspection
time required; the number of trees to be inspected to meet the efficacy level; and training and
certification of inspectors.
47 Australia argues that, taken alone, this requirement would be
meaningless and ineffective for achieving any pr otection from risk, and that it would only have
meaning insofar as it is ancillary to the principal measure requiring that apples be sourced from areas
free from fire blight disease symptoms. Australia explains that what New Zealand identified as
Measures 1, 2, 3, 4, 5, 8, 15, 16, and 17 are pr operly seen as a single, composite SPS measure, rather

45Glossary of Phytosanitary Terms , 2008 (ISPM No. 5, FAO, Rome (Panel Exhibit AUS-164)).
Regarding ISPMs, see further explanation, infra, footnote 195 of this Report.
46Australia's appellant's submission, para. 59 (quoting ISPM No. 5, supra, footnote 45 of this Report).

than as separate SPS measures. 48 Overall, adds Australia, the Pa nel should have found that Australia
had not 16 SPS measures, but four: two for fire blight, one for European canker, and one for ALCM.
For fire blight, the two measures are inspection of so urce orchards and disinfection of fruit; and, for
ALCM, the measure is: the option of inspection of 3000 fruit for export and, if necessary, treatment
or rejection of fruit for export.
2. Articles 5.1, 5.2, and 2.2 of the SPS Agreement
16. Australia requests the Appellate Body to reverse the Panel's findings that its measures for fire
blight and ALCM, as well as the general measures, are inconsistent with Articles 5.1, 5.2, and 2.2 of
the SPS Agreement . Australia argues that, in so finding, the Panel erred because it applied an
incorrect legal interpretation of "risk assessme nt" and misapplied the criteria identified in
paragraphs 590-592 of the A ppellate Body reports in US/Canada – Continued Suspension 49 for a
panel's analysis of whether a risk assessment complies with Articles 5.1 and 5.2.
17. In Australia's view, the Appellate Body, in US/Canada – Continued Suspension , confirmed
the limited role of a panel reviewing an SPS measure for conformity with Articles 5.1 and 5.2. The
panel is not to itself conduct a risk assessment but to review the risk assessment relied upon by the
Member in order to determine whether the risk assess ment is "objectively justifiable", rather than
whether it is "correct". 50 Referring, in particular, to para graph 591 of those Reports, Australia
explains that the Appellate Body considered that this requires a panel to: (i) identify the scientific
basis upon which the SPS measure was adopted; (ii) verify that the scientific basis comes from a
respected and qualified source; (iii) assess whethe r the reasoning articulated on the basis of the
scientific evidence is objective and coherent; and (iv) determine whether the results of the risk
assessment sufficiently warrant the SPS measure at issue.

48Australia's appellant's submission, para. 66, and additional clarifications provided at the oral hearing
in this appeal. Thes e Measures are set out infra, para. 125 of this Report. In essence, they require: that apples
be sourced from areas free from fire b light disease symptoms; that orchards/blocks be inspected for fire blight
disease symptoms; that an appropriate orchard/block inspection methodology be developed and approved; that
an orchard/block be suspended for the season on the basis of evidence of an attempt to remove or hide
symptoms of fire blight; that an orchard/block be suspended for the season upon detection of any visual
symptoms of fire blight; that packing houses registered for export of apples process only fruit sourced from
registered orchards; that Australian Quarantine and Inspection Service officers be involved in orchard
inspections, verification of packing house procedures, and in fruit inspection and treatment; that New Zealand
ensure that all orchards registered for export to Australia operate under standard commercial practices; and that
packing houses provide details of the layout of premises.
49In this Report, we use the term "US/Canada – Continued Suspension" to refer to both Appellate Body
Reports, US – Continued Suspension (WT/DS320/AB/R) and Canada – Continued Suspension
(WT/DS321/AB/R).
50Australia's appellant's submission, para. 68 (referring to Appellate Body Reports, US/Canada –
Continued Suspension, para. 590).

18. Regarding the Panel's findings that intermediate conclusions in the IRA were not supported
by "adequate" or "sufficient" scien tific evidence, Australia argues that the Panel applied a standard of
scientific sufficiency "well beyond anythi ng required by the first criterion in US/Canada – Continued
Suspension and wholly at odds with Japan – Agricultural Products II ".
51 According to Australia, if a
risk assessment within the meaning of Article 5.1 gi ves rise to significant instances of uncertainty or
inconclusiveness, a risk assessor should still be able to exercise expert judgement to deal with such
uncertainty, taking into account risk assessment tec hniques developed by the relevant international
organizations, such as those found in ISPM No. 2 and ISPM No. 11.
19. Australia claims that, while the available sci entific evidence may be sufficient to conduct a
risk assessment, thus foreclosing recourse to Article 5.7 of the SPS Agreement, such evidence may
still be inconclusive or uncertain, and in such cases a risk assessor may resort to expert judgement in
reaching its conclusions. The fact that a circumstance may present particular methodological
difficulties does not excuse the risk assessor from evaluating the risk. Australia claims that, where
there is little available scientific evidence, th e phrase "as appropriate to the circumstances" in
Article 5.1 provides a measure of flexibility in terms of how the risk assessment is conducted.
20. According to Australia, the flexibility to adap t risk assessment methodologies as a function of
the available scientific evidence is reinforced by th e reference in Article 5.1 to the risk assessment
techniques developed by internationa l organizations. In this respect, Australia notes that the relevant
risk assessment standards of the IPPC, including ISPM No. 2 and ISPM No. 11, recognize the need
for expert judgement in risk assessments in circ umstances of scientific uncertainty arising from
incomplete, inconsistent, or conflicting data.
21. Regarding the Panel's findings that intermedia te conclusions in the IRA were not "objective
and coherent", Australia argues that the Panel app lied a standard "well beyond anything required by
the third of the criteria in US/Canada – Continued Suspension and wholly at odds with Japan –
Agricultural Products II ".52 According to Australia, it was enough for Biosecurity Australia to
explain its overall methodology, identify the availa ble scientific evidence and the areas and degree of
scientific uncertainty, record any expert judgement made, and ensure that an y expert judgement fell
"within a range that could be considered legitimate by the standards of the scientific community".53

22. In Australia's view, the criterion identified in US/Canada – Continued Suspension that "the
reasoning articulated on the basis of the scientific ev idence is objective and coherent" is not directed
at assessing the quality of the reasoning as an end in itself, but rather at determining whether the
"particular conclusions" drawn by the Member asse ssing the risk are sufficiently supported by the
scientific evidence relied upon. The application of this criterion thus "focuses on the relationship
between the scientific evidence and the conclusions ultimately reached by the Member as the basis for
an SPS measure". 54 Australia argues that the question of wh ether a particular conclusion ultimately
reached by a Member as the basis for the SPS m easure is sufficiently supported by "available
scientific evidence" is properly an swered by asking whether the particular conclusion is rationally or
objectively related to that scientific evidence, not by asking whether the conclusion is correct or
whether it is the same conclusion that the Panel, or an expert, would have reached.
23. According to Australia, Biosecurity Australia w as not required to explain in greater detail
precisely how it drew each intermediate conclusion. Australia claims that the Panel erred in asking
whether itself or its appointed experts would have made the same judgement as Biosecurity Australia,
rather than whether the expert judgements made by Biosecurity Australia at intermediate steps in the
IRA fell "within a range that could be consider ed legitimate by the standards of the scientific
community".55
24. Australia also argues that the Panel erred in requiring that Biosecurity Australia explain
precisely how it arrived at the expert judgements it made at intermediate steps in the IRA. Australia
claims that no such obligation exists in Article 5.1 of the SPS Agreement . The standards of
"documentation" and "transpare ncy" set forth in ISPM No. 2 and ISPM No. 11 only require
identification of where expert ju dgement has been used and an explanation of what scientific
uncertainty has given rise to the need for that e xpert judgement. However, ISPM No. 2 and ISPM
No. 11 do not suggest any need for an explanation of how a particular expert judgement was reached.
The IRA was transparent in its use of expert judge ment and noted that, at each intermediate step
where the inconclusive or incomplete nature of sci entific data gave rise to scientific uncertainty, the
IRA identified and recorded the expert judgement requi red in the light of that scientific uncertainty.
Australia also points out that the IRA included an explicit statement documenting the process of
making expert judgements and the constraints observed.
25. Australia further claims that the Panel erred be cause it failed to assess the materiality of the
faults it found in the intermediate conclusions reach ed in the IRA. Australia, relying on the panel
report in Australia – Salmon (Article 21.5 – Canada) , argues that the Panel should have asked, but

54Australia's appellant's submission, para. 76. (original underlining)

erroneously failed to ask, whether any alleged flaw s in the IRA's reasoning were "so serious" as to
undermine "reasonable confidence" in the risk assessment as a whole.
56
26. Australia then illustrates how these errors of in terpretation and application under Article 5.1
of the SPS Agreement affected the Panel's analysis of the IRA' s assessment of the risk of fire blight
and ALCM.
(a) Measures regarding Fire Blight
27. Regarding importation step 1 57 (the probability that Erwinia amylovora is present in source
orchards in New Zealand), Australia argues that the Panel adopted Dr. Paulin's view that the estimate
had not been shown to be "true" 58 rather than determining, based on his expert testimony, whether the
estimate was within a legitimate range. Australia also argues that the Panel failed to assess the
significance of any overestimation under importation step 1, either to the overall probability of
importation or to the overall assessment of risk.
28. Regarding importation step 2 (the probability that fruit picked from an orchard in which
Erwinia amylovora is present will itself be either infested or infected), Australia claims that, in relying
on Dr. Paulin's testimony that no general and reas onable conclusion could be based on the disparate
results of the various scientific studies reviewed by the IRA, the Panel failed to adhere to the
Appellate Body's guidance that scientific uncertain ty or inconclusiveness does not excuse the risk
assessor from evaluating the risk, and failed to properly assess whether the judgement made was
within a range that could be considered legitim ate according to the stan dards of the scientific
community. Australia further contends that th e Panel failed to assess the significance of any
overestimation under importation step 2, either to the overall probability of importation or to the
overall assessment of risk.
29. Regarding importation step 3 (the probability that clean fruit is contaminated with Erwinia
amylovora during picking and transportation to a packing house), Australia argues that, in finding that

56Australia's appellant's submission, paras. 84 and 90 (quoting Panel Report, Australia – Salmon
(Article 21.5 – Canada), para. 7.57).
57Australia explains, at paragraphs 33-35 of its appella nt's submission, that the IRA, first, identified a
series of discrete steps at which infection or infestation might occur beginning with the sourcing of apples from
orchards in New Zealand and ending with their arrival in Australia after passing through various stages of
processing and transportation. Eight points at which an apple could potentially become or remain infested or
infected with the pest were identif ied and the conditional likelihood of infestation or infection occurring or
remaining at each point was estimated. The eight point s were labelled as numbered "importation steps". The
importation steps do not describe a single, linear process of infection or infestation. Rather, there are ten distinct
pathways through the importation steps by which an apple that is infested or infected may be imported
(importation scenarios). The probability of an infected or infested apple being imported into Australia was
calculated as the sum of the probabilities for each of these ten alternative importation scenarios.

the studies relied upon by the IRA cannot constitute an adequate scientific basis for a coherent and
objective analysis, the Panel overlooked the prac tical necessity for a risk assessor to make a
judgement even when confronted by limited scientif ic evidence. Moreover, Australia contends that
the Panel erred in relying on the experts' views th at the probability of contamination estimated by the
IRA seemed "rather high" 59, instead of asking whether the estimate was within a range that could be
considered legitimate according to the standards of the scientific community, and that it failed to
assess the significance of any overestimation under importation step 3, either to the overall probability
of importation or to the overall assessment of risk.
30. Regarding importation step 5 (the probability that clean fruit is contaminated with Erwinia
amylovora during processing in the packing house), Austra lia argues that the Panel erred in finding
that the estimate for this step was not objective a nd coherent, because there was no indication in the
IRA of how the results of certain scientific studies referenced in the IRA we re taken into account.
The Panel should instead have verified whether the estimate was within a range that could be
considered legitimate according to the standards of the scientific community. According to Australia,
the Panel also erred in failing to assess the significance of any overestimation under importation
step 5 either to the overall probability of importation or to the overall assessment of risk.
31. Regarding importation step 7 (the probability that clean fruit will become contaminated with
Erwinia amylovora during palletization, quality inspection, containerization, and transportation),
Australia contends that the Panel failed to verify wh ether the estimate for this step was within a range
that could be considered legitimate according to the standards of the scientific community,
irrespective of any perceived flaw in the relations hip between the numerical range and the qualitative
descriptor. Moreover, Australia argues that the Panel erred by not assessing the significance of any
overestimation under importation step 7, either to the overall probability of importation or to the
overall assessment of risk, and observes that the contribution made by importation step 7 to the
overall probability of importation of infested or infe cted fruit was "several orders of magnitude less
than could be considered material".60
32. Regarding "exposure" (the transfer of Erwinia amylovora from infested or infected apple
waste to a susceptible host plant), Australia argues th at, in finding that the IRA's conclusions were not
supported by scientific evidence, the Panel overl ooked that, while direct scientific evidence on
specific mechanisms of transfer ma y be lacking, it is established, including through the testimony of
the Panel's appointed experts, that transfer ca n occur. Confronted with such evidence and
uncertainties, the IRA team was not excused from maki ng an assessment of risk. In Australia's view,

in finding that the probability of transfer should be commensurate to the extremely low likelihood of
transmission through one transfer scenario, the Panel failed to give any consideration to the range of
estimates that would be considered legitimate acco rding to the standards of the scientific community,
and displaced the judgement made by the IRA in favour of its own implicit assessment of the
probability of transfer as "extremely low".
33. Regarding the use of uniform distribution
61, Australia argues that, in reaching its conclusion,
the Panel relied on Dr. Sgrillo's testimony that a triangular distribution would have been more
appropriate, without assessing the significance of Dr. Schrader's testimony that a uniform distribution
is useful when there is insufficient information to estimate a most likely value. The Panel should have
verified whether the decision by the IRA to use a uniform distribution was within a legitimate range
of available judgements, not whether this decision was the correct or the pr eferable one. Australia
adds that the Panel's error in this regard directly affects, and similarly taints, the Panel's somewhat
unclear finding with respect to the IRA's conclusions on the probability of spread.
34. Regarding the likelihood of establishment of fire blight in Australia, Australia argues that the
Panel's criticism that the IRA failed to note th e difference between expe riments taking place under
ideal conditions in the laboratory and under natural circumstances highlights the Panel's failure to ask
the correct question, that is, whether the IRA's est imate of the probability of establishment was within
a range that could be considered legitimate accord ing to the standards of the scientific community,
irrespective of any differences between laboratory and natural conditions.
35. Regarding the potential biological and economic consequences associated with the entry,
establishment and spread of fire blight, Australia clai ms that, in finding that the IRA's assessment did
not rely on adequate scientific evidence, the Panel relied almost exclusively upon the testimony of one
expert, Dr. Paulin, and unduly relied on the scientif ic aspects of the evidence, thereby failing to
appreciate that Article 5.3 of the SPS Agreement requires a risk assessment to assess "potential"
consequences and take into account "relevant economic factors". Australia argues that, had the Panel
properly appreciated the meaning of a "risk assessme nt" in this regard, it would not have overlooked
the evidence of the economic impact of the outbreaks of fire blight at Hawkes Bay, New Zealand,
in 1998, and in Michigan, United States, in 2000, which were reviewed in the IRA.

61Australia explains, at paragraph 42 of its appellant's submission, that in its quantitative assessment of
the likelihood of entry, establishment and spread, the IRA evaluated each step in the schemata for importation
and distribution, utilization, waste generation, and disposal using a probability distribution. The IRA used pert,
triangular, and uniform distributions as appropriate. Each of those distributions has as parameters minimum and
maximum values, but only the pert and triangular distributions have as a third parameter the "most likely value".
Australia explains that uniform distributions (where any value contained in the range between the minimum and
maximum values occurs with equal probability) were used in cases where insufficient information was available
to determine the most likely value.

(b) Measures regarding ALCM
36. Australia claims that the Panel erred in findi ng that certain matters had not properly been
taken into account in the IRA, or that the IR A was based upon incorrect assumptions, without asking
"whether the judgement in fact made in the IRA, notwithstanding any perceived shortcomings in the
reasoning to that judgement, was within a range that could be considered leg itimate according to the
standards of the scientific community". 62 Australia adds that the Pane l failed to assess the materiality
of the errors it found, and failed to verify whethe r those errors took the judgements made in the IRA
outside a legitimate range.
37. Australia recalls that, with respect to the pr obability of importation of ALCM, the IRA made
two separate estimates for ALCM. The first, base d on the IRA's methodology, yielded an estimated
probability of 4.1 per cent. The second, based on August 2005 trade data supplied by New Zealand,
yielded an estimate of between 0.1 and 0.38 per cent. The Panel found that the IRA's reasoning
regarding the viability of ALCM was not objectivel y justifiable because it did not take into account
the proportions of cocoons with viable ALCM, in th e light of the possible incidence of the parasitic
wasp Platygaster demades . At no point did the Panel find that the estimate of probability of
importation was not within a legitimate range. Moreove r, in the Article 5.6 section of its Report, the
Panel described the infestation rate of 0.1-0.38 pe r cent as "more realistic" than the infestation rate
of 4.1 per cent.63 Australia points out that the measures relating to ALCM were adopted on the basis
of the 0.1-0.38 per cent infestation rate and argues, accordingly, that the Panel has found "abstract
fault" in the IRA's "perceived failure" to take into account viability even though the Panel itself
concluded that the infestation rate actually relied upon was "more realistic".64
38. With respect to establishment and spread of ALCM, Australia notes that the Panel assessed
four alleged flaws and found against the IRA with respect to three of them. The Panel failed,
however, to ask the "correct" question, namely, wh ether any of these flaws meant that the estimate
reached by the IRA was outside a legitimate range.
39. Regarding the potential biological and economic consequences associated with the entry,
establishment and spread of ALCM, Australia claims that the Panel erred in relying on Dr. Cross'
testimony that different impact scores for particul ar factors "would be more appropriate" or "more
objective and credible", while ignoring Dr. Cross' statement that he would not change the IRA's
overall rating of the consequences of ALCM ("low") and that Australia's analysis was objective and

credible.
65 Australia contends that the Panel failed to enquire whether the overall judgement of the
IRA on the potential biological and economic con sequences of ALCM was within a legitimate range,
having regard to the requirement to assess "poten tial" consequences and taki ng into account relevant
economic factors.66
3. Article 11 of the DSU
40. Australia requests the Appellate Body to find that the Panel failed to observe its duty under
Article 11 of the DSU to make an objective assessme nt of the matter before it, and to reverse the
Panel's findings that Australia's measures for fire blight and ALCM, as well as the general measures,
are inconsistent with Articles 5.1, 5.2, and 2.2 of the SPS Agreement. Australia claims that the Panel
failed to make an objective assessment of the facts before it, as required by Article 11 of the DSU,
because it failed to engage with all of the importa nt evidence before it and failed to understand the
methodology employed in the IRA.
(a) Treatment of Expert Testimony
41. Australia argues that the Panel disregarded critical aspects of the appointed experts' testimony
that were favourable to Australia. A panel must en gage with all of the impor tant evidence before it
that is relevant to the matter at issue and will err if it fails to give significant evidence proper, genuine,
and realistic consideration and assess its significance. In this respect, Australia relies on the Appellate
Body reports in US/Canada – Continued Suspension and argues that if, in those proceedings, the
panel erred by merely reproducing testimony and not assessing its significance, the Panel in the
present dispute committed an even more serious error, because in several instances it overlooked
entirely testimony that was favourable to Australia's case. 67 While a panel has a margin of discretion
as the trier of facts, such discretion does not underm ine the panel's overriding obligation to make an
objective assessment of the facts. Merely reproducing testimony without discussing it, or
disregarding it entirely, constitutes a failure to make an objective assessment of the facts. 68 Australia
stresses, in this regard, the importance of the overlooked testimony to its case.
42. In respect of the overall probability of importati on of infested or infected apples, Australia
argues that the Panel incorrectly characterized Dr. Deckers as having stated that the overall likelihood
of importation "is probably" overestimated, when Dr. Deckers had in fact stated that such probability

"could be" overestimated.69 The Panel further failed to consider that Dr. Deckers had also stated that
he did not think that the estimation in the importati on steps was exaggerated. Dr. Deckers' statement
that the IRA's assessment of the probability of im portation was not exaggerated should be read to
qualify significantly Dr. Deckers' earlier statement that the probability of importation "could be"
overestimated. By failing to reproduce and assess Dr . Deckers' position comprehensively, the Panel
failed to make an objective assessment of the ma tter, as required under Article 11 of the DSU.
Australia adds that this error was made worse by the fact that the Panel referred to Dr. Deckers'
testimony that was favourable to Australia in a foot note "in peremptory and dismissive terms: 'But
see, Dr. Deckers' reply in Transcript of the Panel's meeting with experts, para. 259.'"
70
43. In respect of the Panel's analysis of "exposure", Australia argues that the Panel failed to make
an objective assessment of the facts, because it relie d on Dr. Deckers' initial testimony that the chance
of epiphytic bacteria being transmitted to the su sceptible organs of a host plant at the appropriate
moment to realize an infection was "rather sma ll", without reproducing or assessing the significance
of Dr. Deckers' clarifying testimony that he thought the IRA's estimation of the probability of
exposure of 0 to 10-6 (zero to one in one million) was "true".71
44. Regarding the Panel's review of the IRA's anal ysis of the potential biological and economic
consequences of fire blight, Australia claims that the Panel acted inconsistently with Article 11 of the
DSU, because it relied exclusively on certain testim ony by Dr. Paulin to the effect that certain
individual impact scores in the assessment of con sequences "could be exaggerated", but failed to
reproduce or assess the significance of testimony fa vourable to Australia given by Dr. Deckers and
Dr. Paulin, both of whom rated the overall poten tial biological and economic consequences of fire
blight as "high". Australia points out that the onl y reference in the Panel Report to Dr. Deckers'
testimony favourable to Australia on this point w as a bare reference in a footnote preceded by the
words "[b]ut see". 72 Australia also claims that the Panel act ed inconsistently with Article 11 of the
DSU, because it proceeded on the erroneous basis th at an assessment of consequences must be based
only on scientific evidence and failed, thereby, to e ngage with or refer to the evidence of actual
production losses caused by outbreaks of fire blight at Hawkes Bay, New Zealand, in 1998, and in
Michigan, United States, in 2000.

69Australia's appellant's submission, para. 137 (quoting Panel Report, para. 7.356; and Dr. Deckers'
response to Panel Question 34, Panel Report, Annex B-1, para. 237).
70Australia's appellant's submission, para. 137 (quoting Panel Report, footnote 1595 to para. 7.356).
71Australia's appellant's submission, paras. 139 and 140 (quoting Dr. Deckers' response to Panel
Question 42, Panel Report, Annex B-1, para. 271).
72Australia's appellant's submission, para. 142 (quoting Panel Report, footnote 1796 to para. 7.465).

45. Australia contends that the Panel reproduced, but dismissed without explanation, the
testimony given by Dr. Deckers that "[t]he limitation of apple exports to mature symptomless apples
is not enough to achieve Australia's ALOP".
73 According to Australia, the Panel failed to assess the
significance of this testimony not only in relation to New Zealand's claims under Article 5.6 of the
SPS Agreement, but also in relation to Articles 5.1, 5.2, and 2.2 of the SPS Agreement, because this
testimony also shows that Australia's SPS measures were sufficiently warranted by the IRA.
46. Regarding the use of uniform distribution, Aust ralia argues that the Panel's finding that such
use is unjustified is based on Dr. Sgrillo's testimony that the IRA team should have used a triangular
distribution, and on only part of Dr. Schrader's testimony, opining that uniform distribution is the least
realistic of the three types of distribution. Australia contends, however, that the Panel acted
inconsistently with Article 11 of the DSU by fa iling to reproduce or assess the significance of
Dr. Schrader's additional statement, favourable to Australia, that uniform distribution is useful in
situations presenting "a high degree of uncertainty" and where there is insufficient information to
determine the most likely value.74
47. Regarding the IRA's assessment of potential bi ological and economic c onsequences of entry,
establishment and spread of ALCM, Australia ar gues that the Panel committed an error under
Article 11 of the DSU by failing to reproduce or assess the significance of testimony given by
Dr. Cross that was favourable to Australia. The Panel reproduced Dr. Cross' testimony opining that
certain individual impact scores assigned by the IRA were too severe and that a more credible score
could be assigned, but the Panel failed to reproduce or assess the significance of Dr. Cross' testimony,
favourable to Australia, that even assuming that th e most severe scores (for plant health and control
treatment) were reassigned based on his appreciation of the facts, this would not result in a change of
the rating of the overall consequences as "low" and that , in this respect, "the conclusion of Australia's
analysis was objective and credible".
75
(b) The Panel's Alleged Misunderstanding of the IRA
48. Australia further argues that the Panel acted inconsistently with Article 11 of the DSU
because it failed to understand the risk assessmen t methodology employed in the IRA and, in
particular, the choice of a probability interval of 0 to 10 -6 (zero to one in one million) with a midpoint
(if uniform distribution is used) of 5 × 10 -7 (0.5 in one million) for events with a "negligible"

73Dr. Deckers' response to Panel Question 15, Panel Report, Annex B-1, para. 117.
74Australia's appellant's submission, paras. 147 and 148 (quoting Dr. Schrader's response to Panel
Question 135, Panel Report, Annex B-1, paras. 781-783).
75Australia's appellant's submission, paras. 149 and 150 (quoting Dr. Cross' response to Panel
Question 96, Panel Report, Annex B-1, para. 561).

likelihood of occurring. Australia contends that, if the Panel misunderstood in a material respect what
the risk assessor had done, it necessarily failed to perform its duties under Article 11 of the DSU.
49. Australia recalls that, in the IRA's semi -quantitative risk assessment methodology, a
quantitative assessment of entry, establishment and spread was combined with a qualitative
assessment of potential consequences. In exercisi ng expert judgement to arrive at an estimated
probability distribution, the IRA team was not c onstrained by the intervals suggested by the
nomenclature. Indeed, that nomenclature, wh ich defined correspondence between a so-called
"negligible" event and a probability interval of 0 to 10 -6 was, in and of itself, inevitably arbitrary. The
relevant issue was that the probability distribution assigned to particular events was not arbitrary. The
qualitative label "negligible" was assigned to the qua ntitative range, rather than the range being
assigned to the label. Australia contends th at at the steps where the interval 0 to 10 -6 was used
(importation step 7 and "exposure") the relevant question for the Panel was whether the estimate was
within a range that might be considered legitima te according to the standards of the scientific
community, not whether the definitional corres pondence between the range and the label was
justified.
50. Australia also argues that the Panel, in fi nding that the methodological flaws constituted an
independent basis for the invalidity of the IRA, fa iled to acknowledge that the IRA team used the
interval of 0 to 10 -6 at just two points (importation step 7 and "exposure") and in combination with
uniform distribution only for "exposure". The Pane l's conclusion that the alleged methodological
flaws were serious enough to cons titute an independent basis for the IRA's invalidity cannot stand if
the limited uses of the impugned methodologies are understood in their broader context. Australia
observes in this regard that, based on the contested interval, only 72 clean apples were estimated to
become contaminated at importation step 7, which Australia argues is an insignificant number relative
to the 6 million infested apples that the IRA estimated would be imported annually.
51. Australia concludes that, without the multiple failures to observe its duties under Article 11 of
the DSU, the Panel should have found that Austra lia's SPS measures for fire blight and ALCM, as
well as the general measures linked to both pests, were consistent with Articles 2.2, 5.1, 5.2, and 5.6
of the SPS Agreement.
4. Article 5.6 of the SPS Agreement

52. Australia requests the Appellate Body to reverse the Panel's conclusion, in paragraph 8.1(e) of
the Panel Report, that the measures imposed in resp ect of fire blight and ALCM were more trade
restrictive than required and therefore inconsistent with Article 5.6 of the SPS Agreement. Australia
further requests the Appellate Body to reverse the two intermediate fi ndings upon which this

conclusion was based: that New Zealand had ra ised a sufficiently convincing presumption that
restricting imports of New Zealand apples to mature, symptomless apples was an alternative measure
with respect to fire blight that would meet Australia's appropriate level of protection
76; and that
New Zealand had made a prima facie case that the inspection of a 600-fruit sample of each import lot
would be an alternative measure with respect to AL CM that would meet Australia's appropriate level
of protection.77
53. Australia identifies two bases for reversal of the Panel's findings under Article 5.6. First,
Australia argues that the Panel's findings under Artic le 5.6 should be reversed consequentially upon a
reversal of the Panel's findings under Articles 5.1, 5.2, and 2.2 of the SPS Agreement. According to
Australia, the Panel's findings under Article 5.6 are based on its previous findings under Articles 5.1,
5.2, and 2.2. Thus, if the Appellate Body reverses the Panel's findings under Articles 5.1, 5.2, and 2.2
the basis for the Panel's findings relating to Article 5.6 would fall, because those findings could not be
sustained on their own terms.
54. Second, irrespective of its arguments under Article s 5.1, 5.2, and 2.2, Australia alleges that
the Panel misinterpreted the requirements of Article 5.6 and misapplied the rules governing the
burden of proof. Although the Panel correctly stat ed the burden of proof at the outset and at the
conclusion of its analysis, the Panel in fact app lied a significantly lower standard. The Panel relied
"virtually entirely"78 upon its ultimate finding under Article 5. 1 as to the IRA's exaggeration of risk
associated with the importation of apples. With respect to both fire blight and ALCM, the Panel
purported to consider whether the alternative meas ures would meet Australia's appropriate level of
protection, but in fact only reviewed the perceived inadequacy of the scientific basis for intermediate
estimates in the risk analysis. Even assuming arguendo that the Panel's analysis was correct, this
entitled the Panel to conclude only that, in the light of the shortcomings in the IRA, an inference that
the alternative measures would meet the appropriate level of protection was not foreclosed. This is
not sufficient to establish a prima facie case, which consists of evidence on the basis of which a panel
would be required to rule in favour of the claim. The Panel, however, "fundamentally
misunderstood"79 that New Zealand's burden was not to s how that its proposed alternative measures
"might" or "may" achieve Australia's appropriate leve l of protection, but that they "would" do so. In
Australia's view, therefore, by prematurely shifting the burden to Australia to rebut the presumption of
inconsistency, the Panel effectively reversed th e burden of proof, and requi red Australia to prove

76Panel Report, para. 7.1197.
77Panel Report, para. 7.1328.

consistency of its measures upon a showing by New Zealand of no mo re than "doubt" about whether
an alternative measure would achieve the appropriate level of protection.
55. Australia further contends that the Panel mi sinterpreted the words "appropriate level of
sanitary or phytosanitary protection" in Article 5.6. In determining whethe r an alternative measure
proposed by a complainant achieves the respondent's appropriate level of protection, a panel must
apply the definition of "appropriate level of prot ection" in accordance with Annex A(5) to the
SPS Agreement. This must also be understood by reference to the meaning of "risk" as set out in the
definition of "risk assessment" in Annex A(4). Pursuant to this definition, "risk" is the combination of
"the likelihood of entry, establishment or spread" of a pest and of "the associated potential biological
and economic consequences". The Pa nel's analysis of New Zealand's Article 5.6 claim, however,
focused solely on the likelihood of entry, establishment and spread of a pest and failed to consider any
such associated consequences. Australia submits that, without having considered the potential
consequences, the Panel could not have reached any conclusion about the "risk" associated with
New Zealand's alternative measures and, therefore, could not have properly determined whether those
measures meet Australia's appropriate level of protection.
56. Furthermore, Australia alleges that the Panel misinterpreted the requirement that there be
"another measure ... that achieves" the Member's ap propriate level of protec tion in order to establish
that the measure at issue is more trade restrictive th an required. It is not enough that the alternative
measures "could" or "might" achieve the appropriate level of protection. In its anxiousness to avoid
impermissible de novo review, the Panel failed to satisfy itself that the evidence and arguments
adduced by New Zealand demonstrate that the alternative measures "would achieve" Australia's
appropriate level of protection, and instead wrongl y relied on its findings unde r Article 5.1 regarding
the inadequacy of the IRA as also establishing incons istency with Article 5.6. However, the correct
question for a panel assessing a breach of Article 5.6 to ask itself is whether a "proper" risk
assessment would necessarily have concluded that the alternative measure "would" achieve the
Member's appropriate level of protection. 80 This does not require an impermissible de novo review,
because the panel does not have to determine what the risk in fact is, and therefore does not have to
perform a risk assessment, nor make judgements in the nature of a risk assessor. For Australia, it is
clear that, had the Panel asked itself the correct legal question, it would have answered in the
negative, because the Panel expressly recognized that a proper risk assessment might conclude that
the alternative measures exceed Australia's appropriate level of protection.

B. Arguments of New Zealand – Appellee
1. Annex A(1) to the SPS Agreement: "SPS Measure"

57. New Zealand requests the Appellate Body to up hold the Panel's findings that the 16 measures
at issue, both as a whole and individually, constitute SPS measures within the meaning of Annex A(1)
and are covered by the SPS Agreement. New Zealand characterizes Australia's conception of an
SPS measure—and, in particular, the alleged di stinction between "principal" and "ancillary"
measures—as "mere assertion" with "no basis in the SPS Agreement or the jurisprudence".81
58. New Zealand refers to Australia's argument that to not distinguish between principal and
ancillary measures would "potentially open up every detail of an administrative regime to separate
evaluation for compliance" with Articles 2.2, 5.1, 5.2, and 5.6 of the SPS Agreement .82 I n
New Zealand's view, this argument overlooks two points. First, onl y SPS measures that directly or
indirectly affect international trad e are subject to scrutiny under the SPS Agreement , and thus not
every detail is open to evaluation. Second, what is required to comply with the obligations of the
SPS Agreement depends on the particular circumstances and the nature of the measures at issue.
Where measures are closely related to each othe r and rely to a significant degree on the same
underlying science, this is relevant in determining whether those measures comply with the applicable
obligations.
59. New Zealand makes reference to Australia's ar guments that, in order to constitute an SPS
measure, a measure must have the three essential characteristics required by the first sentence of
Annex A(1) to the SPS Agreement , and that the Panel should have asked whether each measure
requires, practically and purposively, some discret e and recognizable action or course of action that
was deployed or put into practical operation for the purpose of protecting against some relevant risk.
New Zealand highlights, however, that the Panel appr oached this issue in acco rdance with the text of
the SPS Agreement and the relevant jurisprudence, rather than in accordance with the definition set
forth by Australia. The Panel considered, first, whether the purposes of the 16 measures correspond
to the purposes in subparagraphs (a) through (d) of Annex A(1); and, second, whether the measures
correspond to the "form and nature" elements in the last sentence of Annex A(1). 83 New Zealand
maintains, in any event, that all three elements of an SPS measure identified by Australia were
addressed by the Panel.

81New Zealand's appellee's submission, para. 2.6.
82New Zealand's appellee's submission, para. 2.11 (r eferring to Australia's appellant's submission,
para. 58).
83New Zealand's appellee's submission, para. 2.17 (referr ing to Panel Report, paras. 7.118 and 7.119;
and Australia's second written submission to the Panel, paras. 75 and 76).

60. With respect to the first element identified by Australia, namely, that the instrument requires
some action or course of action, New Zealand submits that the Panel confirmed that "each of
the 16 measures requires New Zealand or its appl e producers, packing houses and traders to do
something as a condition for New Zealand apples to have access to the Australian market". 84
Regarding Australia's second element, namely, whet her the measures were "deployed or put into
practical operation", the Panel found that "New Zealand needs to comply with each of the measures in
order to export apples to Australia", and that, ther efore, the measures were "deployed or put into
practical operation". 85 The Panel also addressed the third element of Australia's definition and
identified the purpose of the 16 measures. The Pane l analyzed the elements in subparagraph (a) of
Annex A(1), looking at the subject ("animal or plan t life or health"), geography ("within the territory
of the Member"), and risk ("arising from the entry, establishment or spread of pests, diseases, disease-
carrying organisms or disease-causing organisms"). For New Zealand, the Panel correctly concluded
that the 16 measures were applied to protect against a category of risk specified in subparagraph (a) of
Annex A(1).86
61. New Zealand also refers to Australia's argumen t that the exclusion of "ancillary" measures
from the definition of an "SPS measure" is supporte d by ISPM No. 5, which distinguishes between
"phytosanitary measures" and "phytosanitary pr ocedures". New Zealand responds that the
SPS Agreement's definition of SPS measure is clear and unambiguous, and does not exclude SPS
measures because they "support", "enhance", or "i mplement" other SPS measures. In addition,
New Zealand maintains that an SPS regime may well be made up of many interlinked measures. The
fact that a measure is linked to another measur e does not disqualify it from being an SPS measure in
its own right. New Zealand further submits that th e last sentence of Annex A(1) lists, as examples of
SPS measures, the very types of measures that Australia argues are "ancillary".
2. Articles 5.1, 5.2, and 2.2 of the SPS Agreement
62. New Zealand requests the Appellate Body to reject Australia's claim that the Panel
misinterpreted and misapplied Articles 5.1, 5.2, and 2.2 of the SPS Agreement and to find, instead,
that the Panel was correct in its interpretation of what constitutes a "risk assessment", and that it
properly interpreted and applied Ar ticles 5.1, 5.2, and 2.2 of the SPS Agreement according to the
guidance provided by the Appellate Body in US/Canada – Continued Suspension.

84New Zealand's appellee's submission, para. 2.21 (quoting Panel Report, para. 7.161). (underlining
added by New Zealand)
85New Zealand's appellee's submission, para. 2.22 (quoting Panel Report, para. 7.161, and Australia's
appellant's submission, para. 63).
86New Zealand's appellee's submission, para. 2.23 (referring to Panel Report, para. 7.139).

63. New Zealand argues that two of Australia's main assertions, that the standard of objectivity
and coherence set out in paragraph 59 1 of the Appellate Body reports in US/Canada – Continued
Suspension should apply only to conclusions ultimately r eached and that a panel should only review
whether expert judgements fall within a range considered legitimate by the standards of the scientific
community, are "designed to shelter the IRA from effective review".
87
64. According to New Zealand, Australia's discussi on of the concepts of "sufficient scientific
evidence" under Articles 2.2 and 5.7 of the SPS Agreement and of "as appropriate to the
circumstances" and "risk assessment techniques developed by the relevant international
organizations" under Article 5.1, is unclear. New Zealand agrees that risk assessments often involve
scientific uncertainty and that expert judgement ma y be used in such circumstances, but argues that
the third criterion in US/Canada – Continued Suspension , that reasoning in a risk assessment be
"objective and coherent" and that the "conclusions drawn find sufficient support in the scientific
evidence", applies equally to reasoning and to conclusi ons that are based in part on the application of
expert judgement.
65. New Zealand claims that, unlike the defi nition proposed by Australia, the phrase "as
appropriate to the circumstances" in Article 5.1 provi des for some flexibility regarding the nature of a
risk assessment, but does not allow deviation from Article 5.1's substantive obligations. New Zealand
recalls that, during the eight-year risk assessment process for New Zealand apples, Australia deviated
from its usual "qualitative" approach to assessing ri sk and adopted a "semi-quantitative" approach in
which the probability of entry, establishment and spread was ass essed quantitatively. New Zealand
further notes that the Panel agreed with its appoi nted experts that "a quantitative methodology should
only be used 'when reliable specific numeric data are available'".88
66. New Zealand observes that, under Article 5.1, i rrespective of the particular risk assessment
methodology adopted by a WTO Member, according to the third criterion set out in paragraph 591 of
the Appellate Body reports in US/Canada – Continued Suspension , there must be a sufficient
relationship between the scientific evidence and th e conclusions reached by the risk assessor.
ISPM No. 2 and ISPM No. 11, which establish genera l principles for risk assessment, cannot be used
to limit the specific obligations contained in Article 5.1. Specifically, New Zealand claims that, even
if a risk assessment takes into account techniques de veloped by relevant inte rnational organizations,
the risk assessment is not "sheltered" from revi ew under Article 5.1, nor can it be considered
objectively justified based only on the implementing Member's indication that expert judgement was
used.

87New Zealand's appellee's submission, para. 2.40.

67. New Zealand asserts that the "objective and coherent" standard in US/Canada – Continued
Suspension refers to "particular conclu sions", not only to "conclusions ultimately reached", and is not
replaced or weakened by ISPM No. 2 and ISPM No. 11. New Zealand claims that requiring a panel
to assess only "conclusions ultimately reached" is tantamount to prohibiting a panel from making an
objective assessment, because a panel would be prev ented from reviewing the relevant relationships
between the scientific evidence, intermediate determinations, and the ultimate conclusions reached.
68. New Zealand rejects Australia's contention that the Panel erred by considering whether the
Panel itself or its appointed experts would have ma de the same judgement as Biosecurity Australia at
intermediate steps in the IRA. In New Zealand' s view, the Panel did not do so, but instead assessed
whether the scientific evidence supporting the IRA was objective and coherent. According to
New Zealand, Australia's assertion that a panel s hould assess whether an intermediate conclusion in a
risk assessment was within a range that could be considered legitimate by the standards of the
scientific community would establish a lower thres hold for a panel reviewing a risk assessment than
the threshold clarified by the Appellate Body in US/Canada – Continued Suspension , and such a
lower threshold would eliminate the need to asse ss the link between the scientific evidence and the
conclusions reached in a risk assessment.
69. New Zealand rejects Australia's contention that, where expert judgement was used to address
scientific uncertainty, the Panel could only consider whether this expert judgement was legitimate by
the standards of the scientific community. New Zealand asserts that the IRA did not face an
unprecedented level of scientific uncertainty, and argues that the standard proposed by Australia
would prevent a panel from assessing the relationship between scientific evidence and conclusions.
70. New Zealand disagrees with Australia's cont ention that the Panel failed to assess the
materiality of flaws it found in the intermediate st eps of the IRA or to consider whether such flaws
undermined the overall risk assessment. New Z ealand argues that the Panel did focus on the
materiality of the flaws it found in the interm ediate steps of the IRA and that it assessed the
cumulative effect of such flaws.
71. New Zealand asserts that, contrary to Australia's claims, the Panel did not discount the IRA's
use of expert judgement because it was not documente d and transparent. Rather, the Panel rejected
the concept that the mere recourse to expert judgement requires a panel to uphold the conclusions
reached through that expert judgement.

(a) Measures regarding Fire Blight
72. New Zealand characterizes as without merit Au stralia's contentions that, because the Panel
failed to assess the materiality of the purported flaws in the IRA, failed to consider whether the IRA's
conclusions were within a range that could be considered legitimate by the standards of the scientific
community, and misapplied the required standard of scientific sufficiency, the Panel misinterpreted
and misapplied Articles 5.1, 5.2, and 2.2 of the SPS Agreement in finding that Australia's measures
regarding fire blight are inconsistent with those provisions.
73. First, New Zealand disagrees that the Panel fa iled to assess the materiality of the faults it
found with the IRA because it failed to engage with significant testimony of Dr. Deckers that was
favourable to Australia. Dr. Deckers' views on th e probability of importation were consistent with
those of other experts and his statement that the IR A's prediction that the likelihood of importation of
apples infested with fire blight is 3.9 per cent was not exaggerated is taken out of context by
Australia. Read in context, it is clear that Dr . Deckers was commenting on the way in which the IRA
aggregated the importation steps and not on the overall figure of 3.9 per cent. In addition, the Panel
did not ignore Dr. Deckers' views on consequences, and Dr. Deckers' testimony that "[t]he limitation
of apples exports to mature symptomless apples is not enough to achieve Australia's ALOP" is an
issue to be dealt with under the Article 5.6 analys is and not under Article 5.1, as Australia suggests.
89
New Zealand adds that, in any event, this testimony was not favourable to Australia.
74. Second, New Zealand argues that Australia's proposed standard of "legitimate according to
the standards of the scientific community" should not be adopted because it is not based on the
Appellate Body's statements in US/Canada – Continued Suspension .90 New Zealand agrees that the
Panel was not required or permitte d to make its own risk assessment, but highlights how the Panel
correctly applied the required standard of objectivity and coherence of the reasoning in its analysis of
importation steps 1, 2, 3, 5, and 7, and of expos ure and spread, uniform distribution, establishment,
and consequences of fire blight.
75. Regarding importation step 1, New Zealand asserts that Australia has not established that the
Panel erred by failing to consider fully Dr. Pa ulin's testimony regarding the likelihood that Erwinia
amylovora is present in any source orchard in New Z ealand or by failing to assess the significance of
any overestimation under importation step 1 either to the overall probability of importation or to the
overall risk assessment, because the Panel fully co nsidered Dr. Paulin's relevant testimony and the
Panel noted the significance of any overestimation under importation step 1.

89New Zealand's appellee's submission, para. 2.95 (quoting Dr. Deckers' response to Panel Question 15,
90See, for instance, New Zealand's appellee's submission, para. 2.115.

76. New Zealand rejects Australia's criticisms of th e Panel's assessment of importation step 2,
including that the Panel erred by failing to adhe re to Appellate Body guidance that scientific
uncertainty or inconclusiveness does not excuse the risk assessor from evaluating the risk.
New Zealand argues that the Panel was cognizant of scientific uncertainty or inconclusiveness, but
that this does not excuse non-compliance with the SPS Agreement ; that the Panel used the word
"aggregated" simply to mean "collected together" and explained that the IRA did not indicate
transparently how the scientific data from a range of disparate studies were used under
importation step 2; that the Panel made findings that would satisfy the Australian-proposed test of
"within a range that could be considered legitima te according to the sta ndards of the scientific
community" (even though this test is itself flawed); and that the Panel considered the significance of
an overestimation under importation step 2.91
77. Regarding importation step 3, New Zealand contests Australia's claims that the Panel erred by
overlooking the practical necessity of making a risk assessment judgement even when there is limited
scientific evidence, by failing to assess whether Austra lia's estimates could be considered legitimate
by the scientific community, and by failing to assess the significance of any overestimation under
importation step 3. The Panel did not require Austra lia to make a specific kind of risk assessment.
Rather, in applying the requirement that the j udgements made by a risk assessor be objectively
justifiable, the Panel did not consider Australia's estimate to be sufficiently supported by scientific
evidence. New Zealand also argues that the Pa nel assessed the significance of an overestimation
under importation step 3.
78. In response to Australia's claims regarding importation step 5, that the Panel erred in failing to
ascertain whether importation step 5 could be consider ed legitimate according to the standards of the
scientific community and in failing to assess the significance of any overestimation under importation
step 5, New Zealand asserts that the Panel assessed the connection between the IRA's conclusions on
importation step 5 and the scientific evidence and c onsidered the materiality of any overestimation
under importation step 5.
79. Similarly, with respect to Australia's arguments on importation step 7, New Zealand contends
that the Panel assessed the connection between the IRA's conclusions on importation step 7 and the
scientific evidence
92 and considered the cumulative effect of importation step 7.
80. Regarding exposure and spread, New Zealand asserts that Australia mistakenly maintains that
the Panel failed to consider the possibility that a tr ansfer may occur despite a lack of direct scientific

91New Zealand's appellee's submission, paras. 2.113-2.116.
92New Zealand's appellee's submission, para. 2.131.

evidence on specific transfer mechanisms and made its finding on exposure without assessing the
range of estimates that the scientific commun ity would consider legitimate, while overlooking
Dr. Deckers' testimony. New Zealand argues that it was not established before the Panel that the
transfer itself could occur, that the Panel consider ed the relevant scientific evidence, and that the
Panel assessed Dr. Deckers' testimony on exposure.
81. New Zealand disputes Australia's claims that th e Panel erred by not questioning whether the
use of uniform distribution was within a legitimate range of available judgements and by not assessing
the significance of Dr. Schrader's testimony that uniform distribution may be useful. New Zealand
responds that the Panel enquired whether uniform distributions may be used and properly assessed
Dr. Schrader's testimony.
82. Regarding establishment, New Zealand disagrees with Australia's assertions that the Panel
failed to assess whether the IRA's estimate of the prob ability of establishment was within a range that
could be considered legitimate ac cording to the standards of the scientific community, and contends
that the Panel correctly assessed whether the IR A's conclusions found sufficient support in the
scientific evidence and were thus objective and coherent.
83. New Zealand rejects Australia's arguments that the Panel erred in its assessment of the
consequences of fire blight by not consideri ng economic evidence of actual production losses shown
to have been caused by prior outbreaks of fire bli ght and by ignoring Dr. Paulin's and Dr. Deckers'
views that the consequences could properly be assess ed as "high". In New Zealand's view, the Panel
did not fail to consider any relevant economic ev idence and did not overlook the relevant expert
testimony regarding the consequences of fire blight.
(b) Measures regarding ALCM
84. Regarding ALCM, New Zealand disagrees with Aust ralia's argument that the Panel failed to
assess whether the estimate of the probability of importation was within a legitimate range.
New Zealand responds that Australia's proposed standa rd of "within a range that could be considered
legitimate according to the standa rds of the scientific community" s hould not be adopted because it is
not based on the Appellate Body's guidance in US/Canada – Continued Suspension , that Australia
conflates the concepts of "infestati on rate" and "likelihood of importation"
93, and that the Panel
reasonably concluded that the IRA's reasoning was not objectively justifiable. 94 New Zealand
disputes Australia's contention that the Panel failed to assess the materiality of the perceived errors in

93New Zealand's appellee's submission, para. 2.186.
94New Zealand's appellee's submission, paras. 2.187-2.190.

the IRA, because the Panel was not required or pe rmitted to conduct its own risk assessment and the
Panel assessed the materiality of the perceived erro rs in the IRA. Moreover, New Zealand challenges
Australia's argument that the Panel erred in not assessing whether the overall judgement made by the
IRA was within a legitimate range, as evidenced by the Panel's failure to refer to Dr. Cross' testimony,
because Australia's proposed standard of "within a range that could be considered legitimate
according to the standards of the scientific commun ity" should not be adopte d and the Panel was not
required to refer to Dr. Cross' testimony.95
3. Article 11 of the DSU
85. New Zealand requests the Appellate Body to rej ect Australia's claim that the Panel failed to
make an objective assessment of the matter before it in accordance with Article 11 of the DSU.
Referring to the Appellate Body report in Brazil – Retreaded Tyres , New Zealand notes that a panel
enjoys discretion in assessing whether a given piece of evidence is relevant for its reasoning, and is
not required to discuss, in its report, each and every piece of evidence.96
(a) Treatment of Expert Testimony
86. New Zealand highlights the differences in circumstances between this case and US/Canada –
Continued Suspension . New Zealand points out that, in US/Canada – Continued Suspension , there
were justifiable doubts as to the independence or im partiality of the two e xperts on whom the panel
relied extensively, whereas the experts relied upon by the Panel in this dispute are clearly independent
and impartial. 97 New Zealand then turns to specific statem ents made by the experts that Australia
alleges the Panel overlooked.
87. First, New Zealand argues that Dr. Deckers' statement that the overall probability of
importation was "not an exaggerated situation" is not favourable to Australia and, further, that the
Panel did assess the significance of it. 98 New Zealand claims that this statement does not qualify
Dr. Deckers' earlier statement that the probability of importation "could be overestimated". 99
New Zealand also submits that the statement c oncerning the overall probability of importation does
not support Australia's position because Dr. Deck ers considered that the likelihoods assessed under

95New Zealand's appellee's submission, paras. 2.201 and 2.202.
96New Zealand's appellee's submission, para. 2.207 (quoting Appellate Body Report, Brazil –
Retreaded Tyres, para. 202).
97New Zealand's appellee's submission, para. 2.209.
98New Zealand's appellee's submission, paras. 2.217-2.222 (quoting Transcript of the Panel's meeting
with the scientific experts, Panel Report, Annex B-2, Dr. Deckers, para. 259).
99New Zealand's appellee's submission, para. 2.220 (referring to Australia's appellant's submission,
para. 137; and quoting Dr. Deckers' response to Panel Question 34, Panel Report, Annex B-1, para. 237).

importation steps 2, 3, and 5, which are aggregated as parts of the overall probability of importation,
are overestimated.
88. Second, New Zealand points out that, when sta ting that the IRA's estimation of exposure as
an interval of 0 to 10
-6 appeared to be correct, Dr. Deckers "was not making an informed comment on
the interval" 100, because he was not considering whether the likelihood at issue corresponds to an
event that almost certainly would not occur. Ne w Zealand also notes that Dr. Deckers admitted the
insufficiency of his expertise in examining the appropriateness of risk analysis methodologies.
89. Third, as to the IRA's assessment of conseque nces associated with fire blight, New Zealand
claims that the Panel made an objective assessm ent of the views of Dr. Deckers and those of
Dr. Paulin. The Panel chose to rely primarily on Dr. Paulin's views because they were more
comprehensive and detailed on this issue than tho se of Dr. Deckers. New Zealand also argues that
Dr. Deckers' response to Panel Question 11 and his testimony are of limited assistance in considering
whether the IRA's evaluation of th e potential consequences of entry, establishment and spread of fire
blight was coherent and objective.
90. Fourth, New Zealand argues that, in concluding that restricting the importation of apples to
mature, symptomless apples would meet Australia's appropriate level of protection, the Panel properly
engaged with the totality of the evidence and did no t, as Australia claims, dismiss without explanation
Dr. Deckers' testimony stating that such a limitation is not enough to achieve Australia's appropriate
level of protection.
91. Fifth, New Zealand claims that Dr. Schrader's general statement, that the use of uniform
distribution is useful when there is not sufficient information to determine the most likely value, could
not be applied to the IRA because this statemen t relied on the existence of a properly justified
maximum value, and the maximum va lue was not properly justified in the IRA. New Zealand also
argues that the Panel properly chose to rely prim arily on the responses of experts who had addressed
the IRA's use of uniform distribution in combination with the interval of 0 to 10-6.
92. Lastly, New Zealand contests Australia's argument that the Panel failed to make an objective
assessment of Dr. Cross' views relating to ALCM by failing to reproduce one aspect of his testimony
in its Report. Citing the Appellate Body report in EC – Hormones , New Zealand emphasizes that a

100New Zealand's appellee's submission, para. 2.224.

panel should be allowed a substantia l margin of discretion as to which statements are to be explicitly
referred to in its report.101
(b) The Panel's Alleged Misunderstanding of the IRA
93. New Zealand contests Australia's assertion that the Panel misunderstood the IRA's use of the
interval of 0 to 10 -6 and uniform distribution to represent neg ligible events. First, the Panel was
correct to consider the definitional correspondence be tween the term "negligible" and the interval and
distribution. Table 12 of the IRA sets out a seri es of likelihood labels, corresponding to quantitative
probability intervals, and defines "negligible" likelih ood as an event that "would almost certainly not
occur".102 Second, the Panel correctly understood what the interval and uniform distribution assigned
to "negligible" events represented. The Panel fo und that the "negligible" interval together with
uniform distribution were not appropriate for modelling events that almost certainly would not occur.
Lastly, the Panel was correct in concluding that the methodological flaws were serious enough to
constitute an independent basis for the IRA's invalid ity. New Zealand points out that the interval at
issue was assigned to over one third of all the interv als used in the IRA. New Zealand also notes that
Dr. Sgrillo and Dr. Latorre stated that there were fundamental problems with the IRA's treatment of
the "negligible" interval.
4. Article 5.6 of the SPS Agreement

94. New Zealand requests the Appellate Body to u phold the Panel's conclusion that Australia's
measures regarding fire blight and ALCM ar e inconsistent with Article 5.6 of the SPS Agreement .
New Zealand submits that the Panel was correct in finding that New Zealand had raised a
presumption that restricting imports of New Zealand apples to mature, symptomless apples was an
alternative measure with respect to fire blight that would meet Australia's appropriate level of
protection, and that New Zealand had made a prima facie case that the inspection of a 600-fruit
sample of each import lot would be an alternativ e measure with respect to ALCM that would meet
Australia's appropriate level of protection.
95. In response to Australia's argument that the Panel's findings under Article 5.6 should be
reversed consequentially upon a reversal of the Pane l's findings under Articles 5.1, 5.2, and 2.2 of the
SPS Agreement , New Zealand argues that, because the latter findings should not be reversed, the
conditions for a consequential reve rsal would not arise. In any event, New Zealand argues that
Australia is not correct in arguing that the Panel's findings under Article 5.6 are largely consequential

101New Zealand's appellee's submission, para. 2.252 (quoting Appellate Body Report, EC – Hormones,
para. 138).
102New Zealand's appellee's submission, para. 2.261.

on its findings under Articles 5.1, 5.2, and 2.2, because Australia overlooks that the Panel undertook a
second step in its analysis, assessing New Zealand's c ontention that, with respect to fire blight and
ALCM, mature, symptomless apples do not pose a risk exceeding Australia's appropriate level of
protection.
96. New Zealand contends that Australia's argument that the Panel, while correctly articulating
the burden of proof, actually applied a significantly lower burden of proof "does not withstand serious
analysis".
103 Although Australia asserts that the Panel relied "virtually entirely" 104 upon its finding
under Article 5.1 as to the IRA's exaggeration of risk , the Panel's findings under Article 5.1 were only
the beginning of its analysis and not something on which it relied "virtually entirely". The Panel
adopted a two-step approach, assessing under the first step whether Australia's calculation of the risk
resulting from the importation of New Zealand apples was exaggerated, and considering more directly
under the second step whether the alternative measu res proposed by New Zealand would reduce the
risk to or below Australia's appropriate level of protection. New Zealand argues that Australia is
incorrect in asserting that under the second step the Panel merely reviewed the perceived inadequacy
of the scientific basis for intermediate esti mates in the IRA. Instead, the Panel assessed
New Zealand's contention that mature, symptomless a pples do not pose a risk of transmission of fire
blight or ALCM that exceeds Australia's appropriate level of protection. The Panel did more than rely
on its findings under Article 5.1: it looked at th e arguments made by New Zealand and the views of
the experts. New Zealand highlights, in this regard , that it was particularly appropriate for the Panel
to consider the scientific eviden ce in the IRA and test New Zealand's claim with the assistance of the
experts, because Australia relied exclusively on the validity of the IRA to defend New Zealand's claim
under Article 5.6. Having done so, Australia cannot now claim that the Panel erred in having regard
to the evidence in the IRA as part of its Article 5. 6 analysis. Thus, New Zealand maintains that there
was no "shifting"105 of the burden of proof.
97. New Zealand also objects to Australia's allegati on that the Panel, throughout its consideration
of New Zealand's claim under Artic le 5.6, failed to consider potential biological and economic
consequences, and instead focused so lely on the likelihood of entry, establishment and spread of the
pests. The Panel observed that it had al ready assessed potential biological and economic
consequences in the context of its analysis under Ar ticle 5.1, and referred back to these findings in its
analysis under Article 5.6, namely, in the context of fire blight at paragraph 7.1152, and in the context

103New Zealand's appellee's submission, para. 2.290.
104New Zealand's appellee's submission, para. 2.288 (quoting Australia's appellant's submission,
para. 171).
105New Zealand's appellee's submission, para. 2.300 (quoting Australia's appellant's submission,
para. 173).

of ALCM at paragraph 7.1307 of its Report. 106 In addition, the Panel accepted that New Zealand had
raised a presumption that there is no scientific evidence that mature, symptomless apples can provide
a pathway for the transmission of fire blight, and that the conditions for the entry, establishment and
spread of ALCM will "likely 'almost never occur'" even with the "'worst case' infestation level". 107 In
the light of these findings, along with its earlier find ing that the IRA's assessment of consequences
was not objectively justifiable, the Panel was not required to consider consequences any further in this
part of its analysis.
98. With respect to Australia's argument that the Panel failed to assess whether a proper risk
assessment would necessarily have concluded that th e alternative measure would achieve Australia's
appropriate level of protection, New Zealand argue s that this would constitute an impermissible
de novo assessment of the risk. Australia is requiring a degree of scientific certainty that can come
only from performing a risk assessment. New Zeala nd maintains that the Panel could not make the
assessment proposed by Australia without perform ing an actual risk assessment. New Zealand
reiterates that Australia's arguments ignore what the Panel found New Zealand to have demonstrated
regarding the likelihood of entry, establishment and spread of fire blight and ALCM, and observes
that it is difficult to understand what more the Panel could have done without conducting a de novo
review.
C. Claims of Error by New Zealand – Other Appellant
1. Annex C(1)(a) and Article 8 of the SPS Agreement
99. New Zealand requests the Appellate Body to re verse the Panel's finding that its claim under
Annex C(1)(a), and its consequen tial claim under Article 8 of the SPS Agreement , fell outside the
Panel's terms of reference. New Zealand alleges th at the Panel erred in finding that New Zealand had
not properly identified the measure at issue in th e context of its claims under Annex C(1)(a) and
Article 8, and that New Zealand had to challenge the completed "IRA process" as a measure separate
from the measures specified in th e IRA. New Zealand further requests the Appellate Body to
complete the analysis of its claim of undue delay.
100. New Zealand contends that the Panel comm itted three main errors relating to the
interpretation of Annex C(1)(a) to the SPS Agreement and Article 6.2 of the DSU, namely: (i) the
Panel proceeded on the erroneous assumption that the measure at issue must directly cause the
violation of obligations; (ii) the Panel blurred th e distinction between measures at issue and claims;
and (iii) by insisting that the IRA process, alt hough expired, was the only measure that could be

106New Zealand's appellee's submission, paras. 2.304 and 2.305.

challenged, the Panel ignored the fact that it is th e measures challenged by New Zealand that continue
to impair benefits.
101. New Zealand maintains that there is no requirement that the measure at issue must directly
cause the violation of an obligation, and refers to Article 5.1 of the SPS Agreement, Article X:1 of the
General Agreement on Tariffs and Trade 1994 (the "GATT 1994"), and provisions of the Agreement
on Safeguards in support of this proposition. Thus, under Article 5.1 of the SPS Agreement, it is not
the measure at issue that causes th e breach, but rather the lack of an objectively justifiable risk
assessment. New Zealand adds that the Appellate Body report in EC – Selected Customs Matters is
consistent with this proposition. In that case, the Appellate Body sought to ensure that "measures at
issue" were not limited by the obligation being cha llenged, and the Appellate Body stated that "a
complainant is entitled to include in its panel requ est an allegation of inc onsistency with a covered
agreement of any measure that may be submitted to WTO dispute settlement."
108
102. New Zealand contends that the Panel erred in finding that the measure at issue must
necessarily be the "procedure" referred to in the chapeau of Annex C(1) to the SPS Agreement. In
doing so, the Panel improperly limited the measures at issue by reference to the specific obligation
being challenged, thereby blurring the distinction between claims and measures under Article 6.2 of
the DSU. In contrast, the Appellate Body in EC – Selected Customs Matters held that the "manner of
administration" relevant for purposes of Article X:3 of the GATT 1994 need not necessarily be
identified as the measure at issue. By analog y, the reference to "approval procedures" in
Annex C(1)(a) does not mean that such "approval pr ocedures" must be identified as the measures at
issue.
109 New Zealand further observes that the Panel's finding is at odds with the finding of the panel
in EC – Approval and Marketing of Biotech Products , where the measure at issue was the de facto
moratorium, rather than the "procedures" referred to in the chapeau of Annex C(1).110
103. New Zealand takes issue with the Panel's findi ng that the IRA process, although expired, was
the only measure that could be challenged, because it continues to impair benefits. It is the SPS
measures resulting from the approval process, rather than the approval process itself, that give rise to
the continuing impairment of benefits, and that is why New Zealand made those measures the subject
of its challenge. The SPS measures are inextricab ly linked to the process by which they were
developed and they can therefor e be challenged under Annex C(1)(a). Where SPS measures have
been developed and adopted in the context of an unduly delayed approval process, such measures can

108New Zealand's other appellant's submission, para. 12 (quoting Appellate Body Report, EC – Selected
Customs Matters, para. 133).
109New Zealand's other appellant's submission, para. 17.
110New Zealand's other appellant's submission, para. 18 (referring to Panel Report, EC – Approval and
Marketing of Biotech Products, paras. 7.1491 and 7.1492).

be the basis of a challenge of that undue delay. There may be other ways to raise a claim of undue
delay, for example, by challenging, in connection with an ongoing process, the approval process itself,
or the acts or omissions leading to delays in approval, as the measures at issue. Similarly, as the Panel
itself recognized, it may be possible to characterize the substantive SPS measures that are developed
as part of an approval process, and the approval process itself, as separate SPS measures.
111 However,
in New Zealand's view, it does not follow from this that only the approval process can be challenged
under Annex C(1)(a), even when it has expired.
104. New Zealand requests the Appellate Body to co mplete the legal analysis with regard to
New Zealand's claim of undue delay. Ne w Zealand explains that the panel in EC – Approval and
Marketing of Biotech Products found that a delay is "undue" if the time taken to complete an approval
procedure exceeds the time that is reasonably needed to check and ensure the fulfilment of its relevant
SPS requirements. 112 New Zealand asserts that in the present dispute the key factual matters
establishing that the time taken to complete the IRA exceeded that which was reasonably needed are
uncontested, namely: (i) the eight-year period to co mplete the IRA; (ii) letters from Australia's
quarantine service at the outset of the IRA process indicating that the risk assessment would be
"routine" and would take approximately 12 months to complete because it was "technically less
complex" than previous processes; (iii) the recognition, in an Aust ralian government-mandated
review of Australia's quarantine system, that the de lay was "difficult to justify"; and (iv) the absence
of explanation or justification of the delay by Australia.113
D. Arguments of Australia – Appellee
1. Annex C(1)(a) and Article 8 of the SPS Agreement
105. Australia requests the Appellate Body to dismiss New Zealand's other appeal and uphold the
Panel's finding that New Zealand's claims under Annex C(1)(a) and Article 8 of the SPS Agreement
were outside the Panel's terms of reference. Ac cording to Australia, the Panel correctly required
New Zealand to identify in its panel request the "p rocedure" alleged to be inconsistent with the
obligation under Annex C(1)(a).
106. In response to New Zealand's argument that the Panel erroneously assumed that the measure
at issue must directly cause the violation of obliga tions, Australia asserts that New Zealand "seeks to
contrive a distinction between the object of a claime d violation and a measure at issue, when they are

111New Zealand's other appellant's submission, para. 25 (referring to Panel Report, para. 7.1463).
112New Zealand's other appellant's submission, para. 28 (quoting Panel Report, EC – Approval and
113New Zealand's other appellant's submission, para. 28.

the same thing."
114 Australia further argues that the Panel did not blur the distinction between the
measures at issue and the claim because it did not inte rpret the term "measures at issue" in Article 6.2
of the DSU in the light of the specific obligation. Rather, the Panel simply found that the object of
New Zealand's claim was absent from its panel re quest. The Panel also did not, as New Zealand
asserts, find that the only measure that could be challenged in the circumstances of this dispute was
the expired IRA process. Instead, asserts Australia, the Panel's conclusion concerned simply the way
in which New Zealand articulated its claims in this dispute.
107. Australia points to the various ways in which New Zealand formulated and reformulated its
Annex C(1)(a) and Article 8 claims throughout these proceedings. Australia emphasizes that,
throughout these various formulations, the object of New Zealand's claim was the IRA process, or the
development of the 17 specified measures, and that New Zealand never claimed that the 17 measures
themselves violated Annex C(1)(a) and Article 8. The Panel correctly understood this, and also
correctly recognized that the development of the 17 measures was conceptually distinct from the
measures themselves. The measures at issue were, as established in the Panel's preliminary ruling,
limited to the 17 measures identified in the panel re quest, and the Panel correc tly found that neither
the development of the 17 measures, nor "the IRA process", were captured by the mere identification
of the 17 measures in the panel request. Although New Zealand cites the A ppellate Body report in
EC – Selected Customs Matters for the proposition that a complainant is entitled to challenge any
measure, this ruling does not speak to the more fundamental requirement that New Zealand has
consistently overlooked, namely, that the alle gation of inconsistency in respect of the relevant
measure must be set out in the panel request. Australia emphasizes that it is not sufficient for the
relevant measure to be identified in subseque nt submissions, because a complainant cannot be
permitted to "cure" defects in its panel request by identifying in its subsequent submissions the
measure it sought to challenge.115
108. Australia submits that in any event New Zeala nd's claim is based on a misinterpretation of
Annex C(1)(a). Although New Zealand seems to re gard Annex C(1)(a) as a provision containing an
obligation to develop SPS measures without undue delay, the ordinary meaning of a procedure "to
check and ensure the fulfilment" of SPS measures refe rred to in the chapeau of Annex C(1) cannot be
the equivalent of a procedure that "develops" SPS measures. 116 The measures at issue were adopted
following and as a result of the IRA process, and, th erefore, the IRA process cannot be considered as
a process intended to check or ensure the fulfilmen t of the 17 measures within the scope of the

115Australia's appellee's submission, para. 14 (quoting Appellate Body Report, US – Carbon Steel ,
para. 127).

chapeau of Annex C(1). In addition, before th e Panel, New Zealand submitted that the SPS measure
to which the chapeau of Annex C(1) refers is Australia's regime relating to the import approval of
fresh fruit or vegetables.117 According to Australia, this concessi on makes it all the more explicit that
the 17 measures within the Panel's terms of refere nce corresponded to neither the "procedure" nor the
"[SPS] measures" referred to in the chapeau of Annex C(1).118
109. Finally, Australia submits that the Appellate B ody should not complete the legal analysis of
New Zealand's claims under Annex C(1)(a) and Article 8 because at least two of the "key factual
matters" relied upon by New Zealand, namely, the absence of justification for the delay and the
statements in the domestic review of Australia's quarantine system, have been contested by Australia
in the course of the Panel proceedings.119
E. Arguments of the Third Participants
1. European Union
110. The European Union disagrees with Australia's conception of an SPS measure, contending
instead that, to the extent that an act or an omission attributable to a WTO Member is applied in order
to pursue one of the aims listed in Annex A(1)(a ) to (d), the WTO adjudicating bodies can consider
that act or omission a "measure" within the meaning of Annex A(1) to the SPS Agreement and, thus,
examine its conformity with the provisions of the SPS Agreement. The Appellate Body has adopted a
broad notion of the term "measure" under the DSU, and there is no reason to interpret the term
differently in the chapeau of Annex A(1) to the SPS Agreement.120 Neither Annex A(1) nor any other
provision of the SPS Agreement distinguishes between "ancillary" and "principal" measures. WTO
Members frequently adopt a number of different me asures that can only attain their objective when
they operate together. Thus, an assessment of a given measure cannot always be done in "clinical
isolation"121, but may require an adjudicator to consider the interaction among a number of different
measures. This, however, does not mean that each act or omission of the State that meets the relevant
conditions cannot be identified as a discrete "mea sure" for the purpose of WTO dispute settlement.
The European Union adds that it is up to the compla ining Member, in the first instance, to identify the
"measure at issue". The complaining Member ha s some, albeit not unfettered, discretion in this
respect, and must also accept the consequences that flow from its identification of the measure at

117Australia's appellee's submission, para. 19 (quoting New Zealand's response to Panel Question 146
after the first Panel meeting, para. 301).
120European Union's third participant's submission, paras. 3-6 (referring to Appellate Body Report,
US – Corrosion-Resistant Steel Sunset Review, paras. 81-89).
121European Union's third participant's submission, para. 9.

issue. In any event, the European Union observes, sometimes the question of whether one construes a
single measure or several distinct measures will be of no significance, as appears to be the case in this
dispute.
111. With respect to Australia's claims of error under Articles 5.1, 5.2, and 2.2 of the SPS
Agreement, the European Union submits that the panel's role in reviewing a risk assessment
conducted by a WTO Member has been correctly iden tified and explained by the Appellate Body in
previous disputes, in particular in US/Canada – Continued Suspension . It is not the panel's role to
determine whether a risk assessment is correct or not. In addition, as stated by the Appellate Body in
US/Canada – Continued Suspension , the risk assessment cannot be entirely isolated from, and its
scope or method may be affected by, the appropr iate level of protection chosen by a Member.
122 The
fact that there may be some minor flaws, misconceptions, or subjective elements in a risk assessment
does not, in itself, suffice to disqualify th e risk assessment under Article 5.1 of the SPS Agreement.
Thus, observes the European Union, the onus of proof placed on a complaining party is high.
112. The European Union expresses the view, in connection with Australia's claim under
Article 11 of the DSU, that experts' opinions shou ld be confined to assessing the scientific evidence
submitted by the parties. Neither the panel nor the experts may engage in de novo review of the
evidence, conduct their own risk assessments, or consid er or opine on the science in a manner that is
completely detached from the appropriate level of protection. Without taking a position as to whether
Australia has met the high burden of establishing that the Panel acted inconsistently with Article 11 of
the DSU in this dispute, the Eur opean Union notes that, in a numb er of passages of its Report, the
Panel seems to have been rather selective in repor ting the experts' opinions, ignoring or dismissing
without any (or much) explanation testimony that did not support its findings.
113. Regarding Australia's claim under Article 5.6 of the SPS Agreement , the European Union
agrees with Australia that, in principle, a findi ng of violation of Article 5.6 cannot be merely
consequential on a finding of viola tion of Articles 5.1 and 2.2 of the SPS Agreement . Articles 5.1
and 5.6 of the SPS Agreement contain distinct and independent obligations. Measures that are
properly based on a risk assessment as required by Ar ticles 5.1 and 2.2 may still breach Article 5.6.
Conversely, the fact that a risk assessment may not be in compliance with Articles 5.1 and 2.2 does
not exclude that the SPS measures adopted are consistent with Article 5.6. The European Union takes
no position on whether the Panel's findings were me rely consequential on its finding of a breach of
Articles 5.1 and 2.2, but submits that, should the Appellate Body conclude that they were, then
Australia's claims of error would be well founded.

122European Union's third participant's submission, para. 20 (quoting Appellate Body Reports,

114. Regarding New Zealand's other appeal, the Eur opean Union submits that a process leading to
the adoption of a risk assessment that forms the basis of one or more SPS measures may, under certain
circumstances, constitute, in itself and independent ly from those measures, an SPS measure. In the
present dispute, the European Union "wonders" 123 whether the undue delay claim by New Zealand
relates to the adoption of the measures at issue, ra ther than to an alleged "IRA process". If so, it
seems rather artificial to refer to the "IRA process" as a separate and distinct measure. The
European Union also points out that New Zealand' s panel request asserts that the 17 measures, both
individually and as a whole , are inconsistent with the relevant obligations. Challenging the alleged
undue delay of the "IRA process" appears, therefore, to be tantamount to contesting the undue delay
with respect to the 17 measures as a whole. The European Union adds that the fact that
the 17 measures are imposed and regulated by the IR A means that the alleged delay in undertaking
and completing approval inevitably and automatical ly affected the 17 measures duly identified by
New Zealand in its panel request.
2. Japan
115. With respect to the issue of whether the Panel erred in finding that the 16 measures
challenged by New Zealand indivi dually constitute SPS measures, Jap an disagrees with Australia's
argument that "an administrative or procedural require ment that is necessary, even 'indispensable', to
achieve ALOP, but not sufficient to do so, cannot without more amount in itself to an SPS
measure."124 Japan highlights that Annex A(1) to the SPS Agreement refers to " any measure" and to
"all relevant laws, decrees, regula tions, requirements and procedures" 125, thus suggesting a broad
range of measures are covered. Japan further point s to Annex A(1)'s reference to "provisions on
relevant statistical methods, sampling procedures a nd methods of risk assessment", arguing that such
measures could be "ancillary", yet they are expressl y included in the definition of an SPS measure.
Japan cautions that accepting Australia's reasoning would substantially undermine the disciplines of
the SPS Agreement and that Members must not be allowed to circumvent their obligations by putting
in place trade-restrictive, SPS-type measures that are merely "ancillary" or "administrative".
116. Japan agrees with Australia that the Panel e rred in finding that Biosecurity Australia, the
Australian entity issuing the IRA, acted inconsistent ly with Article 5.1 by failing to document and to
make transparent its use of expert judgement. Japan argues that the SPS Agreement does not contain a
requirement for documentation and transparency in a risk assessment. Japan therefore suggests that
the Appellate Body should "clarify" that the Pane l's documentation and transparency "test" has no

123European Union's third participant's submission, para. 37.
124Japan's third participant's submission, para. 18 (quoting Australia's appellant's submission, para. 64).
125Japan's third participant's submission, para. 19. (original emphasis)

basis in the text or context of Article 5.1 and is thus not relevant fo r purposes of determining
consistency with Article 5.1.
126
117. With respect to Australia's allegation that the Panel erred in finding Australia's measures to be
inconsistent with Article 5.6 as a consequence of be ing inconsistent with Articles 5.1 and 5.2, Japan
does not take a position on whether the Panel in fact made such a consequential finding. If, however,
the Appellate Body were to find that the Panel's finding of inconsistency with Article 5.6 rested on
such a "consequential determination", then Japan considers that this finding was in error. 127 Japan
emphasizes that Article 5.6 sets out an obligation that is distinct from the obligations in Articles 5.1
and 5.2, and does not, in its text, refer to a ri sk assessment. An SPS measure may be based on a
proper risk assessment, in accordance with Articles 5.1 and 5.2. If, however, this measure is more
trade restrictive than necessary, this would constitute a stand-alone violation of Article 5.6. Likewise,
according to Japan, an SPS measure might not be based on a proper risk assessment, in violation of
Articles 5.1 and/or 5.2. Yet it could still be consistent with Article 5. 6 if it were determined to be the
least trade-restrictive measure to achieve the Member's appropriate level of protection.
118. Japan takes issue with the Panel' s approach to the analysis under Article 5.6. Rather than
assessing, as an initial matter, whether New Zealand ha d demonstrated that Australia's calculation of
the risk resulting from the importation of New Zealan d apples was exaggerated, the Panel could have
analyzed New Zealand's alternativ e measure specifically and directly. Furthermore, the Panel's
finding that "there is no reason to believe that the alternative measure suggested by New Zealand
would not meet Australia's ALOP" is a "leap of logi c" that cannot be considered equivalent to an
affirmative showing by New Zealand that its less trade-restrictive alternative measure in fact
"achieves" Australia's appropriate level of protection. 128 Thus, to the extent that the Panel relied on
"doubt" as to whether the risk exceeds Australia's appropriate level of protection instead of an
affirmative determination that the alternative measu res would meet Australia's appropriate level of
protection, Japan believes that the Panel erred in its analysis under Article 5.6.
119. Japan disagrees that New Zeala nd's claims under Annex C(1)(a) and Article 8 were outside
the Panel's terms of reference. Rather, New Zealan d identified all the measures at issue in its panel
request and, by listing Annex C(1)(a), New Zealand clearly presented its concern. Accordingly, the
question of whether the 17 measures at issue are in consistent with Annex C(1)(a) and Article 8 was
properly within the Panel's terms of reference, and the Panel simply needed to interpret Annex C(1)(a)
and Article 8 and determine wh ether New Zealand had made a prima facie case of inconsistency.

126Japan's third participant's submission, para. 25.
127Japan's third participant's submission, para. 8.

Japan stresses that the question of whether a complainant has made its prima facie case should not be
confused with the question of whether a procedural violation has occurred pursuant to Article 6.2 of
the DSU, and cautions that, while due process concerns are important, it is even more important to
encourage Members positively to resolve disputes rather than to engage in procedural arguments.129
3. United States
120. The United States disagrees with Australia's conception of an SPS measure, which the
United States considers to be "completely divorced from the text of Annex A(1)" to the SPS
Agreement.130 The Panel determined that the legisla tive basis for each of the 16 measures, the
procedures under which they were adopted, and the IRA, all had "general objectives" that correspond
to those set out in Annex A(1)(a).131 The Panel also looked at the 16 measures individually and found
that each had a "close linkage" to the objective of controlling risks that correspond to the risks set
forth in Annex A(1).132 The Panel further analyzed the form and nature of the measures at issue and
found that they fit within the definition in Annex A(1). The United States notes that, in any event,
this issue "seems to be of minimal importance for purposes of this dispute".133
121. The United States submits that the Appellate Body should not adopt the approach to an
assessment of a measure's conformity with Article 5.1 suggested by Australia. Such an approach—if
adopted—would be inconsistent with findings in prior disputes, would undermine the requirement in
Article 5.1 that SPS measures be based on a risk assessment, and would severely weaken a panel's
ability to review the sufficiency of a risk assessment. Au stralia's argument that it is not within the
panel's authority to review the quality of the reasoning contained in the IRA per se , but only the
quality of the particular conclusions drawn, is inconsistent with the approach adopted by the Appellate
Body in prior disputes and should not be accepted. Referring to the Appellate Body reports in
Japan – Apples and US/Canada – Continued Suspension , the United States points out that the
Appellate Body has explained that panels are to "assess whether the reasoning articulated on the basis
of the scientific evidence is objective and coherent". 134 The United States further disagrees with
Australia's argument that the Panel was not perm itted to review anything but the IRA's ultimate
conclusions. A panel's failure to conduct a full examination of a challenged risk assessment,
including all intermediate steps leading to the u ltimate conclusion of the assessment, would constitute

129Japan addressed New Zealand's other appeal in its opening remarks at the oral hearing in this appeal.
130United States' third participant's submission, para. 3.
131United States' third participant's submission, para. 5 (referring to Panel Report, paras. 7.123-7.141).
132United States' third participant's submission, pa ra. 5 (referring to Panel Report, paras. 7.140
and 7.141).
133United States' third participant's submission, para. 6.
134United States' third participant's submission, paras. 14 and 15 (referring to Appellate Body Report,
Japan – Apples , paras. 201, 203, and 205; and Appellate Body Reports, US/Canada – Continued Suspension ,
para. 591). (original emphasis)

"deliberate disregard" for the evidence and be "inc ompatible with a panel's duty to make an objective
assessment of the facts".
135 As the facts of this dispute illustrate, when the overall probability is the
result of a sequence of events, each step must be evaluated in order to make an "objective
assessment", and it would be very difficult, if not impossible, for a panel properly to evaluate the
ultimate conclusion without any examination of whether the intermediate steps are supported by
science.
122. The United States disagrees with Australia that th e Panel acted inconsistently with Article 11
of the DSU by disregarding expert testimony that was favourable to Australia's case. The
United States maintains that Australia's Article 11 cl aim is based on the theory that a panel fails to
make an objective assessment when the panel repor t does not include a discussion of every piece of
evidence that may not be supportive of the panel' s ultimate findings, or when the report does not
describe in each instance why the pa nel placed more weight on some pieces of evidence. In the
appeal in Brazil – Retreaded Tyres , the European Union argued that the panel had ignored relevant
studies submitted by the European Union, and claimed that this was inconsistent with Article 11. Yet,
maintains the United States, the Appellate Body did no t require the panel to reproduce or directly cite
these studies and considered that it was sufficient that the panel had cited in a footnote paragraphs of
the European Union's oral statement and answers to questions that referred to these studies.
136
123. The United States also disagrees with Australia's claim that the Panel incorrectly applied the
burden of proof in its analysis under Article 5.6. The United States submits that Australia's argument
ignores the second step of the Panel's analysis, in which the Panel undertook a careful review of the
evidence before it in order to assess "more directly " whether New Zealand had raised a presumption
that its proposed alternative measures meet Aust ralia's appropriate level of protection. The
United States disagrees with Australia that the Panel misapplied Article 5.6 and found that
New Zealand had discharged this burden merely by id entifying an alternative measure that "could" or
"might" achieve Australia's appropriate level of protection. New Zealand's burden was to present
sufficient evidence to raise a presumption of inco nsistency, not to adduce evidence to establish
beyond a shadow of a doubt that its argument was the correct one, as Australia seems to contend. The
United States adds that the Panel Report shows that New Zealand adduced evidence sufficient to
discharge this burden. Accordingly, for the Un ited States, the Panel properly found that the
alternative measure meets Australia's appropriate le vel of protection, just as the compliance panel in

135United States' third participant's submission, pa ra. 18 (referring to Appellate Body Report, EC –
Hormones, para. 133).
136United States' third participant's submission, para. 26 (referring to Appellate Body Report, Brazil –
Retreaded Tyres, para. 190).

the Japan – Apples dispute found that limiting imports to mature, symptomless apples met Japan's
arguably more stringent appropriate level of protection.
III. Issues Raised in This Appeal
124. The following issues are raised in this appeal:
(a) Whether the Panel erred in finding that the 16 measures at issue, both as a whole and
individually, constitute SPS measures within the meaning of Annex A(1) to the SPS
Agreement;
(b) Whether, in finding that the measures regarding fire blight and apple leafcurling
midge ("ALCM"), as well as the "general" measures relating to these pests, are
inconsistent with Articles 5.1, 5. 2, and, consequently, 2.2 of the SPS Agreement, the
Panel misinterpreted and misapplied these provisions, and more specifically:
(i) whether, in evaluating Australia's risk assessment and the consistency
of Australia's SPS measures with th ese provisions, the Panel applied
an improper standard of review;
(ii) whether, in reviewing Australia's risk assessment and its use of
expert judgement at several intermediate steps, the Panel required too
high a standard of transparency and documentation and, thereby,
erred in its assessment of the objectivity and coherence of the
reasoning of the risk assessor; and
(iii) whether the Panel erred in failing to assess the materiality of the
faults it found with Australia's ri sk assessment, and in failing to
determine whether any alleged flaws were so serious as to call into
question the risk assessment as a whole;
(c) Whether the Panel failed to conduct an obj ective assessment of the matter before it
within the meaning of Article 11 of the DSU, and in particular:
(i) whether the Panel failed to engage with or disregarded testimony of
its appointed experts that was favourable to Australia; and
(ii) whether the Panel misunderstood the methodology employed in
Australia's risk assessment;

(d) Whether the Panel erred in finding that the measures regarding fire blight and ALCM
are inconsistent with Article 5.6 of the SPS Agreement, and more specifically:
(i) whether the Panel inappropriate ly relied on its findings under
Articles 5.1, 5.2, and 2.2 of the SPS Agreement in concluding that
New Zealand's proposed alternative measures would achieve
Australia's appropriate level of protection;
(ii) whether the Panel failed to require New Zealand to establish
affirmatively the inconsistency of the measures at issue with
Article 5.6 of the SPS Agreement because it determined only that the
alternative measures "might" or "may" achieve Australia's
appropriate level of protection; and
(iii) whether the Panel erred in interpretin g the term "appropriate level of
sanitary or phytosanitary protection", defined in Annex A(5) to the
SPS Agreement , by focusing solely on the likelihood of entry,
establishment and spread of the relevant pests without also
considering the associated potential biological and economic
consequences; and
(e) Whether the Panel erred in finding that New Zealand's claims under Annex C(1)(a)
and Article 8 of the SPS Agreement are outside the Panel's terms of reference, and, if
so, whether the Appellate Body can comple te the legal analysis and find that
Australia's measures at issue are incons istent with the "without undue delay"
obligation in Annex C(1)(a) and Article 8 of the SPS Agreement.
IV. The Measures at Issue and the Risk Assessment on which They were Based
A. The Measures at Issue
125. The following 17 measures relating to the im portation of New Zealand apples into Australia
were initially identified by New Zealand as the measures at issue in this dispute
137:
 Measures 1-8 relate to fire blight

Measure 1: The requirement that apples be sourced from areas free from fire blight
disease symptoms.

137Panel Report, para. 2.91; Request for the Establishment of a Panel by New Zealand, WT/DS367/5.

Measure 2: The requirement that orchards/blocks be inspected for fire blight disease
symptoms, including that they be inspect ed at an intensity that would, at a
95 per cent confidence level, detect visual symptoms if shown by 1 per cent
of the trees, and that such inspections take place between 4 to 7 weeks after
flowering.
Measure 3: The requirement that an orchard/bloc k inspection methodology be developed
and approved that addresses issues such as the visibility of symptoms in the
tops of trees, the inspection time needed and the number of trees to be
inspected to meet the efficacy level, and the training and certification of
inspectors.
Measure 4: The requirement that an orchard/bloc k be suspended for the season on the
basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of fire
blight.
Measure 5: The requirement that an orchard/bloc k be suspended for the season on the
basis of detection of any visual symptoms of fire blight.
Measure 6: The requirement that apples be subject to disinfection treatment in the
packing house.
Measure 7: The requirement that all grading and packing equipment that comes in direct
contact with apples be cleaned and disinfected (using an approved
disinfectant) immediately before each Australian packing run.
Measure 8: The requirement that packing houses regi stered for export of apples process
only fruit sourced from registered orchards.
 Measures 9-13 relate to European canker

Measure 9: The requirement that apples be sourced from export orchards/blocks free of
European canker (pest free places of production).
Measure 10: The requirement that all trees in expor t orchards/blocks be inspected for
symptoms of European canker, includi ng that orchards/blocks in areas less
conducive to disease be inspected for symptoms by walking down every row
and visually examining all trees on both sides of each row, and that areas
more conducive to the disease are in spected using the same procedure
combined with inspection of the upper limbs of each tree using ladders (if
needed), and that such inspections take place after leaf fall and before winter
pruning.
Measure 11: The requirement that all new planting stock be intensively examined and
treated for European canker.
Measure 12
138: The requirement that an orchard/bloc k be suspended for the season on the
basis that any evidence of pruning or other activities carried out before the
inspection could constitute an attempt to remove or hide symptoms of
European canker.

138As explained in the next paragraph of this Report, this measure is no longer at issue.

Measure 13: The requirement that exports from an orchard/block be suspended for the
season on the basis of detection of European canker, with reinstatement only
upon eradication of the disease, confirmed by inspection.
 Measure 14 relates to ALCM

Measure 14: The requirements of inspection and treatment for ALCM, including the
options of:
− inspection of each lot on the basis of a 3000-unit sample selected at
random across the whole lot for ALCM, symptoms of quarantineable
diseases, quarantineable pests, arth ropods, trash and weed seeds, with
detection of any live quarantineable arthropod resulting in appropriate
treatment or rejection for export; or
− inspection of each lot on the basis of a 600-unit sample selected at
random across the whole lot for symptoms of quarantineable diseases,
trash and weed seeds, as well as manda tory appropriate treatment of all
lots.
 Measures 15-17 were described by New Zealand as "general" measures

Measure 15: The requirement that Australian Quar antine and Inspection Service officers
be involved in orchard inspections for European canker and fire blight, in
direct verification of packing house procedures, and in fruit inspection and
treatment.
Measure 16: The requirement that New Zealand ensure that all orchards registered for
export to Australia operate under standard commercial practices.
Measure 17: The requirement that packing houses provide details of the layout of
premises.
126. Following an agreement between the parties on Measure 12, New Zealand did not pursue its
claims in respect of this measure, and the Panel did not rule on them.
139
127. On appeal, Australia challenges the Panel's findi ngs on the measures relating to fire blight
(Measures 1-8) and ALCM (Measure 14), as well as the general measures (Measures 15-17) to the
extent that they apply to these two pests. Au stralia does not appeal the Panel's findings on the
measures relating to European canker, or the gene ral measures (Measures 15-17) to the extent that
they apply to European canker.
140 New Zealand's other appeal rela ting to its "without undue delay"
claims concerns all of the 16 measures.141

139Panel Report, paras. 1.20 and 2.96.
140Notification of an Appeal by Australia, WT/DS367/13 and Corr.1 (attached as Annex I(a) and (b) to
this Report).
141Notification of an Other Appeal by New Zealand, WT/DS367/14 (a ttached as Annex II to this
Report).

128. As explained in further detail below, the 16 measures at issue are conditions for the
importation of apples from New Zealand that have been imposed by Australia following completion
of an import risk analysis.
B. Background to the Adoption of the Measures at Issue
129. Australia banned the importation of New Zeal and apples in 1921 following the entry and
establishment of fire blight142 in Auckland in 1919.143 New Zealand applied unsuccessfully for access
to the Australian apple market in 1986, 1989, and 1995. 144 New Zealand submitted a fourth request
for access in January 1999, which led to the initiation, in February 1999, of an import risk analysis by
the Australian Quarantine and Inspection Service ("AQIS"). 145 Following the issuance of draft risk
assessments in 2000, 2004, and 2005 (as well as cert ain other developments, including the launch of
two Senate inquiries and the restructuring of the government agencies involved 146), in
November 2006, Biosecurity Australia issued its Final Import Risk Analysis Report for Apples from
New Zealand (the "IRA").147 The 16 measures at issue in this dispute are among the risk management
measures recommended in the IRA.148
130. Under Australia's current regulatory regime, the importation into Australia of fresh fruit is
prohibited unless the Director of Animal and Plant Quarantine149 has granted an import permit.150 The
Director is empowered to grant an import perm it based on, among other things, the information and
policy recommendations in an import risk analysis. 151 In March 2007, Australia's Director of Animal
and Plant Quarantine determined that the importa tion of apples from New Zealand can be permitted
subject to, inter alia , the application of the phytosanitary measures specified in the IRA. 152 T h e

142A brief explanation of fire blight is provided infra, para. 134 of this Report.
143Panel Report, para. 2.30.
144Panel Report, para. 2.30.
145Panel Report, para. 2.31. At the time, Bi osecurity Australia was part of AQIS. (See supra,
footnote 4 of this Report)
146In 2004, Biosecurity Australia was created as a separate ag ency within the Commonwealth
Department of Agriculture, Fisheries and Forestry. Biosecurity Australia was given the responsibility of
reviewing and reissuing draft risk assessments in progress at that time, including the one relating to apples from
New Zealand. (See Panel Report, paras. 2.32 and 7.157; and Biosecurity Australia, Final Import Risk Analysis
Report for Apples from New Zealand (Canberra, November 2006) (the "IRA"), Part B (Panel Exhibit AUS-2),
p. 8)
147See Panel Report, para. 2.32; and IRA, Part B, p. 8.
148See Request for the Establishment of a Panel by New Zealand, WT/DS367/5.
149The Director of Animal and Plan t Quarantine is the Secretary of the Department of Agriculture,
Fisheries and Forestry. (Australia's first written submission to the Panel, para. 61)
150Australia's biosecurity regime is set out primarily in the Quarantine Act 1908 and its subordinate
legislation, including the Quarantine Proclamation 1998 . (Panel Report, paras. 7.124 and 7.125; Australia's
appellant's submission, paras. 20 and 21)
151See IRA, Part B, p. 2. See also Australia's first written submission to the Panel, para. 61.
152Biosecurity Australia Policy Memorandum 2007/07, Biosecurity Policy Determination – Importation
of Apples from New Zealand , 27 March 2007 (Panel Exhibit NZ-2) quoted, in relevant part, in Panel Report,
para. 7.165.

standard operating procedures that New Zealand a nd Australia must agree upon before exports of
apples can begin have yet to be agreed.
153
C. Relevant Aspects of the IRA and the Methodology Used
131. The risk assessment carried out by Biosecurity Australia consisted of several stages, including
pest risk assessment and pest risk management. 154 The scope of the IRA's risk assessment was the
importation of mature apple fruit free of trash, eith er packed or sorted and graded bulk fruit from
New Zealand. This was the "starting point" for the IRA's analysis.155
1. Pest Risk Assessment
132. The risk assessment process set out in the IRA cons isted of four interrelated steps: (a) pest
categorization; (b) an assessment of the probabili ty of entry, probability of establishment, and
probability of spread of the pest; (c) an assessment of the consequences associated with the pest; and
(d) combining the assessment of the probability of entry, establishment and spread with the
assessment of consequences to estimate the risk.156
(a) Pest Categorization and Pests at Issue
133. The IRA first considered whether each of a number of identified pests should be considered
as a quarantine pest for which a fu ll assessment of risk was needed. 157 Fire blight and ALCM were
among the pests that qualified as quarantine pests subject to further consideration.158
134. Fire blight is a plant disease caused by the bacterium Erwinia amylovora. The disease affects
apple trees, pear trees, and some other members of the Rosaceae family of plants. 159 In apple trees,
fire blight infects flowers, young leaves, stems, and fruits. The symptoms and seriousness of infection
vary, but disease development may be severe enough to result in plant death. 160 Some infected trees
develop cankers (sunken areas surrounded by cracked bark) on their limbs and trunks. In warm, wet,
spring conditions, cankers become active and exude a bacteria-laden ooze, which is the inoculum for

153Panel Report, para. 2.33.
154Panel Report, para. 2.34 (quoting IRA, Part B, p. 11).
155Panel Report, para. 2.27 (referring to IRA, Part B, p. 9). See also IRA, Part B, p. 105.
156Panel Report, para. 2.35 (quoting IRA, Part B, pp. 13 and 14).
157Panel Report, para. 2.37 (quoting IRA, Part B, p. 14).
158European canker was another of the ten pests that the IRA determined required full consideration for
the whole of Australia. In addition, the IRA found that six other pests required consideration for Western
Australia only. (Panel Report, paras. 2.38 and 2.39 (referring to IRA, Part B, pp. 47 and 48))
159Panel Report, paras. 2.1 and 2.2 (referring to IRA, Part C (Panel Exhibit AUS-3), p. 105; and
New Zealand's first written submission to the Panel, para. 3.46).
160Panel Report, para. 2.1 (referring to IRA, Part B, p. 52; and New Zealand's first written submission
to the Panel, para. 3.47).

primary infection in the springtime. Cankers b ecome inactive during the growing season, generally
cease ooze production during the summer, and rema in inactive until the following spring. 161 F i r e
blight may spread within host plants, infecting blos soms, fruits, spurs, twigs, branches, and leaves.
With appropriate environmental conditions, inocul um may then be exuded from infected shoots,
cankered bark, and infected fruitlets and blossoms. The inoculum may be spread by, for example,
rain, insects (including bees), and wind. 162 Depending on orchard conditions, fruit can be infested 163
with low levels of Erwinia amylovora , when small populations of the bacteria are present on the
developing flower parts. On rare occasions, an in fested flower can develop into a mature apple, but
bacteria are localized in the calyx (remnant of the blossom) in small numbers. In orchards with fire
blight symptoms, bacteria can also be present in small numbers on the surface of an apple, but such
external populations would not multiply and would tend to diminish over time. 164 Fire blight exists in
New Zealand, but not in Australia.165
135. ALCM, or Dasineura mali, is a small fly, 1.5-2.5mm long, which has a lifespan of only a few
days166 and reproduces sexually. 167 Apple trees are the only hosts of ALCM .168 Eggs laid by mated
females hatch to produce immobile larvae that de velop by feeding on the opening leaves of apple
trees. This prevents the leaves from unfurling normally or results in curled margins of the leaves, and
can result in reduced shoot and tree growth. 169 The larvae pupate, usually after having dropped to the
ground. A small population of larvae may, however, lodge in and pupate on the tree, often in cracks
in the bark or sometimes on the calyx- or stalk-ends of the fruit. 170 Pupating larvae spin silken
cocoons from which adult ALCM emerge. The life cycle of ALCM (mating, egg-laying, larval

161Erwinia amylovora can survive the winter in infected host plants. (Panel Report, paras. 2.3 and 2.4
(referring to IRA, Part B, p. 51; Part C, pp. 110 and 111; and New Zealand's first written submission to the
Panel, paras. 3.48 and 3.49))
162Panel Report, para. 2.5 (referring to IRA, Part B, p. 51; Part C, p. 110; and New Zealand's first
written submission to the Panel, para. 3.48).
163Infestation refers to the epiphytic (external) exis tence of a pest on the surface, whereas infection
refers to the endophytic (internal) occurrence of a pest in the tissue. Epiphytic infestation can occur at the stalk-
and calyx-ends, and on the surface, of mature fruit. (Panel Report, footnote 151 to para. 2.6; IRA, Part B, p. 52)
164Panel Report, para. 2.6.
165Panel Report, para. 2.8 (referring to IRA, Part B, p. 51; Australia's first written submission to the
Panel, para. 77; and New Zeal and's first written submission to the Panel, para. 3.55). In 1997, fire blight was
detected in Australia, but eradicati on efforts were undertaken and no further outbreaks have been reported.
(Panel Report, para. 2.8 (referring to IRA, Part C, p. 107))
166The lifespan of ALCM was indicated as 2 to 6 days under laboratory conditions by Australia, and
as 3 to 4 days under laboratory conditions and 1 to 2 days in the wild by New Zealand. (Panel Report, para. 2.21
(quoting IRA, Part B, p. 157; and New Zealand's first written submission to the Panel, para. 3.71))
167Panel Report, para. 2.21 (referring to IRA, Pa rt B, p. 157; and New Zealand's first written
168Panel Report, para. 2.20 (referring to IRA, Pa rt C, p. 121; and New Zealand's first written
169Panel Report, para. 2.21 (referring to New Z ealand's first written submission to the Panel,
para. 3.72).
170Panel Report, para. 2.22.

growth, pupation, and adult emergence) is usually repeated several times a year.
171 A L C M i s
presumed to be native to Europe and is found in cool to temperate apple-producing regions, including
in New Zealand. Australia is free from ALCM.172
(b) Assessment of the Probability of Entry, Establishment and Spread
136. For the quarantine pests in respect of which it had determined that a risk assessment was
needed, the IRA set out its methodology for assessing the annual probability of entry, probability of
establishment, and probability of spread of that pest in Australia. As explained below, there were
some differences in the methodol ogy used for pathogens (for example, bacteria and viruses),
including fire blight, and the methodology used for arthropod pests, including ALCM. For both, the
assessment was quantitative in natu re, and based on the assumption that apples would be "imported
from New Zealand for 12 months without phytosanitary measures".
173 The IRA estimated that the
volume of apple imports from New Zealand would be between 50 million a nd 400 million apples per
year, with a most likely volume of 150 million. 174 As with this estimate, most of the events for which
the IRA made quantitative estimates were expressed as probability intervals , rather than as single
numbers. As explained further below, the IRA also employed probability distributions to pinpoint a
value within each interval. The values assigned to the various steps and factors were based on the
scientific evidence reviewed by th e IRA as well as on the expert judgement of the IRA team (the
"IRA expert judgement").175
(i) Assessment for Pathogens (Including Fire Blight)
137. The IRA's assessment of the probability of entry consisted of three parts: (i) an estimation of
the probability of importation into Australia of an apple infested or infected with the pest; (ii) an
estimation of proximity, that is, the likelihood that major handlers and users of apples ("utility
points"176) would be located sufficiently close to pest hosts ("exposure groups") for transfer of pests

171Panel Report, para. 2.23.
172Panel Report, para. 2.25 (referring to New Z ealand's first written submission to the Panel,
para. 3.80).
173Panel Report, para. 2.56 (quoting IRA, Part B, p. 40).
174Panel Report, para. 7.503 (referrin g to IRA, Part B, pp. 17-19; and Australia's first written
submission to the Panel, paras. 98 and 99).
175Whenever the IRA team established to assess the ri sk associated with the importation of apples from
New Zealand, which ultimately consisted of six individuals, determined that there was scientific uncertainty, the
IRA team itself exercised expert judgement to reach conclusions. Austra lia explained to the Panel that the IRA
expert judgement was "used when ther e [was] limited evidence or where the underlying biological process is
naturally highly variable". (Panel Report, para. 7.438 (quoting Australia's response to Panel Question 30 after
the second Panel meeting, para. 162). See also paras. 7.433 and 7.746; and IRA, Part B, pp. 42 and 167)
176Utility points are "key points ... at which apples ar e distributed or utilised and at which apple waste
will be generated". (IRA, Part B, p. 25)

from imported apples to susceptible host plants to take place 177; and (iii) an estimation of exposure,
that is, the likelihood of transfer of a pest from an infested or infected apple to a susceptible host
plant.178 In its analysis, the IRA assumed that any exposure of the pathogen to a susceptible host
would take place only from infested or infected apples discarded as waste, rather than via any other
pathway.179
138. The IRA calculated the probability of importation using two key concepts: (i) eight
importation steps; and (ii) ten importation scenarios. 180 Each importation step represents a discrete
point in the journey that apples will make in trave lling from the orchard in New Zealand to arrival in
Australia.181 The IRA assigned a probability value to each importation step, representing the
proportion of apples that would be infested or infected with the relevant pest at that point
("importation step value").
182 The "importation scenarios" represent a number of different ways of
combining these importation steps.183 In each importation scenario, the initiating step "is the sourcing

177Panel Report, paras. 2.44 and 7.377 (referring to IRA, Part B, p. 29).
178Panel Report, para. 2.45 (referring to IRA, Part B, p. 27).
179IRA, Part B, p. 33.
180The IRA refers to importation scenarios also as "biological pathway scenarios" and "importation
pathways".
181Panel Report, para. 2.41. The importation steps used in the IRA are:
- Importation step 1 (Imp1): the proportion of New Zealand orchards in which the pest is
present;
- Importation step 2 (Imp2): the proportion of fruit coming from an infected or infested
orchard in New Zealand that is infected or infested with the pest;
- Importation step 3a (Imp3a): the proportion of clean fruit from infected or infested
orchards in New Zealand that is contaminated by the pest during picking and transport
to the packing house;
- Importation step 3b (Imp3b): the proportion of clean fruit from uninfected or uninfested
orchards in New Zealand that is contaminated by the pest during picking and transport
to the packing house;
- Importation step 4 (Imp4): the proportion of infected or infested fruit that remains
infected or infested by the pest after routine processing procedures in the packing house;
- Importation step 5 (Imp5): the proportion of clean fruit that is contaminated by the pest
during processing in the packing house;
- Importation step 6 (Imp6): the proportion of infected or infested fruit that remains
infected or infested by the pest during palletization, quality inspection, containerization
and transportation to Australia;
- Importation step 7 (Imp7): the proportion of clean fruit that is contaminated by the pest
during palletization, quality inspection, cont ainerization and transportation to Australia;
and
- Importation step 8 (Imp8): the proportion of infected or infested fruit that remains
infected or infested by th e pest after on-arrival minimum border procedures for the
unrestricted analyses.
These definitions refer to the likelihood of infection or infestation at each importation step. However,
in this Report, we use the term "importation step" to refer only to a particular point in the journey of an apple
from New Zealand to Australia, and the term "importation step value" to refer to the likelihood associated with
each such importation step.
182Panel Report, para. 2.41 (quoting IRA, Part B, p. 21).
183The IRA explains that each "biological pathway", or "importation scenario", is an "ordered sequence
of steps undertaken in sourcing, processing and exporting a commodity up to the point where it is released from
quarantine by the importing country". (Panel Report, para. 2.42 (quoting IRA, Part B, p. 19))

of apples from orchards in New Zealand and the end-poi nt is the arrival in Australia of infected or
infested fruit or packaging materials."
184 Since, however, the scenari os include the possibility of
contamination of clean fruit at certain importation steps (importation steps 3, 5, and 7), as well as the
possibility that the pest is eliminated at certain other steps (importation steps 4, 6, and 8), only one
importation scenario is a simple sequence of importation steps representing an apple that was infested
or infected in the orchard in New Zealand and remained infested or infected upon release from
quarantine in Australia. The remaining nine importation scenarios represent different combinations of
those importation steps, or different scenarios as to how an apple may become or cease to be infested
or infected during the process of importation.
185 The probabilities associated with each of the ten
individual importation scenarios were added to arrive at the overall probabilit y of importation of an
apple infested or infected with the relevant pest.186
139. Turning to the other two elements of the IRA's an alysis of the probability of entry, first, with
regard to proximity, the IRA estimated the likelihood that a utility point is located sufficiently close to
an exposure group for some likelihood of transfer of the pest to a susceptible host plant to exist. The
IRA accordingly combined five utility points—na mely, orchard packing house/wholesalers, urban
packing house/wholesalers, retailers, food service industries, and consumers 187—and four exposure
groups—namely, susceptible commercial fruit cr ops, susceptible nursery plants, susceptible
household and garden plants, and susceptible wild and amenity species 188—and assigned point
estimates or probability ranges to the resulting 20 different combinations.
140. Second, with regard to exposure, the IRA explained that it is a complex variable dependent on
a number of factors, such as viability of the p est, survival mechanism of the pest, transfer
mechanism(s) of the pest, host receptivity, and environmental factors. 189 The IRA noted that a
sequence of events needs to be completed for success ful exposure of host plants to the pest carried by
infested or infected apples, and analyzed key steps in such sequence of events.190
141. The next step in the IRA's methodology was to estimate the probabilities of establishment and
spread of the pest in Australia for each of the four exposure groups. 191 This involved examination of
a number of biological factors associated with the likelihood that a pest will successfully propagate on
or in a susceptible host (establishment) and di sperse from there within the larger population of

184Panel Report, para. 2.42 (quoting IRA, Part B, p. 19).
185Panel Report, paras. 2.42 and 2.43 (referring to IRA, Part B, p. 19).
186Panel Report, para. 2.43 (referring to IRA, Part B, p. 23).
187Panel Report, para. 2.44 (referring to IRA, Part B, p. 25).
188Panel Report, para. 2.45 (referring to IRA, Part B, pp. 28 and 29).
189Panel Report, para. 2.45 (referring to IRA, Part B, p. 27).
190Panel Report, para. 7.381 (quoting IRA, Part B, p. 27). See also IRA, Part B, p. 85.
191Panel Report, para. 2.51; IRA, Part B, pp. 31-33.

susceptible hosts (spread).192 The IRA considered various factors in order to estimate the probability
of establishment 193 and the probability of spread 194, explaining that, in doing so, it was following
international guidelines for risk analysis.195
142. Lastly, the IRA generated an overall estimate of the annual probability of entry, establishment
and spread by combining the various probability valu es that it had assigned to the various steps, along
with the estimated volume of apples, in a computer program called @Risk (Palisade
Corporation, 2007).196
(ii) Assessment for Arthropods (Including ALCM)
143. With regard to arthropod pests, the methodol ogy used to assess the probability of entry,
establishment and spread differed slightly from that used for pathogens, to take account of the fact
that such pests are mobile and that a mating pair would be needed to establish a population. 197
Accordingly, the IRA focused on the number of infested apples that could be at a particular location at
the same time rather than, as it had done for pa thogens, on following individual apples through the
distribution chain. The assessment of the probability of entry, establishment and spread of arthropods
involved five steps: steps one and two were esti mations of the probability of importation and of the

192Panel Report, para. 2.47; IRA, Part B, pp. 17 and 29.
193Probability of establishment was derived from a comparative assessment of: availability of suitable
hosts, alternate hosts and vectors in the pest risk analysis area; suitability of the environment; cultural practices
and control measures; and other characteristics of the pest relevant to the probability of establishment. (Panel
Report, para. 2.48 (referring to IRA, Part B, p. 30))
194Probability of spread was derived from a comparative assessment of: suitability of the natural and/or
managed environment for natural spread of the pest; pr esence of natural barriers; the potential for movement
with commodities or conveyances; intended use of the commodity; potential vectors of the pest in the pest risk
analysis area; and potential natural en emies of the pest in the pest risk analysis area. (Panel Report, para. 2.49
(referring to IRA, Part B, p. 31))
195International Standards for Phytosanitary Measures ("ISPM"s) are adopted by the Commission on
Phytosanitary Measures, which governs the International Plant Protection Convention (the "IPPC"). The IPPC
is an international treaty to secure action to prevent th e spread and introduction of pests of plants and plant
products, and to promote appropriate measures for their control. Two ISPMs, Pest risk analysis for quarantine
pests, including analysis of environmental risks and living modified organisms , 2004 (ISPM No. 11, FAO,
Rome (Panel Exhibit AUS-6) ("ISPM No. 11"), together with Framework for pest risk analysis , 2007
(ISPM No. 2, FAO, Rome) ("ISPM No. 2"), present the general framework for conducting a pest risk
assessment. (Panel Report, paras. 2.69 and 2.71)
196According to the Panel:
A Monte Carlo stochastic (random) simulation model was used with @Risk,
based on random sampling from the set of values. The @Risk software
selected a number from within each pr obability range, taking into account the
shape of the range, to represent the likelihood of an event occurring; it did
this thousands of times to produce an output in the form of a distribution
representing the annual probability of entry, establishment and spread.
The 5 per cent, median and 95 per cent values of the range were included in
the [IRA].
(Panel Report, para. 2.64 (referring to Australia's first wr itten submission to the Panel, paras. 90 and 106; and
New Zealand's first written submission to the Panel, para. 4.190). See also IRA, Part B, pp. 35 and 97)
197Panel Report, para. 2.50; IRA, Part B, pp. 33-35.

distribution of infested apples to utility points, which were the same as in the analysis for pathogens.
In step three, called a "scenario analysis", the IRA estimated the number of infested apples that could
be at a particular location at the same time.
198 In step four, the estimated numbers obtained in step
three were combined with the pest's ability to est ablish and spread, and the IRA estimated the partial
probability of entry, establishment and spread for each combination of a utility point and an exposure
group, resulting in 20 partial probabilities of entry, establishment and spread. 199 Step five, the process
of combining these partial probabilities using the @Risk program, was similar to that used for
pathogens.
(c) Assessment of Consequences
144. The IRA assessed the potential biological, economic, social, and environmental effects of a
pest by dividing such effects into two categories: direct criteria 200; and indirect criteria. 201 For each
criterion, the IRA estimated the impact of a pest or disease at four levels—local, district, regional, and
national—and described such impact in qualitative terms—"unlikely to be discernible", "of minor
significance", "significant", or "highly significant". 202 The IRA then used a correspondence table to
convert those qualitative terms into impact scores, ranging from the least significant
consequences, "A", to the most significant consequences, "G".
203 Individual impact scores were then
evaluated based on certain "decision rules" set forth in the IRA 204, to arrive at an overall conclusion
on the potential biological and economic conseque nces. The overall conclusion was expressed in
qualitative terms, namely, "negligible", "very low", "low", "moderate", "high", or "extreme".205
(d) Combining the Estimated Probability of Entry, Establishment and
Spread with the Estimate of Consequences
145. As indicated above, the IRA combined a quantita tive assessment of the probability of entry,
establishment and spread with a qualitative assessm ent of potential consequences, which Australia
describes as a "semi-quantitative approach".206

198Panel Report, para. 2.50 (quoting IRA, Part B, p. 33).
199Panel Report, para. 2.50; IRA, Part B, pp. 34 and 35.
200The direct criteria were: plant life or health; human life or health; an d any other aspects of
environmental effects. (Panel Report, para. 2.53 (quoting IRA, Part B, p. 36))
201The indirect criteria were: control or eradica tion; domestic trade and international trade;
environment; and communities. (Panel Report, para. 2.54 (quoting IRA, Part B, p. 37))
202Panel Report, para. 2.55; IRA, Part B, pp. 38 and 39.
203Panel Report, para. 7.458.
204IRA, Part B, pp. 39 and 40.
205Panel Report, para. 2.55 (quoting IRA, Part B, pp. 39 and 40).
206Panel Report, para. 2.61 (quoting IRA, Part B, p. 11).

146. When assigning quantitative values to the likeli hoods associated with the importation steps
and the factors relating to proximity, exposure, establishment and spread, the IRA used both point
values (a single number) and, more freque ntly, probability intervals or ranges. 207 These were based
on the scientific evidence and resources, as well as on the IRA expert judgement. Three types of
probability distributions were used in connection wi th the probability intervals: uniform, triangular,
and pert. 208 All three distributions have a maximum and a minimum value. Triangular and pert
distributions also have a third parameter: a most likely value.209 In a uniform distribution, in contrast,
each value in the continuous range between the se minimum and maximum values occurs with equal
probability. The IRA states that uniform dist ribution was used where there was insufficient
information to determine a most likely value.210
147. To combine the quantitative estimates of the ove rall probability of entry, establishment and
spread with the qualitative description of the pot ential overall consequences of the pest, the IRA
established a correspondence between the quantitativ e values and qualitative likelihood ratings, as set
out in the "nomenclature" table reproduced below. The IRA then used a "risk estimation matrix" to
combine the resulting qualitative likelihood rating wi th the qualitative consequences rating to yield an
overall determination of the "unrestricted risk" 211 associated with each pest if apples from
New Zealand were imported into Australia for 12 months without any phytosanitary measures. 212
This matrix generates one of six possible results: negligible risk, very low risk, low risk, moderate
risk, high risk, or extreme risk.

207In most cases, the IRA selected an interval from a set of six pre-defined quantitative ranges
suggested in Biosecurity Australia's 2001 draft Guidelines for import risk analysis , although the IRA team was
not constrained to do so. (Panel Report, para. 2.65 (referring to IRA, Part B, p. 42; and Guidelines for import
risk analysis (Draft, Canberra, September 2001) (Panel Exhibit AUS-17))) These intervals are the ones set out
in the third column of Table 12 at page 43 of Part B of the IRA, reproduced infra, para. 147 of this Report.
208Panel Report, para. 2.66 (referring to IRA, Part B, p. 42).
209The triangular distribution is not necessarily symmetric, but can be skewed by placing the most
likely value towards either minimum or maximum value and was used when information on the most likely
value was available. Like the triangular distribution, the pert distribution has minimum and maximum values
and a most likely value. However, unlike the triangular distribution, "[t]he [p]ert distribution generates a
smooth distribution curve that ... places progressively more emphasis on values close to the most likely value."
The pert distribution was used only to model the projected volume of New Zealand apples imported to
Australia. (Panel Report, paras. 2.66 (referring to IRA, Part B, p. 42) and 7.493 (referring to Dr. Schrader's
response to Panel Question 135, Panel Report, Annex B-1, para. 783))
210Panel Report, para. 2.66 (referring to IRA, Part B, p. 42).
211The IRA defines risk as "a function of the likelihoods of an event occurring and the consequences or
impact resulting from that event". (IRA, Part B, p. 40)
212Panel Report, para. 2.56 (quoting IRA, Part B, p. 40).

Nomenclature for Qualitative Likelihoods Used by the IRA
Likelihood Qualitative descriptors Probability interval Midpoint (if uniform
distribution)
High The event would be very likely
to occur
0.7 → 1 0.85
Moderate The event would occur with an
even probability
0.3 → 0.7 0.5
Low The event would be unlikely to
occur
5 × 10-2 → 0.3 0.175
Very low The event would be very
unlikely to occur
10-3 → 5 × 10-2 2.6 × 10 -2
Extremely low The event would be extremely
unlikely to occur
10-6 → 10-3 5 × 10 -4
Negligible The event would almost
certainly not occur
0 → 10-6 5 × 10 -7
Source: Australia's appellant's submission, para. 42; IRA, Part B, Table 12, p. 43.

Risk Estimation Matrix Used by the IRA213

High Negligible
risk
Very low
risk
Low risk Moderate
risk
High risk Extreme
risk
Moderate Negligible
risk
Very low
risk
Low risk Moderate
risk
High risk Extreme
risk
Low Negligible
risk
Negligible
risk
Very low
risk
Low risk Moderate
risk
High risk
Very low Negligible
risk
Negligible
risk
Negligible
risk
Very low
risk
Low risk Moderate
risk
Extremely
low
Negligible
risk
Negligible
risk
Negligible
risk
Negligible
risk
Very low
risk
Low risk

Likelihood of entry,
establishment and spread
Negligible Negligible
risk
Negligible
risk
Negligible
risk
Negligible
risk
Negligible
risk
Very low
risk
 Negligible Very low Low Moderate High Extreme
 Consequences of entry, establishment and spread
Source: Australia's appellant's submission, para. 45; IRA, Part B, Table 11, p. 41.

2. Pest Risk Management
148. According to the IRA, risk management is the process of identifying and implementing
measures to mitigate risks of the pest so as to ach ieve Australia's appropria te level of protection. 214

213Australia's appropriate level of protection of "very low risk" is indicated in white.
214Panel Report, para. 2.58 (quoting IRA, Part B, p. 41).

The IRA expresses Australia's appropriate level of protection as "providing a high level of sanitary or
phytosanitary protection aimed at reducing risk to a very low level, but not to zero". 215 Thus, if the
unrestricted risk identified through the risk estima tion matrix was "negligible" or "very low", it did
not exceed Australia's appropriate level of protection, and risk management measures were not
required. In contrast, if the unrestricted risk was "low", "moderate", "high", or "extreme", it exceeded
Australia's appropriate level of protection, and thus risk management measures would be required.
216
In such circumstances, the IRA used the same risk assessment me thodology to assess the effects of,
and risk associated with, potential risk management measures.217
D. The IRA's Conclusions on Fire Blight
1. Pest Risk Assessment
(a) Assessment of Probability of Entry, Establishment and Spread
149. The IRA assigned an importation step value of 1 (100 per cent) to importation steps 1 and 8,
and importation step values based on probability inte rvals and triangular distribution to the other six
importation steps. 218 Inserting these values into the ten different importation scenarios, the IRA
estimated the overall probability of importation of apples infested with Erwinia amylovora to
be 3.9 per cent of the total number of apples that would be imported from New Zealand annually.219
150. With regard to proximity220, the IRA estimated the likelihood, for each exposure group, that a
utility point is sufficiently close to a susceptible host plant for there to be some likelihood of transfer
of Erwinia amylovora . In considering the combinations of five utility points and four exposure
groups221, the IRA determined, for the combination of orchard wholesalers and commercial fruit
crops, that the proportion of utility points sufficiently close to susceptible host plants in the exposure
group is 1 (100 per cent), whereas, for the other 19 combinations, the IRA determined probability
intervals, with various minimum and maximum valu es, all of which were combined with uniform

215Panel Report, para. 2.59 (quoting IRA, Part B, p. 4).
216Panel Report, para. 2.59 (referring to IRA, Part B, p. 41).
217IRA, Part B, p. 41.
218Panel Report, paras. 7.255, 7.266, 7.283, 7.298, 7.311, 7.326, 7.338, and 7.347 (referring to IRA,
Part B, pp. 54, 65, 71, 77, 79, and 80).
219More specifically, having inserted its probability estimates into the risk simulation model, the
probability of importation was estimated by the IRA as "3.9 × 10 -2 (mean), 2.2 × 10 -2 (5 th percentile)
and 5.6 × 10-2 (95th percentile)". (Panel Report, para. 7.353 (quoting IRA, Part B, p. 80))
220As described above, proximity is the likelihood that major handlers and users of apples (utility
points) would be located sufficiently close to pest hosts (exposure groups) for transfer of pests from imported
apples to host plants to take place.
221Panel Report, paras. 2.44 and 2.45 (referring to IR A, Part B, pp. 24-29). The five utility points and
four exposure groups are described supra, para. 139 of this Report.

distribution.
222 The IRA further considered two alterna tive scenarios regarding proximity. Under the
first scenario, 70 to 100 per cent of imported appl es would be distributed to orchard packing houses
and the remainder to urban wholesalers, while under the second scenario, only 0.1 to 5 per cent of
imported apples would be distributed to orchard packing houses.223
151. With regard to exposure 224, the IRA assigned, to each of the 20 combinations of five utility
points and four exposure groups, an exposure value fo r an individual apple consisting of a range with
a minimum value of 0 and a maximum value of 10 -6, using uniform distribution. 225 T h e I R A
explained that this range was based on the IRA's views on both mechanical 226 and insect mediated 227
transmission, and explicitly ac knowledged "that in some circumstances the chances of exposure
would be zero".228
152. The IRA then estimated the partial probability of establishment and the partial probability of
spread for each of the four exposure groups. A ll eight partial probabilities—four for establishment
and four for spread—were described as a proba bility interval with a uniform distribution. 229
Subsequently, using the @Risk program, the IRA co mbined the partial probability of establishment,
the partial probability of spread, the probability of importation, and the estimated volume of apples, so
as to calculate the overall probability of entry, establishment and spread. 230 Using the two scenarios
regarding proximity described above 231, the IRA generated two probability values 232, both of which
fell within the category of "very low" in the IRA's nomenclature.233
(b) Assessment of Consequences
153. The IRA assigned the following impact scores in its assessment of the potential consequences
of the entry, establishment and spread of fire blight in Australia: (i) for the direct consequences, the

222Panel Report, para. 7.377 (referring to IRA, Part B, p. 85).
223Panel Report, para. 7.377 (referring to IRA, Part B, pp. 25, 26, and 97).
224As described above, exposure is the likelihood of transfer of a pest from an infested apple to a
susceptible host plant.
225Panel Report, para. 7.381.
226Mechanical transmission refers to transmission through, for exam ple, exposure of workers and
equipment to the pest. (Panel Report, para. 7. 398 (quoting IRA, Part B, pp. 87 and 88))
227Insect mediated transmission refers to a transfer of bacteria to a susceptible host plant by insects that
have browsed on discarded apples. (Panel Report, para. 7. 398 (quoting IRA, Part B, pp. 87 and 88))
228Panel Report, para. 7.381 (quoting IRA, Part B, p. 90).
229Panel Report, para. 7.426 (referring to IRA, Part B, pp. 95-97).
230Panel Report, para. 7.427 (referring to IRA, Part B, p. 97).
231Supra, para. 150 of this Report.
232The 5 per cent, median, and 95 per cent values generated were: 9.1 × 10 -3, 4.5 × 10 -2, and 0.18,
under the first scenario, and 8.7 × 10 -3, 4.4 × 10 -2, and 0.18 under the second scenario. The Panel described
these two sets of probability values as "almost identical". (Panel Report, para. 7.432; IRA, Part B, Table 21,
p. 97)
233Panel Report, para. 7.427 (referring to IRA, Part B, p. 97).

IRA assigned an "F"234 to the effects on plant life or health, and an "A" 235 to the effects on human life
or health and on any other aspects of the environment 236; and (ii) for the indirect consequences, the
IRA assigned an "E"237 to control and eradication, and to impact on the domestic industry, a "D" 238 to
the effects on international trade and on commun ities, and an "A" to effects on the environment. 239
The IRA applied its decision rules 240 in combining those allocated impact scores to arrive at the
outcome that the overall potential biological and economic consequences of fire blight were "high".241
(c) Combining the Estimated Probability of Entry, Establishment and
Spread with the Estimate of Consequences
154. At the end of its assessment of risk, the IR A combined the overall probability of entry,
establishment and spread ("very low") with the estimate of consequences ("high") using the risk
estimation matrix. In accordance with the matrix, the IRA concluded that the unrestricted risk of fire
blight was "low".242
2. Pest Risk Management
155. Since the unrestricted risk of fire blight was "low" and thus exceeded Australia's appropriate
level of protection, the IRA proceeded to the stage of risk management. Because the IRA considered
that the unrestricted risk was influenced by, in partic ular, the number of infested or infected apples at
importation steps 2, 3, 4, and 5, the IRA focu sed on measures that could reduce the likelihood
allocated to these steps. 243 Using its risk assessment methodology, the IRA considered four risk
mitigation options: (i) sourcing apples for export from individual orchards free from fire blight
disease symptoms; (ii) chlorine or other suitable disi nfection treatment; (iii) cold storage of apples
for six weeks prior to export; and (iv) systems appr oaches, that is, combinations of two or more of

234"F" means "significant" with regard to national consequences, and "highly significant" with regard to
regional, district, and local consequences. (IRA, Part B, p. 39)
235"A" means "unlikely to be discernible" with regard to all national, regional, district, and local
consequences. (IRA, Part B, p. 39)
236Panel Report, para. 7.459 (referring to IRA, Part B, p. 100).
237"E" means "minor" with regard to national consequences, "significant" with regard to regional
consequences, and "highly significant" with regard to district and local consequences. (IRA, Part B, p. 39)
238"D" means "unlikely to be discernible" with regard to national consequences, "minor" with regard to
regional consequences, "significant" with regard to district consequences, and "highly significant" with regard to
local consequences. (IRA, Part B, p. 39)
239Panel Report, para. 7.460 (referring to IRA, Part B, pp. 100-104).
240The IRA has preset conversion criteria. In the anal ysis for fire blight, the IRA applied the rule that,
where the consequences of a pest with respect to a singl e criterion are "F" and the consequences of a pest with
respect to remaining criteria are not unanimously "E", th e overall consequences are considered to be "high".
(IRA, Part B, p. 40)
241Panel Report, para. 7.461 (referring to IRA, Part B, p. 104).
242Panel Report. para. 7.462 (referring to IRA, Part B, pp. 104 and 105).
243Panel Report, para. 2.106; IRA, Part B, pp. 105-107.

these options.
244 The IRA concluded that none of the individual options would sufficiently reduce
risk by itself, but that the combination of sourci ng apples from orchards free of fire blight symptoms
and disinfection would reduce the risk to "very low", that is, within Australia's appropriate level of
protection.245
E. The IRA's Conclusions on ALCM
1. Pest Risk Assessment
(a) Assessment of Probability of Entry, Establishment and Spread
156. The IRA assigned an importation step value of 1 (100 per cent) to importation steps 1 and 8,
and an importation step value of zero to importati on steps 5 and 7. For the other four importation
steps, importation step values were determined as probability intervals, two with triangular
distribution and two with uniform distribution. 246 Using these values, the IRA estimated the overall
probability of importation of apples infested with ALCM to be 4.1 per cent of the total number of
apples that would be imported from New Zealand annually. 247 In addition to this estimation of the
likelihood of importation (the "ori ginal estimation") for ALCM, the IRA also used an alternative
method to estimate the overall probability of importa tion, which was based on data submitted by
New Zealand to Biosecurity Australia in 2005 (the "August 2005 data"). Using these figures, the IRA
calculated the likelihood of importation of infested apples as 0.13 per cent of the total number of
apples that would be imported from New Zealand annually. 248 In the subsequent steps of its analysis,
the IRA considered both sets of data.
157. With regard to proximity, the IRA again consid ered each of the combinations of five utility
points and four exposure groups. 249 The IRA determined, for the combination of orchard wholesalers
and commercial fruit crops, that the proportion of ut ility points sufficiently close to susceptible host
plants in the exposure group was 1 (100 per cent), whereas, for the other 19 combinations, the IRA
determined probability intervals with various mi nimum and maximum values, all of which were

244IRA, Part B, p. 106.
245IRA, Part B, pp. 114-116; see also Panel Report, para. 2.91.
246IRA, Part B, pp. 159-166.
247More specifically, having inserted its probability estimates into the risk simulation model, the
probability of importation was estimated as "4.1 × 10 -2 (mean), 2.1 × 10 -2 (5 th percentile) and 6.5 × 10 -2
(95th percentile)". (IRA, Part B, p. 165; see also Panel Report, para. 7. 1360)
248More specifically, the IRA approximated the information provided by New Zealand as a triangular
distribution with a minimum value of 10-3, a most likely value of 1.3 × 10-3, and a maximum value of 3.8 × 10-3.
(IRA, Part B, p. 166)
249Panel Report, paras. 2.44 and 2.45 (referring to IRA, Part B, pp. 25-29).

combined with uniform distribution. 250 Here, the IRA specifically mentioned that the estimated
likelihoods were determined by IRA expert judgement.251
158. With regard to the transfer of ALCM to host plants from the utility point, the IRA noted that
only adult insects' flight enables transfer of the pest from the fruit or packaging to the environment
surrounding a utility point. 252 The IRA further explained that a successful transfer of ALCM from
infested fruit to a host plant requires that a female , after having emerged from her cocoon, attracts and
mates with a male, and lays her eggs on a susceptible host plant during her short lifespan; and that a
sufficient number of those eggs survive and hatch.253
159. To calculate the number of infested fruit arriving at each combination of a utility point and an
exposure group, the IRA made two se ts of estimates for the 20 combina tions of five utility points and
four exposure groups, one set based on its origin al estimation and the other on the August 2005
data.254 In addition, as it did with fire blight, the IR A further considered two scenarios relating to the
proportion of imported apples that would be distributed to orchard packing houses.255
160. The IRA then estimated, for each of the 20 co mbinations of five utility points and four
exposure groups, a partial probability of entry, est ablishment and spread. The IRA again generated
two data sets using, for the likelihood of importati on, both its original estimation and the August 2005
data. All forty probabilities were presented as intervals combined with uniform distribution.256
161. Using @Risk, the IRA combined the partial pr obabilities of entry, establishment and spread
so as to calculate the overall probability of entr y, establishment and spread based on the original
estimation and the August 2005 data, respectively. The probability ranges generated for the two
scenarios corresponded to a qualitative likelihood of entry, establishment and spread of "high" 257
(using the original estimation) and "moderate" 258 (using the August 2005 data) in the IRA's
nomenclature.

250IRA, Part B, p. 168.
251Panel Report, para. 7.803 (referring to IRA, Part B, p. 167).
252IRA, Part B, p. 171.
253IRA, Part B, p. 171.
254IRA, Part B, pp. 171-174.
255Supra, para. 150 of this Report.
256IRA, Part B, p. 179. The IRA states that "[t]hese estimates are based on expert opinion taking into
account" the factors identified in its analysis, and discusses issues and evidence relevant to the likelihoods, both
in general and for specific utility points. (Ibid., p. 178)
257The 5 per cent, median, and 95 per cent values generated were: 0.56, 0.73, and 0.89. (IRA, Part B,
p. 183)
258The 5 per cent, median, and 95 per cent values generated were: 0.33, 0.51, and 0.68. (IRA, Part B,
p. 183)

(b) Assessment of Consequences
162. The IRA assigned the following impact scores in its assessment of the potential consequences
of the entry, establishment and spread of ALCM in Australia: (i) for the direct consequences, the IRA
assigned a "D"
259 to the effects on plant life or health, and an "A" 260 to the effects on human life or
health and on any other aspects of the environment 261; and (ii) for the indirect consequences, the IRA
assigned a "D" to the effects on control and eradi cation, on domestic industry, and on international
trade262, and a "B" 263 to the effects on the environment and on communities. 264 The IRA applied its
decision rules265 to the combination of those allocated impa ct scores, and concluded that the overall
potential biological and economic consequences associated with ALCM were "low".266
(c) Combining the Estimated Probability of Entry, Establishment and
Spread with the Estimate of Consequences
163. Finally, the IRA combined the overall probability of entry, establishment and spread with the
estimate of consequences using the risk estima tion matrix. The overall probability of entry,
establishment and spread of ALCM was "high" (usi ng the original estimation) and "moderate" (using
the August 2005 data), and the estimate of conse quences was "low". Based on these ratings, the IRA
concluded that the overall unrestricted risk of ALCM was "low" for both data sets.267
2. Pest Risk Management
164. Since the unrestricted risk of ALCM was "l ow" and thus exceeded Au stralia's appropriate
level of protection, the IRA proceeded to the stag e of risk management. The IRA focused on two
principal options to reduce risk: (i) inspection of apples coupled with remedial action when the
inspection finds pests; and (ii) mandatory treatment of all apples. Noting that ALCM is highly
visible, and that fumigation is assumed to be 100 pe r cent effective in killing it, the IRA considered

259As described above, "D" means "unlikely to be discernible" with regard to national consequences,
"minor" with regard to regional consequences, "significant" with regard to district consequences, and "highly
significant" with regard to local consequences. (IRA, Part B, p. 39)
260As described above, "A" means "unlikely to be discernible" with regard to all national, regional,
district, and local consequences. (IRA, Part B, p. 39)
261IRA, Part B, pp. 184 and 185.
262Panel Report, para. 7.883; IRA, Part B, pp. 185 and 186.
263"B" means "unlikely to be discernible" with regard to national, regional, and district consequences,
and "minor" with regard to local consequences. (IRA, Part B, p. 39)
264IRA, Part B, pp. 186 and 187.
265In the analysis for ALCM, the IRA applied the rule that, where the consequences of a pest with
respect to one or more criteria are "D", the overall consequences are considered to be "low". (IRA, Part B, p. 40)
266Panel Report, para. 7.878 (quoting IRA, Part B, p. 187).
267IRA, Part B, pp. 187 and 188.

whether an inspection of 600 fruit from each lot 268, followed by fumigation or destruction of lots or
consignments found to contain ALCM, would sufficiently reduce the risk. 269 The IRA recalculated
the probability of entry, establishment and spread for this restricted risk scenario, using the data relied
upon for its original estimation of likelihood of im portation, and concluded that the measure would
reduce this likelihood to "extremely low". When combined with "low" consequences in the risk
estimation matrix, the overall risk associated with th is measure was determined to be "negligible",
that is, within Australia's a ppropriate level of protection. 270 The IRA also noted that this analysis
predicted that ALCM will be detected in "practica lly every" lot, which would result in fumigation of
every lot. The IRA went on to consider the efficacy of this risk management measure at different pest
infestation rates. In particular, the IRA consid ered a "worst case" scenario in which, with an
infestation rate of 0.17 per cent, inspection of a 600-fruit sample would allow lots to pass undetected,
meaning that the overall likelihood of importation of infested apples would be 0.06 per cent. When
this number was used in the overall calculation, the result was that the restricted risk would exceed
Australia's appropriate level of protection.271 Noting that this "worst case" infestation level fell within
the range of the August 2005 data provided by New Zealand, the IRA tested the relationships between
sample sizes and infestation rates at the high and lo w ends of the data provided by New Zealand. On
the basis of this analysis, the IR A then considered an inspection of 3000 fruit from each lot, and
concluded that the combination of a 3000-fruit inspec tion and suitable treatment or rejection of lots
where ALCM was found would reduce the risk to "ver y low", within Australia's appropriate level of
protection.272 The IRA also identified an alternative risk management measure that would sufficiently
reduce the risk, namely, treatment (fumigation) of all lots to kill ALCM 273, combined with a 600-fruit
inspection.274

268The IRA defines "lot" as "all apple fruit packed for export to Australia each day by a registered
packing house" and, thus, the Panel noted that "a 'lot' is not a fixed quantity". (Panel Report, para. 7.1347
(quoting IRA, Part B, p. 342)) However, when considering the risk management measures for ALCM, the IRA
referred to a lot size of 20,000 fruit and mentioned that variations in lot size had made very little difference to
the probabilities that an infested apple remains infested after inspection and fumigation. (IRA, Part B, p. 188)
269Panel Report, para. 7.1301 (quoting IRA, Part B, p. 188).
270Panel Report, para. 7.1301 (quoting IRA, Part B, p. 190); IRA, Part B, p. 189.
271Panel Report, para. 7.1302 (quoting IRA, Part B, p. 190).
272Panel Report, para. 7.1303 (quoting IRA, Part B, p. 191).
273Panel Report, para. 7.1305 (quoting IRA, Part B, p. 192).
274This inspection is to check for pests other than ALCM. (IRA, Part B, p. 321)

V. Annex A(1) to the SPS Agreement: "SPS Measure"
165. Australia's first ground of appeal relates to the Panel's finding that:
[t]he 16 measures at issue in the cu rrent dispute, both as a whole and
individually, constitute SPS measures within the meaning of
Annex A(1) and are covered by the SPS Agreement.
275
166. Australia appeals this finding, at least in part. Australia accepts that all of the measures at
issue constitute SPS measures when taken as a whole or "grouped appropriately". 276 However,
Australia takes issue with the Panel's finding that the 16 measures at issue constitute SPS measures
not only as a whole, but also individually. Australia argues that the Panel's finding that
the 16 measures at issue all have a purpose that corresponds to Annex A(1) to the SPS Agreement is
not sufficient for each of them individually to amount to an SPS measure. Australia alleges that the
Panel failed to assess whether the 16 measures at issue individually meet the requirements of
Annex A(1) to the SPS Agreement.
167. According to Australia, there are not 16 separate SPS measures, but only four SPS measures,
namely, two principal risk management measures relating to fire blight, one principal risk
management measure relating to European canker, and one principal risk management measure
related to ALCM. Australia maintains that several of what New Zealand had identified as "measures"
were merely "ancillary" 277 requirements that could not individuall y give rise to a violation of the
relevant obligations and therefore could not be challenged individually. In Australia's submission, the
ancillary requirements are meaningless and ine ffective if considered individually as they are
dependent on, and merely serve to implement or maintain, the principal risk management measures.278
168. New Zealand responds that the Panel did not err in finding that the 16 measures constitute
SPS measures both as a whole and individually. New Zealand disagrees with Australia's conception
of "principal" and "ancillary" measures and submits that an SPS regime may be made up of multiple
interlinked measures. The fact that one measure is linked to another measu re does not disqualify it
from being an SPS measure in its own right. 279 New Zealand also points ou t that the last sentence of
Annex A(1) lists, as examples of SPS measures, the very types of measures that Australia argues are
"ancillary" and therefore not in themselves SPS measures.280

278Australia's first written submission to the Panel, paras. 135-144. See also Australia's responses to
Panel Questions after the first Panel meeting, Annex A.
279New Zealand's appellee's submission, para. 2.30.
280New Zealand's appellee's submission, para. 2.28.

169. The question before us, therefore, is whet her the 16 measures individually constitute SPS
measures, or whether they constitute SPS measures on ly when taken as a whole or grouped together.
To answer this question, we first consider th e proper interpretation of the relevant text of
Annex A(1)(a) to the SPS Agreement in accordance with the custom ary rules of interpretation of
public international law. We then assess whet her the Panel misinterpreted or misapplied the
definition of an SPS measure in Annex A(1)(a).
A. Interpretation of Annex A(1) to the SPS Agreement
170. A unique feature of the SPS Agreement is that it defines the measures that are subject to its
disciplines. Annex A(1) to the SPS Agreement provides that an SPS measure is defined as follows:
ANNEX A
DEFINITIONS
1. Sanitary or phytosanitary measure - Any measure applied:
(a) to protect animal or plant life or health within the territory of
the Member from risks arising from the entry, establishment or
spread of pests, diseases, disease-carrying organisms or disease-
causing organisms;
(b) to protect human or animal life or health within the territory
of the Member from risks arisi ng from additives, contaminants,
toxins or disease-causing orga nisms in foods, beverages or
feedstuffs;
(c) to protect human life or health within the territory of the
Member from risks arising from diseases carried by animals, plants
or products thereof, or from the entry, establishment or spread of
pests; or
(d) to prevent or limit other damage within the territory of the
Member from the entry, establishment or spread of pests.
Sanitary or phytosanitary measures include all relevant laws, decrees,
regulations, requirements and procedures including, inter alia , end
product criteria; processes and production methods; testing,
inspection, certification and approval procedures; quarantine
treatments including relevant requirements associated with the
transport of animals or plants, or with the materials necessary for
their survival during transport; provisions on relevant statistical
methods, sampling procedures and me thods of risk assessment; and
packaging and labelling requirements di rectly related to food safety.
(footnote omitted)

171. Although Annex A(1) refers to "any measure", neither the SPS Agreement nor the DSU
contains a definition of the term "measure". The concept of "measure", however, is a key concept for
dispute settlement and has been addressed by the Appe llate Body in several cases. Having regard to
Article 3.3 of the DSU, the Appellate Body has held that, in principle, any act or omission attributable
to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings.
The acts or omissions that are so attributable are, in the usual case, the acts or omissions of the organs
of the State.
281
172. A fundamental element of the definition of "SPS me asure" set out in Annex A(1) is that such
a measure must be one "applied to protect" at least one of the listed interests or "to prevent or limit"
specified damage. Subparagraph (a ) brings within the scope of th e definition measures applied to
protect animal or plant life or health within the Member's territory from specified risks related to pests
and diseases. The word "to" in adverbial relation with the infinitive verb "protect" indicates a purpose
or intention.282 Thus, it establishes a required link between the measure and the protected interest. In
that sense, the Appellate Body in Australia – Salmon referred to a Member's "appropriate level of
protection" and explained that this level is an objective, and that the SPS measure is an instrument
chosen to attain or implement that objective.283 We note, in addition, that the word "applied" points to
the application of the measure and, thus, suggests th at the relationship of the measure and one of the
objectives listed in Annex A(1) must be manifest in the measure itself or otherwise evident from the
circumstances related to the application of the meas ure. This suggests that the purpose of a measure
is to be ascertained on the basis of objective considerations.
284
173. We consider that the meaning that has been attr ibuted to the phrase "applied ... so as to afford
protection" in the context of Article III:1 of the GATT 1994 may provide some assistance to the
interpretative task before us.
285 The language of Annex A(1)(a) to the SPS Agreement is similar to
Article III:1 of the GATT 1994, to the extent that bot h provisions use the word "applied", and in both
provisions this word is followed by the infinitive of purpose, namely, "to protect" or "to afford
protection", respectively. With regard to Artic le III of the GATT 1994, the Appellate Body has
opined that, although the purpose of a measure is not easily ascertained, it can often be discerned from

281Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 81.
282Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 3280.
284See, to similar effect, Panel Report, EC – Approval and Marketing of Biotech Products, para. 7.2558.
285Whilst we are mindful that caution must be exercised when referring to similar words and phrases in
other provisions of the covered agreements for the purpose of determining the meaning of a particular word or
phrase (Appellate Body Report, EC – Asbestos , para. 89), we also note that, because Annex A(1) to the
SPS Agreement and Article III:1 of the GATT 1994 form part of the same treaty by virtue of Article II:2 of the
WTO Agreement, each constitutes context relevant to the interpretation of the other.

the measure's design, architecture, and structure. 286 A similar approach is called for under
Annex A(1)(a) to the SPS Agreement. Whether a measure is "applie d ... to protect" in the sense of
Annex A(1)(a) must be ascertained not only from the objectives of the measure as expressed by the
responding party, but also from the text and st ructure of the relevant measure, its surrounding
regulatory context, and the way in which it is desi gned and applied. For any given measure to fall
within the scope of Annex A(1)(a), scrutiny of su ch circumstances must reveal a clear and objective
relationship between that measure and the specific purposes enumerated in Annex A(1)(a).
174. We now turn to the last sentence of Annex A(1), which provides:
Sanitary or phytosanitary measures include all relevant laws, decrees,
regulations, requirements and procedures including, inter alia , end
product criteria; processes and production methods; testing,
inspection, certification and approval procedures; quarantine
treatments including relevant requirements associated with the
transport of animals or plants, or with the materials necessary for
their survival during transport; provisions on relevant statistical
methods, sampling procedures and me thods of risk assessment; and
packaging and labelling requirements directly related to food safety.
175. We note that this last sentence of Annex A(1) fo llows, and relates to, all of the first sentence,
including all of the purposes enumer ated in subparagraphs (a) through (d). The first part of this
sentence contains a list of legal instruments linked by the conjunction "and" ("laws, decrees,
regulations, requirements and procedures"). This li st is modified by the words "include" and "all
relevant". The word "relevant" is, in our view, a ke y element within this sentence. We see "relevant"
as a reference back to the preceding sentence in Anne x A(1), that is, to the list of specific purposes
that are the defining characteristic of every SPS measure. The words "include" and "all", which also
introduce the list of instruments, suggest that th e list is both illustrative and expansive. Taken
together, the words "include" and "all relevant" therefore suggest that measures of a type not
expressly listed may nevertheless constitute SPS measu res when they are "relevant", that is, when
they are "applied" for a purpose that corresponds to one of those listed in subparagraphs (a)
through (d). Conversely, the fact that an instru ment is of a type listed in the last sentence of
Annex A(1) is not, in itself, sufficient to brin g such an instrument within the ambit of the
SPS Agreement.
176. Turning to the second part of the last sentence, we note that this provision introduces a list of
instruments with the words "including, inter alia ". The use of both "including" and " inter alia "

286Appellate Body Report, Japan – Alcoholic Beverages II, p. 29, DSR 1996:I, 97, at 120.

emphasizes that the list is only indicative.
287 The list itself covers a broad range of measures that are
identified with varying degrees of specificity. To us , it is a list of examples of measures that may fall
within the definition of an SPS measure, provided always that the measure manifests a clear and
objective relationship with (is "applied" for) at least one of the purposes set out in subparagraphs (a)
through (d). The list thus serves to illustrate, through a set of concrete examples, the different types of
measures that, when they exhibit the appropriate nexus to one of the specified purposes, will
constitute SPS measures and, accordingly, be subject to the disciplines set out in the SPS Agreement.
B. Application of Annex A(1) to the Measures at Issue
177. With these considerations in mind, we turn to the particularities of Australia's appeal.
Australia alleges that the Panel's finding that the 16 measures individually meet the requirements of
Annex A(1) was in error because the Panel did not properly apply the requirements of Annex A(1) to
each measure individually.
178. We recall that the Panel based its conclusion on two elements. First, the Panel assessed the
purpose of the measures. It observed that Australia's Quarantine Act 1908 , which constitutes the
legislative basis for the IRA and, thus, for the 16 measures at issue, defin es quarantine measures as
"having as their object the prevention or control of the introduction, establishment and spread of
diseases or pests that will or could cause significant damage to human beings, animals, plants, other
aspects of the environment or economic activities". 288 The Panel also referred to a section of the IRA
providing that the purpose of the measures is to prot ect the health of people, animals, and plants. 289
The Panel then concluded that, because the 16 measu res are spelt out in the IRA, each of them
pursues these general objectives 290 and is therefore related to risks arising from the entry,
establishment and spread of pests, in the sense of subparagraph (a) of Annex A(1) to the
SPS Agreement.291 In addition, the Panel identified the purpose of each of the individual measures, as
set out in the IRA, and found a "close linkage" 292 between those purposes and managing risks.
Second, the Panel analyzed whether the 16 measures fell within the list of examples of SPS measures
set out in the last sentence of Annex A(1). The Panel found that each of the 16 measures prescribes a

287We recall, in this connection, the Appell ate Body's consideration of the term " inter alia " in
Article 2.2 of the Agreement on Technical Barriers to Trade in EC – Sardines. Referring to the third sentence
of that provision, which sets out a list introduced by the phrase "[s]uch legitimate objectives are, inter alia:", the
Appellate Body considered that the use of the term " inter alia" indicated that the objectives covered by the term
"legitimate objectives" extend beyond the objectives specifically mentioned in Article 2.2. (Appellate Body
Report, EC – Sardines, para. 286)
288Subsection 4(1) of the Quarantine Act 1908, as quoted in IRA, Part B, p. 1. (footnote omitted)
289Panel Report, para. 7.127 (quoting IRA, Part B, p. 5; and Import Risk Assessment Handbook
(Biosecurity Australia, 2003) (Panel Exhibit AUS-10), p. 5).
290Panel Report, para. 7.129.
291Panel Report, para. 7.139.
292Panel Report, para. 7.141.

particular way of doing something that needs to be followed if New Zealand apples are to be imported
into Australia.293 The Panel classified the 16 measures as regulations, requirements, or procedures.
Consequently, the Panel concluded that the 16 measu res, both as a whole and individually, constitute
SPS measures in the sense of Annex A(1) to the SPS Agreement.294
179. We see no merit in Australia's allegation that the Panel failed to assess whether
the 16 measures at issue individually meet the requirements of Annex A(1). It is correct that the Panel
inferred that "[s]ince the 16 measures are spelt out in the IRA, each of them pursues the [same]
general objectives [as the IRA]".295 However, as we see it, the Panel' s analysis was not limited to this
finding. The Panel also assessed the purpose of the various measures individually, as spelt out in the
IRA. In paragraph 7.141 of its Report, the Panel reviewed the measures individually and analyzed the
purpose of each measure or small subset of measure s. The Panel noted, for instance, that, according
to the explanations in the IRA, Measures 2 to 5 are concerned with "risk reduction", Measure 6 relates
to "mitigat[ing] the risk of fire blight", and th e stated purpose of Measure 7 is "[p]revention of
contamination".296 As we see it, the Panel considered that this disaggregated analysis provided further
support for its conclusion that the 16 measures at i ssue are related to risks arising from the entry,
establishment and spread of pests, in the sense of A nnex A(1)(a). We are therefore of the view that,
contrary to what Australia alleges, the Panel di d indeed assess whether the 16 measures at issue
individually meet the requirements of Annex A(1) to the SPS Agreement.
180. Australia further contends that the individua l measures are not SPS measures because they do
not require "some action or course of action (inclu ding an identifiable omission) that a Member may
put into practical operation for the purpose of protecting against some relevant risk." 297 Australia
maintains that activities or requirements, such as ad ministrative processes or procedures that have no
operation other than to enhance the efficacy of some active mechanism for protecting animal or plant
life or health from risk, should not be identified as separate SPS measures, but instead as ancillary
requirements. Australia submits that ancillary re quirements and the principal measures to which they
relate should be identified collectively as amounting to a "single composite or enhanced SPS
measure".
298 Australia illustrates this point by referring to what New Zealand identified as Measure 3.
This "measure" requires that an orchard inspec tion methodology be developed and approved that
addresses issues such as: visibility of symptoms in the tops of trees; the inspection time required and
the number of trees to be inspected to meet the efficacy level; and training and certification of

293Panel Report, para. 7.163.
294Panel Report, para. 7.172.
295Panel Report, para. 7.129.
296Panel Report, para. 7.141 (quoting IRA, Part B, p. 318).

inspectors.
299 Australia argues that, taken alone, this requirement would be meaningless and
ineffective for achieving any protection from risk, and that it would only have meaning insofar as it is
ancillary to the principal measure requiring that apples be sourced from areas free from fire blight
disease symptoms.
181. We see no support in the text of Annex A(1) to the SPS Agreement for the distinction between
"ancillary" and "principal" measures proposed by Aust ralia. That provision refers to "any measure";
it does not distinguish between ancillary measures and principal measures or contain the notion of
"composite" or "enhanced" SPS measures. As we have set out above, the Appellate Body has
interpreted the word "measure" in a broad sense, an d rejected the notion that only certain types of
measures could be challenged in dispute settlement proceedings.300 Nothing in the text of Annex A(1)
suggests a more restrictive interpretation of the word "measure" in the context of the SPS Agreement.
In addition, the Appellate Body has held that the pa rties, and, in particular, the complainant, and the
panel enjoy a certain latitude in defining the relevant measure. 301 Furthermore, the last sentence of
Annex A(1) refers to laws, decrees, regulations, re quirements, and procedures in general, without in
any respect limiting the scope of these instruments or carving out particular types of measures. We
note that Australia does not object to the Panel' s classification of the "measures" identified by
New Zealand as regulations, requirements, or pro cedures. In fact, Australia itself calls them
"[a]ctivities or requirements, such as administrative processes or procedures".302
182. Finally, Australia argues that its reading of the definition of an SPS measure in Annex A(1)
would be consistent with the definition of the term "phytosanitary measure" in the Glossary of
Phytosanitary Terms contained in ISPM No. 5 303, and endorses the distinction that the glossary draws
between a "phytosanitary measure" and a "phytosanitary procedure". 304 Australia does not explain
whether or how it considers these definitions to be relevant to an interpreta tion of Annex A(1)(a) to
the SPS Agreement, other than to point out that its suggested interpretation of Annex A(1)(a) would be
consistent with these definitions. We recall that the Panel found that the SPS Agreement contains "no
such distinction between phytosanitary measures, actions and procedures". 305 We agree with the
Panel and we consider that the answer to th e question of whether ISPM No. 5 categorizes

300Appellate Body Report, US – Corrosion-Resistant Steel Sunset Review, para. 88.
301See Appellate Body Report, Brazil – Retreaded Tyres , paras. 123-127. Such latitude may
nevertheless be circumscribed when, as in EC – Asbestos , undue atomization of a measure would affect the
applicability of relevant disciplines and/or may affect the substance of a panel's findings. (Appellate Body
Report, EC – Asbestos , paras. 63-65) Yet Australia does not allege, and we do not see, that this would be the
case in the present dispute.
303See supra, footnote 45 of this Report.
305Panel Report, para. 7.182.

Australia's 16 requirements as measures or procedures does not answer the question of whether or not
these 16 requirements are measures falling within the scope of Annex A(1) to the SPS Agreement.
183. We have found that, contrary to what Aust ralia alleges, the Panel did assess whether
the 16 measures at issue individually meet the requirements of Annex A(1) to the SPS Agreement and
we have rejected the distinction between ancillary and principal measures proposed by Australia. We,
therefore, see no error in the Panel's finding th at the 16 measures at issue, both as a whole and
individually, constitute SPS measures within the meaning of Annex A(1) and are covered by the SPS
Agreement.
C. Conclusion
184. Accordingly, we uphold the Panel's finding, in paragraphs 7.172 and 8.1(b) of the Panel
Report, that the 16 measures at issue, both as a whole and individually, constitute SPS measures
within the meaning of Annex A(1) to the SPS Agreement.
VI. Articles 5.1, 5.2, and 2.2 of the SPS Agreement
185. We turn next to Australia's appeal of the Pa nel's findings that Australia's SPS measures at
issue regarding fire blight and ALCM, as well as the "general" measures linked to these pests, are
inconsistent with Articles 5.1 and 5.2 of the SPS Agreement and, by implication, also inconsistent
with Article 2.2 of the SPS Agreement. We first provide a brief overview of the IRA's structure and
reasoning followed by a summary of the relevant Pa nel findings. This is followed by an overview of
the claims and arguments raised on appeal. We then analyze the specific issues raised by Australia's
appeal against the Panel findings under Articles 5.1, 5.2, and 2.2 of the SPS Agreement. Finally, we
set out our conclusion.
A. IRA Structure and Panel Findings
186. The Panel found that Australia's SPS measures regarding fire blight and ALCM, as well as the
"general" measures linked to these pests, are in consistent with Articles 5.1 and 5.2 of the
SPS Agreement, and, by implication, with Article 2.2 of the SPS Agreement.
306
187. The Panel reached these conclusions having found that, with respect to the analysis of the
likelihood of entry, establishment and spread of fire blight and of ALCM, and of the potential
consequences associated with the entry, establishment or spread of these pests in Australia, the IRA
was not a proper risk assessment within the meaning of Article 5.1 and Annex A(4) to the

306Panel Report, paras. 7.906 and 8.1(c). See also paras. 7.472, 7.510, 7.887, and 7.905.

SPS Agreement, and that the flaws that the Panel had f ound in the IRA also constituted a failure,
under Article 5.2 of the SPS Agreement, to take adequately into account factors such as the available
scientific evidence, the relevant processes and production methods in New Zealand and Australia, and
the actual prevalence of fire blight and viable ALCM.
307
188. As explained supra, in subsection IV.C of this Report, in respect of fire blight and ALCM, the
IRA included pest risk assessments for the importa tion of mature apple fruit free of trash, either
packed or sorted and graded from New Zealand. The IRA combined a quantitative assessment of
entry (importation, proximity, exposure), estab lishment and spread factors with a qualitative
assessment of the potential biological and econom ic consequences associat ed with the entry,
establishment and spread of the pests at issu e. The IRA assigned quantitative values to the
probabilities under the different importation steps 308 and establishment and spread factors and then
aggregated and combined these probabilities to dete rmine an overall value for the annual probability
of entry, establishment and spread. This overall quantitative value was converted into a qualitative
likelihood rating, based on the IRA's own "nomencl ature", and this likelihood rating was combined
with a qualitative assessment of the pote ntial biological and economic consequences 309 in the IRA's
"risk estimation matrix" to yield an overall determination of the "unrestricted risk".310
189. In the various quantitative steps of its analysis, the IRA assigned numeric point estimates or
probability ranges, based on the scientific evidence it reviewed. In situations that, according to the
IRA team, presented scientific uncertainty, conclu sions were reached and a quantitative value was
assigned through the exercise of IRA expert judgemen t. Probability values were assigned based on
mathematical distribution models. Pert and triang ular distribution were u sed to assign "most likely
values". Uniform distribution was used and the me an value was assigned when there was not enough
information to determine a "most likely value".
190. In assessing New Zealand's claims under Articles 5.1 and 5.2 of the SPS Agreement with
respect to fire blight, the Panel reviewed the IR A's analysis of: (i) the eight importation steps;

307Panel Report, paras. 7.471, 7.886, and 7.904. With respect to ALCM, the Panel also referred to the
IRA's failure to adequately take into account relevant environmental conditions.
308Eight importation steps are combined in ten different importation scenarios as to how an apple may
become infected or infested during the process of importation into Australia. (Supra, para. 138 of this Report)
309The IRA assigned qualitative impact scores to specified direct and indirect criteria to determine the
potential biological and economic consequences of fire blight and ALCM. These impact scores were combined
to determine the overall rating assigned to the po tential biological and economic consequences. ( Supra,
para. 144 of this Report)

(ii) proximity311; (iii) exposure 312; (iv) establishment; (v) spread; and (vi) associated potential
biological and economic consequences; and also examined (vii) certain alleged methodological flaws
in the IRA.
191. On four out of eight importation steps, the Panel concluded that:
... the IRA's estimation that Erwinia amylovora will be always
present in the source orchards in [N]ew Zealand (importation step 1);
that fruit coming from an infected or infested orchard is infected or
infested with Erwinia amylovora (importation step 2); that clean
fruit from infected or infested orchards is contaminated with Erwinia
amylovora during picking and transport to the packing house
(importation step 3); and that clean fruit is contaminated by Erwinia
amylovora during processing in the packing house (importation
step 5); do not find sufficient support in the scientific evidence relied
upon and, accordingly, are not coherent and objective.
313
192. The Panel observed that the IRA calculated the overall probability of importation as a sum of
the probabilities associated with ten individual im portation scenarios and did not provide any separate
justification or evidence regarding the estimated overall likelihood of importation. In the light of
these findings, the Panel noted, but did not decide, the issue of whether this methodology was flawed
in and of itself. The Panel reasoned that if, unde r such methodology, the estimations of one or more
of the individual likelihoods are questionable, then the overall figure necessarily becomes
questionable.314 Because the Panel found that some of th e individual likelihoods were flawed, it
determined that the IRA's estimation of the ove rall probability of importation was not supported by
adequate scientific evidence and, accordingly, was not coherent and objective.315
193. With respect to fire blight, the Panel also found that a significant part of the IRA's analysis of
exposure, establishment and spread was based on a number of assumptions and qualifications that
were not convincing, leading to reasonable dou bts about the evaluation made by the risk assessor. 316
The Panel, therefore, concluded that the reasoning articulated in the IRA with respect to the likelihood
of entry, establishment and spread of fire blight , including the IRA's estimation of the values for the

311Proximity is the likelihood that major handlers and users of apples (utility points) would be located
sufficiently close to susceptible host plants (exposure groups) for the transfer of pests from imported apples to
host plants to take place. (Supra, paras. 137 and 139 of this Report)
312Exposure is the likelihood of transfer of a pest from an infected ap ple to a susceptible host plant.
(Supra, paras. 137 and 140 of this Report)
313Panel Report, para. 7.447.
314Panel Report, para. 7.355.
315Panel Report, para. 7.447.
316Panel Report, para. 7.448.

respective probabilities, did not rely on adequate scientific evidence and, accordingly, was not
coherent and objective.
317
194. Regarding the potential biological and economic consequences associated with fire blight, the
Panel discussed certain testimony of its appointed experts, including that it is impossible to predict the
economic consequences of the introduction of fire blight into a new area and that the IRA has a
tendency to overestimate the severity of the consequen ces of fire blight in certain aspects. The Panel,
therefore, found that the IRA's evaluation of the po tential consequences associ ated with the entry,
establishment or spread of fire blight into Australia did not rely on adequate scientific evidence and,
accordingly, was not coherent and objective.318
195. In the light of the above, the Panel found that, with respect to its analysis of the fire blight
risk, the "IRA is not a proper risk assessment with in the meaning of Article 5.1 and paragraph 4 of
Annex A to the SPS Agreement". 319 The Panel also found that the IRA contained certain
methodological flaws that magnified the risk assessed and was, for that reason too, not a proper risk
assessment within the meaning of Article 5.1 of the SPS Agreement.320 The Panel found, accordingly,
that Australia's requirements rega rding fire blight on New Zeala nd apples are inconsistent with
Articles 5.1, 5.2, and 2.2 of the SPS Agreement.321
196. With respect to ALCM, in ass essing New Zealand's claims under Articles 5.1 and 5.2 of the
SPS Agreement, the Panel reviewed the IRA's analysis of: (i) the viability of ALCM cocoons; (ii) the
effects of parasitism on ALCM viability; (iii) the ALCM flight range; (iv) the period of emergence
of ALCM; (v) the climatic conditions for the spread of ALCM in Australia; and (vi) the mode of
trade. The Panel found that the IRA's reasoning was not objective and coherent in respect of a
number of these factors, which could have a major impact on the assessment of this particular risk, in
particular: the viability of ALCM in occupied cocoons; the impact of parasitism on cocoon
occupancy; the protracted period of emergence of ALCM adults relative to their short lifespan, which
diminishes the chances of mating; the climatic c onditions for the establishment and spread of ALCM
in Australia; and the likely mode of trade.
322 The Panel found that, cumulatively, the IRA's failure to
take these factors into account was enough to creat e reasonable doubts about the risk assessment with
respect to its evaluation of the likelihood of entr y, establishment and spread of ALCM. The Panel,
therefore, concluded that due to these flaws, the IRA's analysis of the likelihood of entry,

317Panel Report, para. 7.448.
318Panel Report, para. 7.470.
319Panel Report, para. 7.471.
320Panel Report, para. 7.510.
321Panel Report, paras. 7.472 and 7.510.
322Panel Report, para. 7.870.

establishment and spread of ALCM could not be found to be supported by coherent reasoning and
sufficient scientific evidence and thus was not objectively justifiable.323
197. The Panel found that the IRA had a tendency to overestimate the severity of the consequences
of ALCM in certain aspects, and that it did not ad equately consider the existence of the climatic
conditions necessary for the establishment and spread of ALCM in Australia. The Panel, therefore,
concluded that the IRA's evaluation of the pot ential consequences associated with the entry,
establishment or spread of ALCM into Australia di d not rely on adequate scientific evidence and,
accordingly, was not coherent and objective.324
198. In the light of the above, the Panel found that, w ith respect to its analysis of the ALCM risk,
the IRA is not a proper risk assessment within th e meaning of Article 5.1 and Annex A(4) to the
SPS Agreement325, and found, accordingly, th at Australia's inspection and treatment requirements
regarding ALCM on New Zealand apples are inconsis tent with Articles 5.1, 5.2, and 2.2 of the
SPS Agreement.326
199. With respect to the general measures, the Pane l also found that the IRA is not a proper risk
assessment, "[c]onsidering the link in the IRA betw een the 'general' measures ... and the specific
requirements regarding fire blight ... and ALCM, as well as the lack of any separate justification for
these 'general' measure s in the IRA ...". 327 Thus, the Panel found that these measures, too, are
inconsistent with Articles 5.1 and 5.2 and, by implication, Article 2.2 of the SPS Agreement.328
B. Claims of Error and Arguments on Appeal
200. On appeal, Australia argues that the Panel erre d in its interpretation of Article 5.1 of the
SPS Agreement and misapplied the criteria elaborated by the Appellate Body in US/Canada –
Continued Suspension for a panel's review of a risk assessment under Article 5.1 of the
SPS Agreement.
201. Australia claims that the Panel erred in its re view of the IRA both for fire blight and ALCM,
because it misapplied the standards of scientific "sufficiency" 329 and "objectivity and coherence". 330
According to Australia, as regards the IRA's inte rmediate conclusions, the Panel should have asked

323Panel Report, para. 7.871.
324Panel Report, para. 7.885.
325Panel Report, para. 7.886.
326Panel Report, para. 7.887.
327Panel Report, para. 7.904.
328Panel Report, para. 7.905.
330Australia's appellant's submission, paras. 93 and 103.

only whether they were "within a range that could be considered legitimate by the standards of the
scientific community".
331 Australia adds that the standard of objectivity and coherence set out in
paragraph 591 of the Appellate Body reports in US/Canada – Continued Suspension applies only to
"the particular conclusion ultimately r eached" by a Member assessing the risk. 332 Australia also
claims that the Panel wrongly required the IRA to contain an explanation of precisely how the IRA
team reached the expert judgements it made at intermediate steps in the IRA333 and failed to assess the
materiality of the faults it found with par ticular expert judgements made in the IRA. 334 Australia
claims that these legal errors undermine the Panel's analysis of certain importation steps, exposure,
establishment and spread, as well as of the associated potential biological and economic consequences
of fire blight and ALCM.
335 At the oral hearing, Australia confirmed that its appeal of the Panel's
findings on the general measures depends on its appeal of the pest-specific measures and that we must
rule on the general measures in the same way as we rule on the pest-specific measures.
202. New Zealand responds that Australia's two main assertions, that the standard of objectivity
and coherence in US/Canada – Continued Suspension should apply "only to 'conclusions ultimately
reached'", and that a panel should review only whether expert judgements fall "within a range
considered legitimate by the standards of the scien tific community", are "designed to shelter the IRA
from effective review".336 New Zealand argues that the criteria identified in US/Canada – Continued
Suspension—that reasoning in a risk assessment be "obj ective and coherent" and that "conclusions
drawn find sufficient support in the scientific ev idence"—apply equally to reasoning and conclusions
that are based in part on the application of expert judgement.337 New Zealand also contests Australia's
assertions that the Panel imposed an unduly onerous duty of explanation on the IRA in connection
with its use of expert judgement , and failed to assess the materia lity of the flaws in the IRA.
According to New Zealand, these assertions are "based on a misreading of the Panel Report".338
203. Before reviewing Australia's claims that the Panel erred in its interpretation and application of
Articles 5.1, 5.2, and 2.2 of the SPS Agreement , we consider the meaning and content of the
obligations set out in these provisions.

332Australia's appellant's submission, paras. 76 and 77.
333Australia's appellant's submission, paras. 96 and 97.
334Australia's appellant's submission, paras. 84-90 and 122.
335Australia's appellant's submission, paras. 100-123.
336New Zealand's appellee's submission, paras. 2.39 and 2.40 (quoting Australia's appellant's
submission, paras. 76 and 77).
337New Zealand's appellee's submission, paras. 2.44 and 2.45.
338New Zealand's appellee's submission, para. 2.40.

C. The Panel's Assessment of the IRA
1. Articles 5.1, 5.2, and 2.2 of the SPS Agreement
204. Article 5.1 of the SPS Agreement requires that sanitary or phytosanitary measures be based on
a "risk assessment". Article 5.1 provides that:
Members shall ensure that their sanitary or phytosanitary measures
are based on an assessment, as appropriate to the circumstances, of
the risks to human, animal or plan t life or health, taking into account
risk assessment techniques develope d by the relevant international
organizations.
205. "Risk assessment" for pests is defined in Annex A(4) to the SPS Agreement as:
[t]he evaluation of the likelihood of entry, establishment or spread of
a pest or disease within the territory of an importing Member
according to the sanitary or phytosanitary measures which might be
applied, and of the associated potential biological and economic
consequences; ...
206. Article 5.2 of the SPS Agreement contains a list of factors that must be taken into account in a
risk assessment:
In the assessment of risk s, Members shall take into account available
scientific evidence; relevant processes and production methods;
relevant inspection, sampling and testing methods; prevalence of
specific diseases or pests; existen ce of pest- or disease-free areas;
relevant ecological and environmen tal conditions; and quarantine or
other treatment.
207. Science plays a central role in risk assessment a nd, therefore, 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".
339 Moreover, the list of factors that Members shall take
into account in a risk assessment set out in Article 5.2 is not a "closed list" 340, and it does not a priori
exclude factors that are not susceptible of quantita tive analysis by the empirical or experimental
laboratory methods commonly associated with the physical sciences.
208. Thus, Article 5.2 requires a risk assessor to take into account the available scientific evidence,
together with other factors. Whether a risk asses sor has taken into account the available scientific
evidence in accordance with Article 5.2 of the SPS Agreement and whether its risk assessment is a
proper risk assessment within the meaning of Artic le 5.1 and Annex A(4) mu st be determined by

339Appellate Body Reports, US/Canada – Continued Suspension , para. 527 (quoting Appellate Body
Report, EC – Hormones, para. 187).

assessing the relationship between the conclusions of the risk assessor and the relevant available
scientific evidence.
209. In EC – Hormones , the Appellate Body clarified that Artic le 5.1 is a "specific application of
the basic obligations contained in Article 2.2 of the SPS Agreement" and that "Articles 2.2 and 5.1
should constantly be read together".
341 Article 2.2 focuses on the need for an SPS measure to be
based on scientific principles and sufficient scientific evidence. It provides:
Members shall ensure that any sanita ry or phytosanitary measure is
applied only to the extent necessary to protect human, animal or plant
life or health, is based on scientific principles and is not maintained
without sufficient scientific evid ence, except as provided for in
paragraph 7 of Article 5.
210. We observe that, in its decisions under Articles 2.2 and 5.1 of the SPS Agreement , the
Appellate Body has identified the role of a panel assessing compliance with these provisions as an
inquiry into whether there is a "rational or obj ective relationship" between the SPS measures and the
scientific evidence and between the SPS measures and the risk assessment.342
211. The standard of review in proceedings under the SPS Agreement "must reflect the balance
established in that Agreement between the jurisdictional competences conceded by the Members to the
WTO and the jurisdictional competences retained by the Members for themselves".
343 The applicable
standard of review is set out in Article 11 of the DSU, which states in relevant part:
[A] panel should make an objective assessment of the matter before
it, including an objective assessment of the facts of the case and the
applicability of and conformity with the relevant covered
agreements ... .
212. In EC – Hormones , the Appellate Body clarified that this standard of review requires that a
panel reviewing a risk assessment under Article 5.1 of the SPS Agreement neither undertake a de novo
review, nor give "total deference" to the risk assessment it reviews.
344
213. In US/Canada – Continued Suspension , the Appellate Body further clarified the standard of
review that applies to a panel reviewing the co nformity of a measure with Article 5.1 of the

341Appellate Body Report, EC – Hormones , para. 180. The Appellate Body also clarified that "[t]he
requirement that an SPS measure be 'b ased on' a risk assessment is a subs tantive requirement that there be a
rational relationship between the measure and the risk assessment". (Ibid., para. 193)
342In Japan – Agricultural Products II, the Appellate Body stated that "the obligation in Article 2.2 that
an SPS measure not be maintained with out sufficient scientific evidence re quires that there be a rational or
objective relationship between the SPS measure and th e scientific evidence". (Appellate Body Report, Japan –
Agricultural Products II, para. 84) See also Appellate Body Report, Japan – Apples, paras. 162 and 163.

SPS Agreement. The Appellate Body stated that, under this provision, a panel's task is to review a
WTO Member's risk assessment and not to substitute its own scientific judgement for that of the risk
assessor. A panel should not, therefore, determine whether the risk assessment is correct, but rather
"determine whether that risk assessment is supporte d by coherent reasoning and respectable scientific
evidence and is, in this sense, objectively justifiable".345
214. More specifically, at paragraph 591 of its reports in US/Canada – Continued Suspension , the
Appellate Body stated that, with respect to the scientific basis underlying an SPS measure, a panel
should verify whether it "comes from a respected and qualified source" and has "the necessary
scientific and methodological rigour to be consider ed reputable science". The Appellate Body
explained that, "while the correctness of the view s need not have been accepted by the broader
scientific community, the views must be consider ed to be legitimate sc ience according to the
standards of the relevant scientific community." With respect to the reasoning of the risk assessor, the
Appellate Body observed in the same paragraph of the US/Canada – Continued Suspension reports
that:
[a] panel should also assess whether the reasoning articulated on the
basis of the scientific evidence is objective and coherent. In other
words, a panel should review whether the particular conclusions
drawn by the Member assessing the risk find sufficient support in the
scientific evidence relied upon.
215. Thus, in its discussion of the standard of revi ew that applies to a panel reviewing a risk
assessment under Article 5.1 of the SPS Agreement, the Appellate Body identified two aspects of a
panel's scrutiny of a risk assessment, namely, scr utiny of the underlying scientific basis and scrutiny
of the reasoning of the risk assessor based upon such underlying science. With respect to the first
aspect, the Appellate Body saw the panel's role as limited to reviewing whether the scientific basis
constitutes "legitimate science accord ing to the standards of the rele vant scientific community". The
Appellate Body perceived the second aspect of a panel's review as involving an assessment of
whether the reasoning of the risk assessor is objectiv e and coherent, that is, whether the conclusions
find sufficient support in the scientific eviden ce relied upon. Having done so, the panel must
determine whether the results of the risk asse ssment sufficiently warrant the challenged SPS
measures.
346 We consider that this reasoning of the Appe llate Body is consistent with the overarching
requirement in Article 2.2 and reflected in Articles 5.1 and 5.2 of the SPS Agreement that there be a
"rational or objective relationship" between the SPS measures and the scientific evidence.

345Appellate Body Reports, US/Canada – Continued Suspension, para. 590.
346Appellate Body Reports, US/Canada – Continued Suspension , para. 591 (referring to Appellate

216. In the light of the above, we review below Australia's claims that the Panel: (i) misinterpreted
and misapplied the standard of review applicable to its review of the IRA under Article 5.1 of the
SPS Agreement; (ii) erred in its assessment of the use of IRA expert judgement; and (iii) failed to
assess the materiality of the faults it found with the reasoning in the IRA.
2. The Standard of Review Used by the Panel in Its Review of the IRA under
Article 5.1 of the SPS Agreement
217. Australia claims that in finding that the in termediate conclusions in the IRA were not
supported by adequate or sufficient scientific eviden ce and were thus not objective and coherent, the
Panel misapplied the standard of review articulated by the Appellate Body in US/Canada – Continued
Suspension.347 Australia argues that the standard of re view applicable to intermediate expert
judgements made in the IRA in the light of scientific uncertainty "ought be no different from the
standard recognised in US/Canada – Continued Suspension ... as that required for the scientific
evidence itself: each need do no more than fall within a range that c ould be considered 'legitimate by
the standards of the scientific community'". 348 Australia further contends that the standard of
objectivity and coherence does not re late to the quality of reasoning per se, but to the quality of the
"particular conclusion ultimately reached".349
218. New Zealand responds that Australia's assertion that a panel should assess whether an
intermediate conclusion in a risk assessment is with in a range that could be considered legitimate by
the standards of the scientific community would est ablish a lower threshold for a panel reviewing a
risk assessment than the threshold cl arified by the Appellate Body in US/Canada – Continued
Suspension, and that such a lower threshold would elim inate the need to assess the link between the
scientific evidence and the conclusions reached in a risk assessment.350
219. We start by observing that, in US/Canada – Continued Suspension , the Appellate Body did
not set out a series of steps that a panel must mechanically follow in the evaluation of a risk
assessment under Article 5.1 of the SPS Agreement. Rather, the Appellate Body suggested a way for
a panel to verify the consistency of a risk assessment with Article 5.1 of the SPS Agreement that is
centred on the notion that the risk assessment should be evaluated in the light of the scientific
evidence on which it relies. In this respect, the reports in US/Canada – Continued Suspension
confirm the interpretation provided by the Appellate Body in its earlier decisions under Article 2.2 of
the SPS Agreement—that a panel should verify the existence of a "rational or objective relationship"

347Australia's appellant's submission, paras. 92 and 93.
349Australia's appellant's submission, paras. 76 and 77. See also para. 103.
350New Zealand's appellee's submission, paras. 2.61 and 2.62.

between the SPS measures and the risk assessment, on the one hand, and the scientific evidence, on
the other hand—and provides some practical guidance as to how this might be done. 351
220. As we have already observed, in US/Canada – Continued Suspension , the Appellate Body
identified two aspects of a panel's review of a risk assessment under Article 5.1 of the SPS Agreement:
(i) a determination that the scientific basis of the risk assessment comes from a respected and
qualified source and can accordingly be considered "legitimate science" according to the standards of
the relevant scientific community; and (ii) a determination that the reasoning of the risk assessor is
objective and coherent and that, therefore, its c onclusions find sufficient support in the underlying
scientific basis. A panel should first determine wh ether the scientific basis relied upon by the risk
assessor is "legitimate" before reviewing whether the reasoning and the conclusions of the risk
assessor that rely upon such a scientific basis are objective and coherent.
221. We note that the first aspect, the panel's review of the scientific basis of the risk assessment,
may be particularly relevant in cases where the im porting Member has relied on minority scientific
opinions in conducting a risk assessment. In such cases, the question whether such opinions
constitute "legitimate" science from respected and qua lified sources according to the standards of the
relevant scientific community may have greater pr ominence. In this appeal, we have not been
requested to decide whether the Panel properly assessed the underlying scientific basis that was used
by the IRA to support its reasoning and conclusions on the risks relating to fire blight and ALCM.
222. As far as the second aspect is concerned, the Pa nel found in several instances that the IRA's
conclusions were not objective and coherent because they exaggerated or overestimated certain risks
and consequences and did not find sufficient support in the scientific evidence relied upon. In this
respect, the Panel's approach to reviewing the IRA' s reasoning and conclusions is consistent with the
Appellate Body reports in US/Canada – Continued Suspension , as well as with its previous decisions
that have required panels to verify the existen ce of a rational or objective relationship between the
SPS measures and the risk assessment, on the one ha nd, and the scientific evidence, on the other
hand.352
223. We consider, therefore, that the Panel did not err in reviewing whether the IRA's intermediate
reasoning and conclusions were objective and cohe rent, that is, whether the conclusions found
sufficient support in the scientific evidence relied upon. We do not accept Australia's contention that
the Panel's analysis should have been limited to a simple review of wh ether the intermediate

351See Appellate Body Report, EC – Hormones , para. 193; Appellate Body Report, Japan –
Agricultural Products II, para. 84; and Appellate Body Report, Japan – Apples, para. 162.
352See Appellate Body Report, EC – Hormones , para. 193; Appellate Body Report, Japan –
Agricultural Products II, para. 84; and Appellate Body Report, Japan – Apples, para. 162.

conclusions reached by the IRA "fall within a rang e that could be considered legitimate by the
scientific community".
224. In our view, by arguing that the Panel's task in reviewing the IRA's in termediate conclusions
should be limited to ensuring that these "fall within a range that could be considered legitimate by the
scientific community", Australia is suggestin g that a panel should assess the reasoning and
conclusions reached by a risk asse ssor and the scientific evidence relied upon in the same way. We
observe, however, that a distinction should be drawn between, on the one hand, the scientific evidence
relied upon by the risk assessor and, on the other hand, the reasoning employed and the conclusions
reached by the risk assessor on the basis of that scient ific evidence. In this dispute, the scientific and
technical works reviewed in the IRA on fire blight and ALCM and on the analysis of risk fall within
the first category. In contrast, the IRA's reasoning, intermediate conclusions on the various steps and
factors, as well as its overall conclusions, fall within the second category, even where expert
judgement was exercised by the IRA to address allege d scientific uncertainty. As we consider further
below, when the exercise of expert judgement forms an integral part of the risk assessor's analysis,
then it should be subject to the same type of scrutiny by the panel as all other reasoning and
conclusions in the risk analysis.
225. In US/Canada – Continued Suspension , the Appellate Body considered that the manner of
scrutinizing the underlying scientific evidence differs from the manner of scrutinizing the reasoning of
the risk assessor. This is because a panel is not well suited to conduct scientific research and
assessments itself
 353, and should not substitute its judgement for that of a risk assessor. 354 A panel,
however, must be able to review whether the co nclusions of the risk assessor are based on the
scientific evidence relied upon and are, accordingly, objective and coherent. Whether or not the
requisite rational or objective relationship exists can only be ascertained through the examination of
how the scientific evidence is used and relied upon to reach particular conclusions. In this respect, the
reasoning employed by the risk assessor plays an im portant role in revealing whether or not such a
relationship exists.
226. Regarding the distinction Australia draws between "intermediate" conclusions and
conclusions "ultimately reached" in the IRA, we observe that in US/Canada – Continued Suspension
the Appellate Body did not make such a distincti on, but required a review of whether the reasoning
itself is "objective and coherent" so as to determine whether the " particular conclusions drawn by the
Member assessing the risk find sufficient s upport in the scientific evidence relied upon". 355 The

354Appellate Body Reports, US/Canada – Continued Suspension, para. 590.
355Appellate Body Reports, US/Canada – Continued Suspension, para. 591. (emphasis added)

Appellate Body did not reserve this test for the ultimate conclusions reached by the risk assessor. In
this respect, we observe that it is not possible to review the ultimate conclusions reached by the risk
assessor in isolation from the reasoning and the inte rmediate conclusions that lead up to them. A
panel needs to understand how certain conclusions were reached and thei r relationship with the
underlying scientific basis in order to be in a position to assess whether the requisite objective and
rational relationships between the science, the risk assessment, and the resulting SPS measures exist.
227. It is through the reasoning of the risk assessor that it should be possible to understand whether
the risk assessment is based on the scientific evidence and whether in turn the proposed SPS measures
are based on the scientific evidence and on the risk as sessment. This is also recognized by the ISPM
under the International Plant Protection Conventi on ("IPPC"). In particular, ISPM No. 2 and
ISPM No. 11 specify that the entire risk analys is process, including risk assessment, should be
sufficiently documented "so that when a review or a dispute arises, the sources of information and
rationale used in reaching the management decision can be clearly demonstrated".356
228. We further note that, in this case, the reasoni ng in the IRA is articulated on the basis of
importation steps and scenarios, along with establishment and spread factors, that are then aggregated
and combined to arrive at an overall probability of entry, establishment and spread. A similar
structure is used for the qualitative assessment of the potential biological and economic consequences.
No separate reasoning, however, is developed fo r the IRA's ultimate conclusions. According to
Australia, the relevant conclusions are the conclu sions on the assessment of risk contained in the
IRA's sections and tables on "unrestricted risk" and "restricted risk" for fire blight and ALCM. 357 The
Panel's analysis of the IRA follows the IRA's own structure and, therefore, consists of reviews of steps
and factors and the methodology by which they are a ggregated and combined. In so doing, the Panel
adhered to the standard of review applicable to a panel's review of a risk assessment under Article 5.1
of the SPS Agreement , which requires a panel to review the c onclusions of a risk assessor, not to
undertake its own risk assessment.
229. In these circumstances, if the Panel had b een prevented from assessing the objectivity and
coherence of the intermediate c onclusions and reasoning of the IRA, it would have been left with
virtually no basis upon which to assess the consistency of the IRA with Article 5.1 of the
SPS Agreement. The Panel was, therefore, correct to assess whether the IRA's intermediate

356ISPM No. 11, supra, footnote 195 of this Report, Section 4.1; see also ISPM No. 2, supra,
footnote 195 of this Report, Section 3.3.2. ISPM No. 11, together with ISPM No. 2, present the general
framework for conducting a pest risk assessment. (Panel Report, paras. 2.69 and 2.71)
357Australia's response to questioning by the Appellate Body at the oral hearing (referring to IRA,
Part B, Table 23, p. 104 (unrestricted risk for fire blight ); Table 31, p. 116 (restricted risk for fire blight);
Table 49, p. 187 (unrestricted risk for ALCM); and Table 56, p. 191 (restricted risk for ALCM)).

conclusions on the intermediate steps and factors were objective and coherent, considering that it was
at these intermediate steps that the IRA reasoned a nd explained the relationship between the scientific
evidence and its conclusions.
230. In the light of the above, we do not see that the Panel erred in its review of the IRA under the
applicable standard of review. In particular, we consider that the Panel correctly reviewed whether
the intermediate conclusions the IRA reached on the likelihood of importation, on the likelihood of
entry, establishment and spread, and on the poten tial biological and economic consequences of fire
blight and ALCM, found sufficient support in the scientific evidence and were, accordingly, objective
and coherent.
231. For the reasons explained above, we dismiss Australia's claim that the Panel erred in
reviewing whether the IRA's conclusions in respect of fire blight on importation steps 1, 2, 3, 5, and 7,
exposure, establishment, spread, and potential biol ogical and economic consequences were objective
and coherent, and whether the IR A's methodology was objective and coherent, rather than asking
whether these "intermediate" conclusions were "wit hin a range that could be considered legitimate"
according to the standards of the scientific community.
358 For the same reasons, we also dismiss
Australia's claim that the Panel erred in reviewing whether the IRA's conclusions in respect of ALCM
on importation, establishment, spread, and potent ial biological and economic consequences were
objective and coherent rather than "within a range th at could be considered legitimate" according to
the standards of the scientific community.359
3. The Panel's Assessment of the Use of IRA Expert Judgement
232. Australia also appeals the Panel's evaluation of the use of IRA expert judgement to reach
conclusions regarding several intermediate steps and factors in the risk assessment. In this respect, we
recall that the IRA team exercised this judgement in situations where it determined that there was
scientific uncertainty.360 Australia explained to the Panel that this IRA expert judgement was "used
when there [was] limited eviden ce or where the underlying biological process is naturally highly
variable".361

358Australia's appellant's submission, paras. 103, 105, 107, and 113. See also paras. 13, 77, 78, 93,
and 95.
359Australia's appellant's submission, paras. 118 and 122. See also paras. 13, 77, 78, 93, and 95.
360Australia confirmed at the oral hearing that expe rt judgement in the IRA was exercised collectively
by the six members of the IRA team. For instance, on proximity for ALCM, the IRA explicitly states that "[t]he
estimated likelihoods were determined by expert judgement taking into consideration relevant stakeholder
comments". (See IRA, Part B, p. 167) In several other instances regarding fire blight and ALCM, the IRA
reached conclusions based on IRA expert judgement, although it did not explicitly refer to "expert judgement".
361Panel Report, para. 7.438 (quoting Australia's respon se to Panel Question 30 after the first Panel
meeting). See also paras. 7.433 and 7.746; and IRA, Part B, p. 167.

233. The Panel expressed a number of concerns with respect to the use of IRA expert judgement
throughout the IRA to estimate the probability of entry, establishment and spread of fire blight. The
Panel found that little informati on was provided in the IRA on how the extensive discussion and
review of different factors associated with the entry, establishment and spread was then translated into
quantitative estimates.362 The Panel reasoned that, while "expert judgement may be an important tool
for the risk assessor, it is not a substitute for sci entific data, especially for the purpose of estimating
the likelihood of entry, establishment and spread of a pest". 363 According to the Panel, Australia was
required, but failed, to demonstrate that the ex ercise of IRA expert judgement was documented,
transparent, and based on the relevant reliable scientific information, even when such information was
limited.364
234. Australia claims that the phrase "as appropriate to the circumstances" in Article 5.1 of the
SPS Agreement provides a measure of flexibility in terms of how a risk assessment is conducted when
there is little available scientific evidence. 365 Australia also argues that the Panel erred in requiring
that the IRA explain precisely how the IRA expert j udgement was reached at intermediate steps in the
IRA. In Australia's view, no such obligation exists in Article 5.1 of the SPS Agreement.366
235. New Zealand responds that the phrase "as appropria te to the circumstances" in Article 5.1
provides for some flexibility regarding the nature of a risk assessment, but does not allow deviation
from the substantive obligations un der Article 5.1. New Zealand c ontends the Panel did not require
Australia to explain how each expert judgement w as reached. Rather, according to New Zealand, the
Panel correctly rejected the concep t that the mere recourse to expert judgement requires a panel to
disregard the criteria elaborated in US/Canada – Continued Suspension and uphold the conclusions
reached through that expert judgement.367
236. We have already expressed the view that if a risk assessor reaches certain conclusions based
on its expert judgement, having determ ined that there is a certain degree of scientific uncertainty, this
does not preclude a panel from assessing whether th ose conclusions are objective and coherent and
have a sufficient basis in the available scientific evidence. We have also stressed the difference
between the underlying scientific evidence, on the one hand, and the reasoning and conclusions of the
risk assessor based on this scientific evidence and, where necessary, on expert judgement, on the other
hand. In this case, as we have already observed, wh at Australia refers to as expert judgement forms

362Panel Report, para. 7.432.
363Panel Report, para. 7.440.
364Panel Report, paras. 7.440 and 7.811.
367New Zealand's appellee's submission, para. 2.73.

an integral part of the reasoning of the risk assesso r and should, therefore, have been subject to the
same scrutiny by the Panel as other parts of the IRA.
237. Regarding Australia's allegation that, in its tr eatment of the IRA expert judgement, the Panel
failed to give meaning to the phrase "as appropriate to the circumstances" in Article 5.1 of the
SPS Agreement, we observe that, in US/Canada – Continued Suspension , the Appellate Body found
that this phrase, while suggesting that account mu st be taken of methodological difficulties, does not
excuse a risk assessor from properly performing the risk assessment.
368 We recall, too, that in
Australia – Salmon , the Appellate Body stated that th e existence of "unknown and uncertain
elements" does not relieve a risk assessor from co mplying with the requirements of Articles 5.1
and 5.2 of the SPS Agreement.369
238. We observe that, if a Member chooses to base SPS measures on a risk assessment, it must
have made the preliminary determination that the re levant scientific evidence is sufficient to perform
a risk assessment. If, however, the Member consider s that scientific evidence is insufficient to
perform a risk assessment, it may instead c hoose to take provisional SPS measures based on
Article 5.7 of the SPS Agreement.
239. In this respect, we recall that, in Japan – Apples , the Appellate Body stated that the relevant
scientific evidence will be considered "insuffici ent" for purposes of Article 5.7 "if the body of
available scientific evidence does not allow, in quantitative or qualitative terms, the performance of an
adequate assessment of risks as required unde r Article 5.1 and as defined in Annex A to
the SPS Agreement."370 I n US/Canada – Continued Suspension , the Appellate Body added that
"where the relevant scientific evidence is suffici ent to perform a risk assessment, as defined in
Annex A to the SPS Agreement, a WTO Member may take an SPS measure only if it is 'based on' a
risk assessment in accordance with Article 5.1 and that SPS measure is also subject to the obligations
in Article 2.2."371
240. Therefore, when the relevant scientific evid ence is sufficient to perform a risk assessment
under Article 5.1 of the SPS Agreement , a risk assessor should rely on the available scientific
evidence, even if the risk assesso r is faced with a certain degree of scientific uncertainty, and decides,

368Appellate Body Reports, US/Canada – Continued Suspension , para. 562. The Panel in EC –
Approval and Marketing of Biotech Products also found that the phrase "as ap propriate to the circumstances" in
Article 5.1 of the SPS Agreement , while providing some flexibility in terms of how a risk assessment is
performed, does not relieve a Member from the requirements of Article 5.1 of the SPS Agreement . (Panel
Report, EC – Approval and Marketing of Biotech Products, para. 7.3053)
371Appellate Body Reports, US/Canada – Continued Suspension, para. 674.

as Australia did in the IRA, that it must use expert judgement as part of its assessment of the relevant
risk. In this case, we understand the Panel to have accepted that Australia could resort to expert
judgement in the presence of scientific uncertain ty. The Panel, however, questioned the IRA's
repeated use of expert judgement in situations where scientific evid ence was available, as well as the
IRA's non-reliance on that available scientific evid ence, and the absence of reasoning as to why such
an approach was used.
241. The fact that Australia performed a risk asse ssment and based its SPS measures on this risk
assessment suggests that Australia considered the relevant scientific evidence to be sufficient to
perform a risk assessment. This is also highlighted by the fact that Australia chose a semi-quantitative
methodology for its risk assessment, suggesting a de gree of confidence in the available scientific
evidence. On several occasions, however, as identified and discussed in the Panel Report 372, the IRA
resorted to the IRA expert judgement to estimate the quantitative probability of certain events, even
where scientific evidence was available. 373 Such recourse to the IRA expert judgement is not in itself
objectionable, but it must be reasoned and explaine d consistently with Articles 5.1 and 5.2 of the
SPS Agreement so that the risk assessment can still be considered a scientif ic process that is based on
the "available scientific evidence".
242. We do not consider, therefore, that the phrase "as appropriate to the circumstances" prevents a
panel from assessing the coherence and objectivity of a risk assessment under Article 5.1 of the
SPS Agreement in situations that present some degree of scientific uncertainty and where a risk
assessor has reached conclusions on the basis of expert judgement.
243. According to Australia, the flexibility to adap t risk assessment methodologies as a function of
the available scientific evidence is further reinfo rced by the reference in Article 5.1 of the
SPS Agreement to the risk assessment techniques developed by international standards organizations.
In this respect, Australia notes that the relevant risk assessment techniques identified in ISPM No. 2
and ISPM No. 11 recognize the need for expert judg ement at every stage of a risk assessment, in case
of scientific uncertainty. 374 Moreover, in Australia's view, th e standards of "documentation" and
"transparency" set forth in ISPM No. 2 and ISPM No. 11 only require identification of where expert
judgement has been used and an explanation of what scientific uncertainty has given rise to the need

372Panel Report, paras. 7.432-7.440.
373In its opening statement at the Panel's second subs tantive meeting with the parties, Australia stated
that, while the IRA "did not rely on 100% expert judgment", "it is true that certain steps in the pathways
assessed were better supported by evidence than others" and that, "[i]n those latter cases, expert judgment was
employed". (Australia's opening statement at the second Panel meeting, para. 12; see also Panel Report,
para. 7.803)

for that expert judgement to be made, but do not suggest any need for an explanation of how a
particular expert judgement was reached.
375
244. As observed above, the phrase "as appropriate to the circumstances" in Article 5.1 of the
SPS Agreement should not be interpreted as authoriz ing a risk assessor to deviate from the
requirements of Articles 5.1 and 5.2 or to ignore th e available scientific evid ence, even where expert
judgement is used. A degree of scientific unc ertainty does not justify a departure from the
requirements of Articles 5.1 and 5.2 and, in partic ular, the requirement that the available scientific
evidence be taken into account in the risk assessment. Generally, doc umentation and transparency in
the use of expert judgement are instrumental in the determination of whether the overall risk
assessment, even when it is conduc ted in the face of some scientific uncertainty, relies on the
available scientific evidence and is consistent with the SPS Agreement.
245. Article 5.1 also requires Members performing risk assessments to take "into account risk
assessment techniques developed by the relevant international organizations". According to
Annex A(3)(c) to the SPS Agreement, the international standards, guidelines, and recommendations
relevant for plant health are those developed unde r the auspices of the IPPC in cooperation with
regional organizations operating with in the framework of the IPPC. Among the roles of the IPPC is
the development of ISPMs. The two ISPMs Austra lia relies on are ISPM No. 2 and ISPM No. 11.
ISPM No. 2 provides a framework describing the pest risk analysis process. ISPM No. 11 provides
details for the conduct of pest risk analysis to de termine if pests are quarantine pests and describes the
integrated processes to be used for risk assessment, as well as the selection of risk management
options.376
246. We note that, while Article 5.1 directs a Memb er conducting a pest risk assessment to take
into account internationally developed risk assessmen t techniques, this does not mean that a risk
assessment must be based on or conform to such te chniques. Nor does it imply that compliance with
such techniques alone suffices to demonstrate co mpliance with a Member's obligations under the
SPS Agreement. However, reference by the risk assessor to su ch techniques is useful both to the risk

376Together, ISPM No. 2 and ISPM No. 11 present th e general framework for conducting a pest risk
assessment. (See supra, footnote 195 of this Report; and Panel Report, paras. 2.69 and 2.71)

assessor, should a dispute arise in relation to the ri sk assessment, and to the panel that is called upon
to review the consistency of that risk assessment with the provisions of the SPS Agreement.377
247. We are not persuaded by Australia's argument that ISPM No. 2 and ISPM No. 11 only require
identification of where expert judgement has been us ed and not of how it has been used. We observe
that both ISPM No. 2 and ISPM No. 11 elaborate the transparency and documentation requirements
for the entire risk assessment process from initiation to pest risk management, not excluding the use of
expert judgement in situations of scientific uncer tainty. It is clear from a complete reading of
ISPM No. 2 and ISPM No. 11 that, in addition to the sections on "uncertainty" that call for the
transparency and documentation of the nature and degree of uncertainty 378, the general sections on
"documentation" specify that the entire pest risk analysis process should be sufficiently
documented.379
248. In the light of the above, we consider that the Panel did not err in expressing the view that the
IRA did not sufficiently document its use of expert judgement and that the IRA should have explained
how it arrived at the expert judgements it made at inte rmediate steps. We also consider that the Panel
did not err in requiring that the IRA base its conc lusions, including those that were reached through
the exercise of expert judgement, on the available scientific evidence and that, therefore, the Panel
correctly assessed whether the reasoning in the IRA revealed the existence of an objective and rational
link between the conclusions reached and the scientific evidence.
4. The Materiality of the Faults the Panel Found with the Reasoning of the IRA
249. Australia claims that the Panel erred in failing to assess the materiality of the faults it found in
the intermediate conclusions reached in the IR A. Australia, relying on the panel report in Australia –
Salmon (Article 21.5 – Canada), maintains that the Panel should have asked, but erroneously failed to
ask, whether any of the alleged flaws in the IRA's reasoning was "so serious" as to undermine

377We observe that the panel in Japan – Apples found that, while the language in Article 5.1 does not
require that a risk assessment be "based on" or "in conformity with" risk assessment techniques of international
organizations, it suggests that "reference to these risk assessment techniques can provide very useful guidance as
to whether the risk assessment at issue constitutes a proper risk assessment within the meaning of Article 5.1."
378See ISPM No. 2, supra, footnote 195 of this Report, Section 3.1; and ISPM No. 11, supra,
footnote 195 of this Report, Section 2.4.
379See ISPM No. 2, supra, footnote 195 of this Report, Section 3.3.2, which states that "the entire
process from initiation to pest risk management should be sufficiently documented so that the sources of
information and rationale for management decisions can be clearly demonstrated", and includes among the main
elements to be documented, the "nat ure and degree of uncertainty and measures envisaged to compensate for
uncertainty". Similarly, Section 4.1 of ISPM No. 11, supra, footnote 195 of this Report, requires that "[t]he
whole process from initiation to pest risk management should be sufficiently documented so that when a review
or a dispute arises, the sources of information and rationale used in reaching the management decision can be
clearly demonstrated."

"reasonable confidence"
380 in the risk assessment as a whole. New Zealand rejects Australia's
contention and argues that the Panel did focus on the materiality of the flaws it found in the
intermediate steps of the IRA and that it properly assessed the cumulative effect of these flaws.
250. We start by observing that the panel in Australia – Salmon (Article 21.5 – Canada) did not
purport to establish any general standard as to when individual flaws in a risk assessment will taint the
risk assessment as a whole. In th at specific case, the panel simply found that certain methodological
flaws identified by the complainant were not ser ious enough for the panel to no longer have
reasonable confidence in the risk assessment. 381 The panel reached the overall conclusion that it had
reasonable confidence in the risk asse ssment at issue in that dispute based on all the other evidence it
reviewed and on the advice of the experts that it had consulted.
251. We also note that, as already discussed, the Pane l appears to have followed the suggestions
made by the Appellate Body in US/Canada – Continued Suspension to review whether the reasoning
articulated on the basis of the scientific evid ence is objective and coherent and whether the particular
conclusions drawn by the Member find sufficient support in the scientific evidence relied upon. 382
Whether a panel adopts this approach to review di screte steps in a risk assessment or whether it also
reviews the overall justification may depend on the struct ure of the risk assessment at issue. This is
consistent with the standard of review applicable to a panel reviewing claims under Article 5.1 of the
SPS Agreement , according to which a panel's task is to review the risk assessment, not to itself
perform the risk assessment.383
252. With respect to fire blight, the Panel followed the structure of the IRA and reviewed the eight
individual importation steps, as well as the factors re lating to entry, establishment and spread of the
pest. The Panel made specific findings on the interm ediate steps and factors because, as it noted in its
conclusions on entry, establishment and spread of fi re blight, there was no "separate justification and
evidence in the IRA regarding the estimated overall likelihood of importation".384
253. The Panel found that for four importation steps (1, 2, 3, and 5) out of eight, the IRA's
estimation of the probability of importation of fire blight did not find sufficient support in the
scientific evidence relied upon and, accordingly, was not coherent and objective. 385 In respect of two
importation steps (4 and 6), the Panel found that New Zealand had failed to make a prima facie case

380Australia's appellant's submission, para. 90 (quoting Panel Report, Australia – Salmon (Article 21.5 –
Canada), para. 7.57).
381Panel Report, Australia – Salmon (Article 21.5 – Canada), para. 7.57.
382Appellate Body Reports, US/Canada – Continued Suspension, para. 591.
383Appellate Body Reports, US/Canada – Continued Suspension, para. 590.
384Panel Report, para. 7.447.
385Panel Report, paras. 7.259, 7.275, 7.290, and 7.320.

that the IRA's estimation of the likelihood of importation was not coherent and objective. 386 Only in
respect of one importation step (7) did the Panel find that the IRA's estimation of the likelihood of
importation appeared to be coherent and objective. The Panel subsequently found, however, that the
IRA's choice of the probability interval 0 to 10-6 for events with a "negligible" likelihood of occurring,
which was the interval assigned to this importation step, was not coherent and objective. 387 The Panel
also found that the IRA's analysis of exposure, of est ablishment, and of spread of fire blight rested on
a number of assumptions and qualifications that le d to reasonable doubts about the evaluation made,
and that the IRA had "not properly considered a number of factors that could have [had] a major
impact on the assessment of this particular risk".388
254. Regarding the potential biological and economic co nsequences of fire blight, the Panel found
that the IRA had a tendency to overestimate th e severity of the consequences of fire blight,
particularly in respect of the criteria concerning plant life or health, and domestic trade or industry,
which had been assigned the most severe scores of "F" and "E", respectively. The Panel therefore
concluded that the IRA's evaluation of the pot ential consequences associated with the entry,
establishment or spread of fire blight in Australia did not rely on adequate scientific evidence and,
accordingly, was not coherent and objective.
389
255. Moreover, the Panel found that the IRA c ontained certain methodological flaws that
magnified the risk assessed and that, because of these flaws, the IRA was not a proper risk assessment
within the meaning of Article 5.1 of the SPS Agreement.
256. With respect to ALCM, the Panel found that th e IRA's analysis of the likelihood of entry,
establishment and spread contained flaws that were enough to create reasonable doubts about the
evaluation made, and that the IRA had "not properly considered a number of factors that could have
[had] a major impact on the assessment of this particular risk". 390 According to the Panel, the IRA's
failures to take properly into account ALCM viabil ity, the impact of parasitism, ALCM's period of
emergence, climatic conditions, and mode of trade, were "enough to cumulatively create reasonable
doubts about the risk assessment with respect to its evaluation of the likelihood of entry,
establishment and spread of ALCM".
391

386Panel Report, paras. 7.306 and 7.331.
387Panel Report, para. 7.342. In respect of importation step 8, New Zealand did not question the IRA's
estimation that the likelihood that Erwinia amylovora survives and remains with the fruit after on-arrival border
procedures is 1 (100 per cent). (Panel Report, paras. 7.347-7.349)
388Panel Report, para. 7.448.
389Panel Report, paras. 7.469 and 7.470.
390Panel Report, para. 7.868.
391Panel Report, para. 7.871.

257. Regarding the potential biological and economic consequences of ALCM, the Panel found
that the IRA had a tendency to overestimate the sev erity of the consequences of ALCM, particularly
in respect of the criteria concerning plant life or health, control or eradication, domestic trade or
industry, and international trade, which had all been assigned the most severe score of "D". The Panel
also found that the IRA's analysis of potential c onsequences did not adequately consider the issues of
geographic range and climatic c onditions necessary for ALCM establishment. The Panel therefore
concluded that the IRA's evaluation of the pot ential consequences associated with the entry,
establishment or spread of ALCM into Australia di d not rely on adequate scientific evidence and,
accordingly, was not coherent and objective.
392
258. In our view, the Panel's analysis reveals that it considered that the faults it found with the
IRA's reasoning on the importation steps and the fact ors relating to entry, establishment and spread
were numerous and serious enough to render th e IRA inconsistent with Article 5.1 of the
SPS Agreement. As we have explained above, we do not c onsider that a panel is required to establish
whether each fault it finds with a risk assessment is , in itself, serious enough to undermine the entire
risk assessment. A comprehensive analysis of all th e steps and factors reviewed may be sufficient to
determine whether various flaws are, when taken t ogether, serious enough to render a risk assessment
one that does not constitute a proper risk assessme nt within the meaning of Article 5.1 of the
SPS Agreement. Moreover, whether a panel reviews the risk assessment as a whole, or whether it
bases its overall conclusions on the analyses of the i ndividual steps and factors reviewed, will depend
on the type and structure of risk assessment revi ewed, and possibly on how a complainant presents
and develops its claims. In this case, and in par ticular in the light of the way in which the IRA
conducted its analysis, the approach adopted by the Panel was appropriate.
259. The Panel reached its conclusions based on a co mprehensive analysis of all the steps and
factors it reviewed and also indicated that the IRA fa iled to consider properly a number of factors that
could have a major impact on the assessment of risk for fire blight and ALCM. 393 Although the Panel
did not in its reasoning explicitly analyze the relativ e gravity, or magnitude, of the flaws that it found
at each relevant importation step or each factor rela ting to the entry, establishment and spread of fire
blight and ALCM, the Panel clearly indicated that taken together these faults were enough to mean
that the IRA did not constitute a proper risk asse ssment within the meaning of Article 5.1 of the
SPS Agreement. Therefore, in the light of the above, we consider that the Panel properly assessed
whether the IRA is a risk assessment with in the meaning of Article 5.1 of the SPS Agreement, based
on a comprehensive analysis of the individual steps and factors analyzed in the IRA.

392Panel Report, paras. 7.883-7.885.
393Panel Report, paras. 7.448 and 7.868.

260. For these reasons, we dismiss Australia's claim that the Panel erred in not assessing the
materiality of the faults it found in the intermediate conclusions reach ed in the IRA in respect of fire
blight and ALCM.
D. Conclusion
261. In the light of the above, we consider that the Panel did not err in finding that the IRA is not a
proper risk assessment within the meaning of Article 5.1 and Annex A(4) to the SPS Agreement and
that the flaws that the Panel found in the IRA al so constituted a failure, under Article 5.2 of the
SPS Agreement, to take sufficiently into account factors su ch as the available sci entific evidence, the
relevant processes and production methods in New Zealand and Australia, and the actual prevalence
of fire blight and viable ALCM.394
262. For these reasons, we uphold the Panel's finding, in paragraphs 7.906 and 8.1(c) of the Panel
Report, that Australia's SPS measures regarding fi re blight and ALCM, as well as the "general"
measures linked to these pests, are inconsistent with Articles 5.1 and 5.2 of the SPS Agreement, and
that, by implication, these measures are also inconsistent with Article 2.2 of the SPS Agreement.395
VII. Article 11 of the DSU
263. We now turn to Australia's claim that the Pane l failed to fulfil its duty under Article 11 of the
DSU to make an objective assessment of the matter be fore it, and Australia's consequent request that
we reverse the Panel's findings that its measures for fire blight and ALCM, as well as the "general"
measures that are linked to these pests, are incons istent with Articles 5.1, 5.2, and 2.2 of the
SPS Agreement.
264. Australia asserts that the Panel failed to make an objective assessment of the matter, as
required by Article 11 of the DSU, because it disreg arded critical aspects of the appointed experts'
testimony that were favourable to Australia. Austra lia also argues that the Panel acted inconsistently
with Article 11 of the DSU because its conclusi ons were based upon a fundamental misunderstanding
of a significant aspect of Australia's risk assessment methodology.
265. We have already concluded that the Panel did not misinterpret or misapply Articles 5.1, 5.2,
and 2.2 of the SPS Agreement, and that it employed the correct standard of review in its assessment of
the conformity of the IRA with these provisions. In this section, we consider, first, whether the Panel

394Panel Report, paras. 7.471, 7.510, 7.886, and 7.904.
395See also Panel Report, paras. 7.472, 7.510, 7.887, and 7.905.

committed an error under Article 11 of the DSU, because it disregarded expert testimony that was
relevant to Australia's case, and second, whethe r the Panel misunderstood the methodology employed
in the IRA to perform the risk assessment.
A. The Panel's Treatment of Testimony by Its Appointed Experts
266. Australia highlights that a panel's duty to make an objective assessment of the matter includes
a requirement that the panel engage with all of the important evidence before it that is relevant to the
matter.
396 In Australia's view, a panel errs when it fa ils to give significant evidence proper, genuine,
and realistic consideration and assess its significance.397 Australia contends that the Panel disregarded
critical aspects of its appointed experts' testimony that were favourable to Australia. Australia relies
on the Appellate Body reports in US/Canada – Continued Suspension to argue that if, in that dispute,
the panel erred by merely reproducing testimony and not assessing its significance, the Panel in the
present dispute committed an even more serious error because, in several instances, it entirely
overlooked testimony that was favourable to Australia's case. 398 Australia claims that merely
reproducing testimony without discussing it, or disreg arding it entirely, constitutes a failure to make
an objective assessment of the fact s, and stresses the importance of the overlooked testimony to its
case.399
267. New Zealand responds that a panel enjoys discretion in assessing whether a given piece of
evidence is relevant for its reasoning, and is not re quired to discuss, in its report, each and every piece
of evidence.400 New Zealand highlights the differences between the circumstances of this case and
those of US/Canada – Continued Suspension . New Zealand points out that, in the latter case, there
were justifiable doubts as to the independence or im partiality of the two e xperts on whom the panel
relied extensively, whereas the experts relied upon by the Panel in this case are clearly independent
and impartial.401
268. We begin by recalling that the text of Article 11 of the DSU states in relevant part that:
... a panel should make an objective assessment of the matter before
it, including an objective assessment of the facts of the case and the
applicability of and conformity with the relevant covered agreements,
and make such other findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in the covered
agreements.

400New Zealand's appellee's submission, para. 2.207.
401New Zealand's appellee's submission, para. 2.209.

269. In EC – Hormones, the Appellate Body stated that "[t]he duty to make an objective assessment
of the facts is, among other things, an obligation to consider the evidence presented to a panel and to
make factual findings on the basis of that evidence". 402 Accordingly, the "deliberate disregard of" or
"refusal to consider" evidence is incompatible with a panel's duty to make an objective assessment of the
facts. In US – Continued Zeroing , the Appellate Body found that the duty to make an objective
assessment of the facts of the case "requires a panel to consider evidence before it in its totality, which
includes consideration of submitted evidence in relation to other evidence".403
270. In US/Canada – Continued Suspension , the Appellate Body further clarified that a panel
should not disregard and has a duty to engage with ev idence that is relevant to the case of one of the
parties.404 The Appellate Body also found that a panel may rely on the advice of experts to review a
Member's SPS measures, and that in doing so th e panel must respect the due process rights of the
parties and its limited role of review. 405 How a panel treats the evid ence that is presented to it,
including expert testimony, may affect the parties' substantive rights in a dispute as well as their rights
to due process. A panel's choice not to discuss a piece of evidence that on its face appears to be
favourable to the arguments of one of the parties mi ght suggest bias or lack of even-handedness in the
treatment of the evidence by the panel 406, even if in fact the panel is making an objective assessment
of the facts.
271. The Appellate Body has, however, also clarified that, as the "trier of facts", a panel enjoys a
margin of discretion in the assessment of the f acts, including the treatment of evidence. In EC –
Hormones, the Appellate Body found that " it is generally within the discretion of the [p]anel to decide
which evidence it chooses to utilize in making findings", and that a "[p]anel cannot realistically refer to
all statements made by the experts advising it and should be allowed a substantial margin of discretion
as to which statements are useful to refer to explicitly". 407 I n EC – Asbestos , the Appellate Body
recognized that a panel enjoys a margin of discre tion in assessing the value of and the weight to be
ascribed to the evidence and that a panel is "entitled, in the exercise of its discretion, to determine that
certain elements of evidence should be acco rded more weight than other elements". 408 In US – Wheat
Gluten, the Appellate Body also stated that "in view of the distinction between the respective roles of
the Appellate Body and panels ... we will not inte rfere lightly with the panel's exercise of its
discretion".409 More recently, in Brazil – Retreaded Tyres, the Appellate Body further clarified that

403Appellate Body Report, US – Continued Zeroing, para. 331.
404Appellate Body Reports, US/Canada – Continued Suspension, paras. 553 and 615.
405Appellate Body Reports, US/Canada – Continued Suspension, para. 592.
406Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), paras. 292-295.
407Appellate Body Report, EC – Hormones, paras. 135 and 138.
409Appellate Body Report, US – Wheat Gluten, para. 151.

"[a] panel enjoys discretion in assessing whether a given piece of evidence is relevant for its
reasoning, and is not required to discuss, in its report, each and every piece of evidence."
410
272. The panel's discretion as the trier of facts, however, finds its limitations in the applicable
standard of review of Article 11 of the DSU. In making "an objective assessment of the facts of the
case" under Article 5.1 of the SPS Agreement , a panel cannot use the evidence, including the
testimony of its appointed experts, to conduct its own risk assessment. Rather, the panel must use
such evidence to review the risk assessment of the WTO Member.
273. In arguing that the Panel violated Article 11 of the DSU, Australia relies on the Appellate
Body reports in US/Canada – Continued Suspension . In that dispute, the Appellate Body found that
by reproducing but not assessing the significance of the testimony of some experts, the panel
effectively disregarded evidence that was potentially relevant to the case of one of the parties, and this
was one of the bases for the Appellate Body's fi nding that the panel in those disputes had acted
inconsistently with Article 11 of the DSU.
411
274. We observe that the passage in US/Canada – Continued Suspension relied upon by Australia
is part of the Appellate Body's broader findings re garding the panel's application of the standard of
review under Article 11 of the DSU. 412 In those disputes, the Appellate Body found that the panel,
instead of reviewing the European Communities' ri sk assessment in accordan ce with the applicable
standard of review, "conducted a survey of the a dvice presented by the scientific experts and based its
decisions on whether the majority of the experts ... agreed with the conclusion drawn in the European
Communities' risk assessment".413 The panel's disregard of certain testimony relevant to the European
Communities was thus only one element that the A ppellate Body considered in the panel's overall
"assessment of the facts", the others being the pane l's use of the experts' testimony to effectively
conduct its own risk assessment and the panel's undue reliance on the view of the majority within the
scientific community, while ignoring views that were favourable to the European Communities.414
275. Regarding the Panel's treatment of the evidence, we consider that its role as the trier of facts
requires it to review and consider all the eviden ce that it receives from the parties or that it seeks
pursuant to Article 13 of the DSU. Noneth eless, as the Appellate Body explained in EC – Hormones,
a panel cannot be expected to refer to all th e statements made by the experts it consulted. 415 T o
reproduce every statement made by the experts in the report is neither a necessary nor a sufficient

410Appellate Body Report, Brazil – Retreaded Tyres, para. 202. (footnote omitted)
411Appellate Body Reports, US/Canada – Continued Suspension, para. 615.
412Appellate Body Reports, US/Canada – Continued Suspension, paras. 585-616.
413Appellate Body Reports, US/Canada – Continued Suspension, para. 598.
414Appellate Body Reports, US/Canada – Continued Suspension, paras. 597 and 598.

condition for a panel to perform its function in acco rdance with Article 11 of the DSU. Article 11
requires a panel, in its reasoning on a given issue, to weigh and balance all the relevant evidence,
including testimony by the experts. A panel may reproduce the relevant statements by the experts, but
still fail to make an objective assessment of the fact s under Article 11 if it then fails to properly assess
the significance of these statements in its reasoning, as the Appellate Body found in US/Canada –
Continued Suspension. Conversely, a panel that does not expressly reproduce certain statements of its
appointed experts may still act consistently with Article 11, especially when the panel's reasoning
reveals that it has nevertheless assessed the signifi cance of these statements or that these statements
are manifestly not relevant to the panel's objective assessment of the facts and issues before it.
276. Whether a panel reproduces and discusses certain testimony in the report depends on factors
such as the relevance of the testimony to the pa nel's reasoning and objective assessment on a given
issue, the context in which the statement was made, as well as the importance attached by the parties
to the testimony. Moreover, a panel's failure to reproduce and discuss one statement by one expert
will in itself rarely, if ever, be enough to invalidate th at panel's overall assessment of the facts of a
case. As was the case in US/Canada – Continued Suspension , a panel's disregard of certain experts'
testimony may be evidence of a more systematic fault in the standard of review applied by that panel
in its overall assessment of the facts of the case.
277. In this dispute, we have already found that the Panel did not err in its application of the
standard of review in its assessment of the IRA under Article 5.1 of the SPS Agreement. We now
consider whether the Panel's treatment of the expe rts' testimony amounts to a failure to make an
objective assessment of the facts under Article 11 of the DSU.
278. In addressing Australia's appeal concerning the Panel's treatment of expert testimony, we
review the individual statements Australia alleges th at the Panel disregarded. We then consider the
context in which each such statement was made, as well as the importance that Australia attached to
these statements in the proceedings before the Panel. We next consider whether the Panel in fact
failed to reproduce and discuss a certain statement in the Report, whether that statement was clearly
pertinent and significant to the Panel's reasoning, a nd, if so, whether the reasoning reveals that the
Panel nonetheless took that statement into consider ation. Finally, after reviewing the Panel's
treatment of the individual statements, we cons ider whether in its overall treatment of expert
testimony the Panel failed to make an objective assessment of the facts under Article 11 of the DSU.
279. We start by recalling that, in addressing the matter in this dispute, the Panel sought the advice
of seven experts in four different fields (fire blight, European canker, ALCM, and pest risk
assessment). The Panel selected and appointed: Dr. Tom Deckers and Dr. Jean-Pierre Paulin in the

field of fire blight; Dr. Bernardo Latorre and Dr. Te rence Swinburne in the field of European canker;
Dr. Jerry Cross in the field of ALCM; and Dr. Gritta Schrader and Dr. Ricardo Sgrillo in the field of
pest risk assessment.
416
280. In its appeal against the Panel's treatment of expert testimony, Australia challenges the Panel's
treatment of certain statements by the appointed expe rts, which were allegedly favourable to its case,
in six different areas. Specifically, Australia cha llenges the Panel's treatment of: (i) a statement by
Dr. Deckers on the overall probability of importation ; (ii) a statement by Dr. Deckers on exposure;
(iii) a statement by Dr. Deckers and a statement by Dr. Paulin on the potential consequences of fire
blight; (iv) a statement by Dr. Deckers on the limitation of exports to mature, symptomless apples ;
(v) a statement by Dr. Schrader on the use of uniform distribution ; and (vi) a statement by Dr. Cross
on the potential consequences of ALCM.
281. Regarding (i) the overall probability of importation of apples infested or infected with fire
blight, Australia argues that the Panel failed to consider Dr. Deckers' statement that he "[did not] feel
that there was an exaggeration of the est imation there in the importation steps".
417 Australia contends
that this statement qualifies significantly Dr. Deck ers' earlier statement, upon which the Panel did
rely, that the probability of importation "could be" overestimated.418
282. New Zealand responds that Dr. Deckers' oral statement concerning the overall probability of
importation does not support Australia's position becau se Dr. Deckers considered that the likelihoods
assessed under importation steps 2, 3, and 5, which we re aggregated as parts of the overall probability
of importation, were overestimated.419
283. We observe that the Panel did not reproduce Dr. Deckers' oral statement, or expressly refer to
it as part of its discussion of the other statements by Dr. Deckers and by the other experts on the
probability of importation through the eight impor tation steps and on the overall probability of
importation of fire blight. The Panel does, however, include a cross-reference to this oral statement
by Dr. Deckers in a footnote to its discussion of Dr. Deckers' written statement that the IRA's overall
probability of importation value could be overestimat ed, which states: "But see, Dr. Deckers's reply
in Transcript of the Panel's meeting with experts, para. 259".420

416Panel Report, para. 1.33.
417Transcript of the Panel's meeting with the scientific experts, Panel Report, Annex B-2, Dr. Deckers,
para. 259.
418Australia's appellant's submission, para. 137 (quo ting Dr. Deckers' response to Panel Question 34,
419New Zealand's appellee's submission, para. 2.221.
420Panel Report, footnote 1595 to para. 7.356.

284. Dr. Deckers' statement that the probability of importation could be overestimated is part of
Dr. Deckers' written reply to Panel Question 34. 421 In contrast, Dr. Deckers' statement that he did not
think that there was an exaggeration of the estimat ion in the importation steps was part of an oral
reply provided by Dr. Deckers to a question posed by the Panel at the meeting with the experts. 422
This testimony must be understood in the contex t of the discussion that preceded and followed it.
Moreover, the purpose of the meeting between the Pa nel and the experts was to "allow the experts to
elaborate and clarify the written responses submitted to the questions that were posed by the Panel,
and to respond to the comments made to those responses by the Parties". 423 Therefore, the statements
made by the experts at the meeting with the Panel should not be assessed in isolation, but in the light
of the written responses that the meeting was intended to clarify and elaborate.
285. We observe that, in making his oral statemen t that he did not think that there was an
exaggeration, Dr. Deckers was answering a ques tion posed by one of the panelists about the
relationship between the estimation of the indivi dual importation steps and the overall probability of
importation of fire blight. Specifically, the panelis t had asked the experts to comment on Australia's
view that there was sufficient support from the e xperts for the IRA's reasoning on certain individual
importation steps to suggest that "any purported exa ggeration of the probability range is not a serious
flaw".424 It would appear, therefore, that in Dr. Deck ers' reply that there was no "exaggeration of the
estimation there in the importation steps", the word "there" refers to those importation steps that the
experts, including himself, had found to be based on scientific evidence, not to those steps he had
found to be overestimated or to the overall probabilit y of importation. In this respect, we recall that
Dr. Deckers had testified that the values assigned by the IRA to importation steps 2, 3, and 5 were

421Dr. Deckers' response to Panel Question 34, Panel Report, Annex B-1, para. 237.
422Transcript of the Panel's meeting with the scientific experts, Panel Report, Annex B-2, Dr. Deckers,
para. 259.
423Transcript of the Panel's meeting with the scientific experts, Panel Report, Annex B-2, Chairman of
the Panel, para. 14.
424Paragraphs 257 and 259 of the Transcript of the Pa nel's meeting with the sc ientific experts, Panel
Report, Annex B-2, read:
Kirsten Hillman
257. ... Australia argues that while the experts expressed some doubts
about the overall probability of importation of E amylovora, this conclusion
should be weighed against the specific support for individual importation
steps, that is support from the experts. In Australia's view, there is sufficient
support for the detail of the IRA team's reasoning to suggest that "any
purported exaggeration of the probability ra nge is not a serious flaw". So we
would like the experts to comment on this statement by Australia and if it
adequately reflects your view on the matter.
Dr Deckers
259. As far as I have understood in this area, I don't feel that there was an
exaggeration of the estimation there in the importation steps. I think there is a
real risk present that should be estimate d as good as possible. For me it was
not an exaggerated situation here. I think you are right to take the estimation
in this way.

overestimated, and that the overall probabilit y of importation of 3.9 per cent could be
overestimated.
425
286. We also note New Zealand's argument that Dr. D eckers' oral statement that he did not think
that there was an exaggeration should be underst ood as referring to the IRA's methodology based on
ten importation scenarios, rather than to the in dividual steps or to th e overall probability of
importation, which he had characterized as "overest imated" in other testimony. In other words,
New Zealand understands that, in making this oral statement, Dr. Deckers was expressing the view
that the aggregation and combination of the diffe rent importation steps and importation scenarios by
the IRA did not result in an exaggerated estimate beyond the overestimation that he had already
indicated that he considered existed with certain individual importation steps.
287. We consider, therefore, that, under either of the interpretations reviewed above, the oral
statement by Dr. Deckers can be read to be consiste nt with his views, expressed in his written replies,
that importation steps 2, 3, and 5 were overestimat ed and the overall probability of importation could
be overestimated. 426 In any event, Dr. Deckers' statement is not without ambiguity and does not
clearly support Australia's argument.
288. For the reasons explained above, we consider th at Australia has not established that the Panel
disregarded any apparent contradictions in the t estimony of Dr. Deckers on the IRA's estimations of
the probability of importation of fire blight. It ap pears from a careful reading of the Panel Report that
the Panel did not "effectively disregard" relevant testimony in its assessment of the IRA's estimation
of the overall probability of importation. While the Panel could have provided some explicit
reasoning as to why it chose to rely on the other written statements that Dr. Deckers made on the same
issue, we do not consider that its failure to do so, in the circumstances of this dispute, amounts to
disregarding or failing to engage with significant evidence that was relevant to Australia's case.
289. Regarding (ii) exposure, Australia argues that in its analysis of this factor the Panel relied on
Dr. Deckers' initial written testimony that the ch ance of epiphytic fire blight bacteria being
transmitted from an imported apple to the susceptible organs of a host plant at the appropriate moment

425In response to specific questions on the IRA's estimation of the likelihoods of importation for
importation steps 2, 3, and 5, Dr. Deckers replied that the value assigned to importation step 2 was "a quite high
rate"; that for importation step 3 the "overall chance of 1% seems to be rather high"; and that the estimation for
importation step 5 was not "sufficiently in accordance with the standards of the scien tific community". (See
Dr. Deckers' responses to Panel Questions 24, 26, and 30, Panel Report, Annex B-1, paras. 173, 186, and 215,
respectively)
426We note that, at the Panel's meeting with the scien tific experts, Australia did not ask Dr. Deckers to
elaborate or clarify his stat ement that he did not think that there was an exaggeration of the estimation in the
importation steps. Nor did Australia raise this issue at the second substantive meeti ng of the parties with the
Panel.

to realize an infection was "rather small", without reproducing or assessing the significance of
Dr. Deckers' clarifying oral testimony that he th ought the IRA's estimation of the probability of
exposure as 0 to 10-6 was "very low" and thus "true".427
290. The Panel does not reproduce Dr. Deckers' oral statement, or expressly refer to it as part of its
discussion of the other statements by Dr. Decker s and by the other experts on the probability of
exposure. However, we consider that the Pa nel's reasoning on exposure reflects Dr. Deckers'
statement that the probability value of 0 to 10 -6 assigned by the IRA for exposure is "very low" and,
therefore, "true".
291. We first observe that in his written statement on exposure Dr. Deckers reached the conclusion
that the chance of transfer by insects was "rather small" having observed that "[f]eeding of insects on
discarded apple fruits is not described in the biological cyclus of [ Erwinia amylovora] as a factor for
the spread of the disease" and that "[a]n insect feed ing on a discarded fruit is not considered to be a
normal way of spreading the disease between an infected fruit and an other host plant".428
292. We recall that the Panel concluded that the IRA's overall analysis of exposure was not
coherent and objective. At the same time, the Pa nel appeared to accept the IRA's reasoning regarding
the possibility of transfer through browsing insects. The Panel found that, "[t]he browsing insects
scenario ... is based on events that cannot be comple tely dismissed" and that "[i]n any event, the
probability value assigned to such event should be commensurate to the extremely low likelihood of
transmission through the browsing insects scenario." 429 According to the Panel, "[t]he IRA's
conclusions on the transfer mechanisms are not s upported by scientific eviden ce, most especially for
the proposed mechanical transmission mechanism".430 However, the Panel also stated that transfer by
browsing insects, "while not totally unreasonabl e, seems to correspond to a highly unlikely
scenario".431 In this respect, we observe that Dr. Decker s' reply that the value assigned by the IRA to
exposure was "very low" and thus "true" was an elaboration on his written reply that the chance of
transmission by browsing insects was "rather small".432

427Australia's appellant's submission, para. 139 (quoting Dr. Deckers' response to Panel Question 35,
Panel Report, Annex B-1, para. 240; and Transcript of the Panel's meeting with the scientific experts, Panel
Report, Annex B-2, Dr. Deckers, para. 297).
428Dr. Deckers' response to Panel Question 35, Panel Report, Annex B-1, para. 240.
429Panel Report, para. 7.403.
430Panel Report, para. 7.417.
431Panel Report, para. 7.417.
432We note that, at the Panel's meeting with the scien tific experts, Australia did not ask Dr. Deckers to
clarify or further elaborate on his statement on exposure in relation to his written response that the chance of
transmission by browsing insects was very small. Nor di d Australia raise this issue at the second substantive
meeting of the parties with the Panel.

293. In the light of the above, we do not consider th at Australia has estab lished that the Panel's
failure to reproduce or discuss Dr. Deckers' statemen t that a "very low" value is correct for the IRA's
assigned probability of exposure amounted to disreg arding or failing to engage with significant
evidence that was relevant to Australia's case.
294. Regarding (iii) the potential biological and economic consequences of fire blight , Australia
argues that the Panel relied exclusively on certain t estimony by Dr. Paulin to the effect that certain
individual impact scores in the assessment of con sequences "could be exaggerated", but failed to
reproduce or assess the significance of favourable testimony given by Dr. Deckers and Dr. Paulin,
both of whom rated the overall potential biological and economic consequences of fire blight as
"high".
433
295. New Zealand responds that the Panel chose to rely primarily on Dr. Paulin's views because
they were more comprehensive and detailed on this issue than those of Dr. Deckers, and because
Dr. Deckers' response to Panel Question 11 and his testimony were of limited assistance in
considering whether the IRA's evaluation of the potential consequences associated with the entry,
establishment and spread of fire blight was coherent and objective.
434
296. The Panel found that, according to the experts it had consulted, the IRA had a tendency to
overestimate the severity of the consequences of fire b light, particularly on plant life or health and on
domestic trade. 435 The Panel relied on the testimony of Dr. Paulin that the most severe individual
impact scores assigned by the IRA to certain criteria were too high, exaggerated, or unrealistic. The
Panel concluded that the IRA's evaluation of the po tential consequences associated with the entry,
establishment or spread of fire blight into Australia did not rely on adequate scientific evidence and,
accordingly, was not coherent and objective.436
297. The Panel, however, did not reproduce or discuss Dr. Deckers' testimony on the potential
consequences of fire blight 437, although this testimony is cross- referenced in a footnote to the
paragraph where the Panel discusses Dr. Paulin's testimony.438 Nor did the Panel reproduce or discuss
Dr. Paulin's general statement that he considered the qualification of "high" for the impact of fire
blight to be appropriate, based on the possible international consequences of fire blight.439

433Australia's appellant's submission, paras. 142 and 145.
434New Zealand's appellee's submission, para. 2.228.
435Panel Report, para. 7.469.
436Panel Report, para. 7.470.
437Dr. Deckers' response to Panel Question 11, Panel Report, Annex B-1, para. 85.
438Panel Report, footnote 1796 to para. 7.465.
439Dr. Paulin's response to Panel Question 11, Panel Report, Annex B-1, para. 94.

298. We start by observing that Dr. Deckers' and Dr. Paulin's general statements that the
consequences of fire blight can be classified as "high" may appear on their face to be inconsistent with
the Panel's finding that the IRA's evaluation of the potential consequences of fire blight does not rely
on adequate scientific evidence and it is not objectiv e and coherent, given that the IRA also estimated
the potential biological and economic consequences of fire blight as "high". We observe that under
Article 5.1 of the SPS Agreement a panel is called to review the objectivity and coherence of the risk
assessment, not whether the results of the risk assessment are correct and correspond to the results the
panel itself would reach based on the advice of the a ppointed experts. To the contrary, a panel must
not use the experts to second-guess th e risk assessor by conducting its own risk assessment; rather, it
has to review the risk assessment and verify that it is objective and coherent, that is, sufficiently based
on the relevant scientific evidence.
299. The general statements by Dr. Deckers and Dr. Pau lin that the consequences of fire blight can
be classified as "high" were not determinative of the Panel's assessment of whether the reasoning in
the IRA on the potential consequences of fire blight was objective and coherent. The Panel expressly
recognized, in this regard, that "[i]t is not the Panel's role to reassess the impact scores assigned by the
IRA to specific criteria and propose different scores". 440 The Panel chose to rely on the testimony by
Dr. Paulin that explained why certain impact sco res assigned by the IRA to individual direct and
indirect criteria were not based on the scientific evidence, and considered that this cast doubt on the
objectivity and coherence of the IRA's conclusions on the potential consequences of fire blight. 441
The Panel, therefore, correctly used the appointed experts to review the IRA's risk assessment, not to
conduct a de novo review.
300. We further note that Australia quotes only the first part of Dr. Deckers' testimony on the
potential consequences of fire blight. However, in the same written response to the question by the
Panel, Dr. Deckers qualifies his appreciation of the po tential consequences of fire blight as "high", by
stating that the consequences depend also on the su ccessful establishment and spread of fire blight
within Australia, that the different regions in Aust ralia will not have all the appropriate climatological
conditions for an optimal infection and development of fire blight, and that there will be differences in
disease development from one year to another.442 Moreover, Australia relies on Dr. Paulin's statement
that he considers the qualification of "high" for the impact of fire blight to be appropriate, without
accounting for the fact that Dr. Paulin states that his view is based on the possible "international
consequences" of fire blight introduction, not on the possible consequences in Australia.

440Panel Report, para. 7.468.
441Panel Report, para. 7.470.
442Dr. Deckers' response to Panel Question 11, Panel Report, Annex B-1, para. 86.

301. It appears, therefore, that Australia focuses on the parts of Dr. Deckers' and Dr. Paulin's
testimony that it considers favourable to its case, while leaving aside aspects of the same testimony
that appear to confirm the Panel's finding that the IRA's conclusions on the potential biological and
economic consequences of fire blight were not objective and coherent.
302. On balance, we do not consider that Australia has established that the Panel disregarded the
general statements by Dr. Deckers and Dr. Paulin that the consequences of fire blight can be classified
as "high", because the Panel did not set out to, and did not, decide whether the IRA's qualification of
the potential consequences of fire blight as "hi gh" was right or wrong, but instead assessed whether
the IRA's conclusions were objective and coherent, th at is, based on the scientif ic evidence. Again,
however, the fact that on their face these statements appear to contradict the Panel's findings that the
IRA's analysis of the potential consequences of fire blight was not objective and coherent means that
the Panel's reasoning would have been clearer if it had explained its treatment of these two statements
and their relationship to its conclusions.
303. Australia further argues that the Panel, in its assessment of the potential biological and
economic consequences, failed to engage with or refer to the evidence of actual production losses
caused by outbreaks of fire blight at Hawkes Bay, New Zealand, in 1998, and in Michigan,
United States, in 2000.
304. The fact that the Panel did not explicitly review specific instances of fire blight outbreaks and
relevant economic losses is consistent with the Pane l's conclusion, based on Dr. Paulin's testimony,
that "it is just not possible ... that fire blight w ould be devastating to the same degree in every place
and on every plant as soon as introduced in a new area".
443 As we have considered above, while a
panel should review all the evidence that is presente d to it, it is not required to discuss in its report
each piece of evidence that is submitted to it and enjoys discretion in assessing whether a given piece
of evidence is more relevant for its reasoning than anot her. In this context, we consider that Australia
has not established that the Panel disregarded or fa iled to engage with significant evidence merely
because the Panel did not, in its Report, refer to the evidence of actual production losses caused by
outbreaks of fire blight at Hawkes Bay and in Michigan.
305. Regarding (iv) the limitation of exports to mature, symptomless apples , Australia contends
that the Panel reproduced, but dismissed without expl anation, the testimony given by Dr. Deckers that

443Panel Report, para. 7.465.

"[t]he limitation of apple exports to mature sy mptomless apples is not enough to achieve Australia's
ALOP".444
306. The Panel reproduced and discussed this testimony by Dr. Deckers in the Article 5.6 section
of its Report, considering that the statement con cerned New Zealand's proposed alternative measure.
The Panel noted that "Dr Deckers is sceptical wh ether New Zealand's alternative measure would
achieve Australia's ALOP on its own", but relied on Dr. Deckers' explanation that "apple fruit are not
considered an important way of spreading the fire blight disease and thus the trade in apple fruit in
Europe is not subject to fire blight control measures".445
307. The Panel explained that, in spite of Dr. Deckers' statement expressing scepticism about
New Zealand's alternative measure, it reached a di fferent conclusion based on other testimony of
Dr. Deckers and Dr. Paulin showing "that they c onsider the overall risk of fire blight entry,
establishment and spread through mature, symptomless apples imported from New Zealand to be very
low – both overall and in regard to specific key points in the import scenario assessed by the IRA." 446
In the light of this, we do not think that Australia has established that the Panel disregarded or failed
to engage with Dr. Deckers' testimony about the suitability of New Zealand's alternative measure to
meet Australia's appropriate level of protection.
308. Regarding (v) the use of uniform distribution, Australia claims that the Panel's finding that the
use of this model was unjustified emphasized Dr. Sgrillo's testimony that the IRA should have used a
triangular distribution and the part of Dr. Schrader's testimony that stated that uniform distribution is
the least realistic of the three distributions. Au stralia, however, alleges that the Panel failed to
reproduce or assess the significance of Dr. Schrader's statement that uniform distribution is useful in
situations presenting "a high degree of uncertainty" and where there is insufficient information to
determine the most likely value.
447
309. As a preliminary matter, we note that we do not read the Panel Report as denying the
usefulness of uniform distribution per se. Rather, the Panel found that the use of uniform distribution
in combination with the IRA's "negligible" interval (0 to 10 -6) results in an overestimation of the
likelihood of occurrence of events described as ones that "would almost certainly not occur". 448
Moreover, the Panel discussed the different types of distribution and concluded that "uniform

444Dr. Deckers' response to Panel Question 15, Panel Report, Annex B-1, para. 117.
445Panel Report, para. 7.1191.
446Panel Report, paras. 7.1191 and 7.1192. See also infra, footnote 575 of this Report.
447Australia's appellant's submission, paras. 147 a nd 148 (quoting Dr. Schrader's response to Panel
Question 135, Panel Report, Annex B-1, para. 781).
448See the IRA's "nomenclature" table, supra, para. 147 of this Report.

distribution is the simplest, but in the circumstances of this case ... it tends to generate less realistic
samples".
449
310. We consider that the Panel was not required to discuss Dr. Schrader's testimony about the
usefulness of uniform distribution in a situation wh ere it had concluded that the conditions for the use
of this type of distribution were not present. In this respect, the Panel's reliance on the testimony of
Dr. Sgrillo—suggesting the use of a triangular di stribution for the modelling of events with a
negligible likelihood of occurring—is not inconsis tent with Dr. Schrader's testimony on uniform
distribution and falls within the Panel's discretion in the weighing and balancing of the evidence. In
the circumstances, Australia has not established that, by not reproducing or assessing part of
Dr. Schrader's testimony about the usefulness of uniform distribution, the Panel disregarded or failed
to engage with evidence that Australia claims was relevant to its case.
311. Regarding (vi) the potential biological and economic consequences of ALCM , Australia
argues that the Panel reproduced Dr. Cross' testimony opining that certain individual impact scores
assigned by the IRA were too severe and that a more credible score could have been assigned, but
failed to reproduce or assess the significance of Dr. Cross' testimony that, even assuming that the most
severe scores were reassigned, this would not r esult in a change of the rating of the overall
consequences as "low" and that, in this respect, "t he conclusion of Australia's analysis was objective
and credible".
450
312. In the case of ALCM, we observe that the Pane l based its conclusions with respect to the
potential consequences also on the fact that the IRA failed to analyze the issue of the existence of
climatic conditions necessary for establishment an d spread of ALCM within Australia or the
geographic range of these conditions. Dr. Cross had st ated, in respect of the entry, establishment and
spread of ALCM, that the IRA had failed to es tablish the geographic and climatic limits for
establishment and spread of ALCM and that a "climatic analysis would also have given a better
assessment of the likely impact of ALCM in different areas of Australia". 451 Therefore, Dr. Cross'
overall appraisal of consequences should be qualified by the views on geographic and climatic factors
that he had expressed in respect of the entry, establishment and spread of ALCM.
313. We have stated above that we do not consider the Panel to have disregarded evidence because
it did not discuss the general statements by Dr. Deck ers and Dr. Paulin that the consequences of fire
blight can be classified as "high". According to the applicable standard of review, the Panel was

449Panel Report, para. 7.492. (emphasis added)
450Australia's appellant's submission, paras. 149 (q uoting Dr. Cross' response to Panel Question 96,
Panel Report, Annex B-1, para. 561) and 150.
451Dr. Cross' response to Panel Question 117, Panel Report, Annex B-1, para. 677.

required to verify that the IRA's conclusions on th e potential consequences of the pests were objective
and coherent, not that they were correct. It follo ws that the general statements by the appointed
experts on the overall qualification of the consequences of pests were not determinative of the Panel's
reasoning and objective assessment of the facts on th is issue. Moreover, we have observed that
Dr. Deckers' statement on the consequences of fire blight was qualified by his view on the presence of
the conditions for establishment and spread of fire bli ght in Australia and that Dr. Cross' statement on
ALCM consequences was qualified by his other testim ony. It follows that we do not consider that
Australia has established that the Panel disregar ded or failed to engage with evidence by not
discussing Dr. Cross' statement that he would not change the overall qualification of "low" assigned
by the IRA to the potential consequences of ALCM. As in the case of the Panel's analysis of the
potential consequences of fire blight, however, the Panel's reasoning could have been clearer on this
issue had the Panel discussed this testimony and expl ained why it was not relevant to the conclusions
it was reaching.
314. We have considered that, in its treatment of th e individual statements by experts in the above
mentioned six different areas, the Panel did not disr egard or fail to engage with significant evidence
that was favourable to Australia's case. While the Panel did not reproduce or discuss some of the
experts' statements that Australia has identified on appeal, we are satisfied that the Panel addressed
the significance of these statements in its analysis of the six issues identified above. We have also
noted that Australia extracts some of the statem ents it argues are favourable to its case out of the
broader context in which the Panel properly assessed them.
315. Therefore, in the light of the above, we do not consider that the Panel failed to make an
objective assessment of the facts under Article 11 of the DSU in its treatment of the experts'
testimony.
B. The Panel's Characterization of the Methodology Employed in the IRA
316. Australia argues that the Panel acted inconsiste ntly with Article 11 of the DSU because it
failed to understand the risk assessment methodology employed in the IRA and, in particular, the
choice of a probability interval of 0 to 10
-6 (zero to one in one million), and a midpoint (if uniform
distribution is used) of 5 × 10 -7 (0.5 in one million) for events with a "negligible" likelihood of
occurring. Australia claims that the IRA team was not constrained by the intervals suggested by the
nomenclature and that the defined correspondence between a so-called "negligible" event and a
probability interval of 0 to 10 -6 was, in and of itself, inevitably ar bitrary. According to Australia, the
Panel should have determined whethe r the estimate for a given step or factor was "within a range that
might be considered legitimate according to the st andards of the scientific community, not whether

the definitional correspondence between th e range and the label was justified".
452 Australia also
argues that the Panel erred in finding that the me thodological flaws constituted an independent basis
for the invalidity of the IRA, considering that the interval 0 to 10 -6 was used at just two points
(importation step 7 and exposure) and in combination with uniform distribution only for exposure.453
317. New Zealand responds that the Panel was correct to focus on the definitional correspondence,
because Table 12 of the IRA sets out a series of likelihood labels, corresponding to quantitative
probability intervals, and defines "negligible" as an event that "almost certainly would not occur". 454
New Zealand argues that the Panel was correct in findi ng that the interval and distribution used in the
IRA for "negligible" events were not appropriate fo r modelling events that almost certainly would not
occur and that the methodological flaws were seri ous enough to constitute an independent basis for
the IRA's invalidity. New Zealand asserts that, if, for example, the IRA had used an interval
of 0 to 10-8 instead of 0 to 10 -6, then, if all else remained the same, including the estimated annual
import volume of 150 million apples, the IRA would ha ve predicted the likelihood of a fire blight
outbreak occurring approximately once every 2,220 years instead of once every 22 years.455
318. The IRA assigned quantitative point estimates or probability intervals to each importation
step and factor relating to entry, establishment a nd spread. Each probability interval was associated
with one of three mathematical distribution models . Uniform distribution, unlike triangular and pert
distribution, does not have a most likely value, but only two parameters, a maximum and a minimum
value, and each value in the continuous range between these two limits occurs with the same
probability.456 The probability interval of 0 to 10 -6, with a midpoint (if uniform distribution is used)
of 5 × 10-7, corresponds in the IRA nomenclature to the qualitative likelihood "negligible" and to the
qualitative descriptor "[t]he event would almost certainly not occur".457
319. The Panel found that because of methodological flaws that magnify the risk assessed, the IRA
is not a proper risk assessment within the meaning of Article 5.1 of the SPS Agreement.458 One of the
two methodological flaws the Panel found concerns the IRA's choice of probability interval for events
with a "negligible" likelihood of occurring. 459 The Panel found that the choice of a probability

454New Zealand's appellee's submission, para. 2.268. This table is reproduced supra, para. 147 of this
Report.
455New Zealand's appellee's submission, footnote 466 to para. 2.274.
456Supra, para. 146 of this Report.
457IRA, Part B, Table 12, p. 43, reproduced supra, para. 147 of this Report.
458Panel Report, para. 7.510.
459The Panel also found that the IRA's use of uniform distribution to model the likelihood of negligible
events "would tend to result in an additional overestimatio n of the likelihood of such 'negligible events'". (Panel
Report, para. 7.508)

interval of 0 to 10-6 for events with a "negligible" likelihood of occurring was not properly justified in
the IRA and led to an overestimation of the probabilit y of entry, establishment and spread of the pests
at issue.460
320. We are not persuaded that, as Australia ar gues, the Panel misunderstood the methodology
used in the IRA. The Panel disagreed with the IRA's assignment of a probability interval covering
events that would occur with relative frequency to events that, based on the scientific evidence, would
almost certainly not occur. The IRA adopted a semi-quantitative methodology and used a
correspondence ("nomenclature") to convert quantita tive probability intervals into qualitative ratings
and descriptors.461 Like the Panel, we believe that, in a semi-quantitative risk assessment such as the
IRA, the objectivity of the correspondence is funda mental to the objectivity and coherence of the
results of the risk assessment. If, as the Panel found 462, the quantitative value that is assigned to the
qualitative likelihood "negligible" is too high, this will have repercussions on the overall probability
of entry, establishment and spread and ultimately on the assessment of unrestricted risk.
321. We observe that the IRA assigned quantitative values (point estimates or probability
intervals) to individual steps and factors, ofte n selecting one of six pre-defined quantitative ranges 463,
the lowest of which was the probability interval 0 to 10 -6.464 These quantitative values were then
combined, in accordance with the IRA's methodology, and using th e @Risk program, to determine an
overall value for the annual probability of entry, establishment and spread. 465 This value was
converted into a qualitative rating that was co mbined with the qualitative rating assigned to the
potential biological and economic consequences in the "risk estimation matrix" to determine the
"unrestricted risk".466 Under such a methodology, a flawed correspondence in the nomenclature may
result in a distortion in the estimation of unrestricted risk.
322. For instance, in the case of "e xposure" to fire blight, the IRA assigned the quantitative value
of 0 to 10-6 (with uniform distribution) for an individual apple to all 20 combinations of the five utility
points and four exposure groups. This probability interval corresponds to a qualitative likelihood of
"negligible" in the IRA's "nomenclature" table, and to the qualitative descriptor "[t]he event would
almost certainly not occur".467 The decision to assign this interval was based on the IRA team's views

460Panel Report, para. 7.508.
462Panel Report, para. 7.484.
463Supra, footnote 207 of this Report.
464See the third column of the "nomenclature" table, supra, para. 147 of this Report.
467See the table reproduced, supra, para. 147 of this Report.

on both mechanical
468 and insect mediated transmission 469, "explicitly acknowledg[ing] that in some
circumstances the chances of exposure would be zero".470
323. The quantitative values assigned to exposure were then combined with the values assigned to
the probabilities of importation, proximity, establis hment and spread using the @Risk program, to
generate an estimate of the annual probability of en try, establishment and spread for fire blight. The
quantitative value estimated for this latter probabilit y was converted, based on the nomenclature, into
the qualitative rating "very low". 471 This qualitative rating "very low" was paired with the "high"
rating assigned to the potential consequences of fire blight in the "risk estimation matrix" 472 to
determine an estimate of unrestricted annual risk of "low" for fire blight, which is above Australia's
appropriate level of protection of "very low".
324. Based on this example, it is evident that, if the correspondence in the IRA nomenclature is not
objectively justifiable, this could have had an im pact on the overall result of the risk assessment.
Specifically, assigning a probability value that does not objectively correspond to the IRA's own
definition of "negligible", that is, an event that "w ould almost certainly not occur", has the effect of
inflating the overall probability of importation and may result in the overestimation of the unrestricted
annual risk. This, in our view, also demonstrates th at, insofar as the methodological flaws in the IRA,
and notably the choice of the probability interval of 0 to 10
-6 for events with a negligible likelihood of
occurring, magnify the risk assessed, the Panel correctly found that they constituted an independent
basis for the inconsistency of Australia's SPS me asures with Articles 5.1, 5.2, and 2.2 of the
SPS Agreement.
325. Finally, we note New Zealand's argument that the IRA does not explain why intervals that
were developed in a different cont ext were appropriate in the context of apples, which are traded in
hundreds of million units per year. 473 In this respect, we observe th at, when combined with uniform
distribution, a quantitative interval that is used to estimate risk based on an annual volume of imported
units will produce very different results depending on whether the product at issue is imported in very
large or more modest numbers of units per year.

468Mechanical transmission refers to a transmission through, for exam ple, exposure of workers and
equipment to the pest. (Supra, footnote 226 of this Report)
469Insect mediated transmission refers to a transfer of bacteria to a susceptible host plant by insects that
have browsed on discarded apples. (Supra, footnote 227 of this Report)
470Supra, para. 151 of this Report.
471In fact, using the two alternative measures rega rding proximity, the IRA generated two probability
values, both of which fell within the category of "very low" in the IRA's nomenclature. ( Supra, para. 152 and
footnote 232 of this Report)
473New Zealand's appellee's submission, para. 2.273.

326. In the light of the above, we do not consider that the Panel misunderstood the methodology
used in the IRA. Accordingly, Australia has not established that th e Panel acted inconsistently with
Article 11 of the DSU in its assessment of Australia's risk assessment methodology.
C. Conclusion
327. For the reasons stated above, we find that Australia has not established that the Panel failed to
make an objective assessment of the facts under Article 11 of the DSU in its treatment of the experts'
testimony or of the IRA's risk assessment methodology.
VIII. Article 5.6 of the SPS Agreement
328. We turn next to Australia's appeal of the Pa nel's finding that Australia's measures regarding
fire blight and ALCM are more trade restrictive than required and, therefore, inconsistent with
Article 5.6 of the SPS Agreement.474 At the outset of its analysis of New Zealand's claim under this
provision, the Panel stated that, to prove a violati on of Article 5.6, a comp lainant must demonstrate
that an alternative measure: (i) is reasonably available taking into account technical and economic
feasibility; (ii) achieves the importing Member's appropriate level of sanitary or phytosanitary
protection; and (iii) is significantly less restrictiv e to trade than the SPS measure(s) at issue in the
dispute.475 The Panel viewed these three elements as cumulative in nature and noted the parties'
agreement to that effect.476
329. With respect to the burden of proof, the Pa nel stated that, in order to establish an
inconsistency with Article 5.6, a complainant must establish a prima facie case that there is an
alternative measure that meets all three elements under Article 5.6. Thus, the Panel stated that it was
for New Zealand to demonstrate that all three conditions of the Article 5.6 test are fulfilled.477
330. As an alternative measure to limit the risk of fire blight, the Panel considered the restriction of
imports from New Zealand to mature, symptomless apples. 478 As an alternative measure to limit the
risk of ALCM, the Panel considered requiring inspection of a 600-fruit sample of each import lot with

474Panel Report, paras. 7.1403 and 8.1(e); see also paras. 7.1197 and 7.1266 (with respect to fire
blight); and paras. 7.1328 and 7.1365 (with respect to ALCM).
Appellate Body Report, Japan – Agricultural Products II, para. 95).
476Panel Report, para. 7.1098.
477Panel Report, paras. 7.1104 and 7.1105.
478The Panel noted that New Zealand had pointed to possible additional alternative measures, but had
immediately discounted these alterna tives because they were based on th e incorrect assumption that mature,
symptomless apples are vectors for fire blight and that New Zealand had not developed arguments for the
additional alternatives with respect to all three conditions of Article 5.6 of the SPS Agreement . The Panel
therefore restricted its Article 5.6 analysis with respect to fire blight to the sole alternative of restricting imports
of apples to mature and symptomless fruit. (Panel Report, paras. 7.1109-7.1118)

appropriate treatment or rejection of the lot in the event that ALCM is found in the sample.
479 We
note that New Zealand's proposed alternative measur e for fire blight—to limit imports of apples to
mature, symptomless apples—is the same as the " unrestricted risk" scenario assessed by the IRA. 480
Although the wording used by the IRA in describing the "starting point" of its analysis was slightly
different from the wording used by New Zealand to describe its alternative measure, the participants
confirmed at the oral hearing in this a ppeal that the two are in essence the same.
481 Furthermore,
New Zealand's alternative measure relating to ALCM is the same as the first option of Measure 14,
except that the sample size in New Zealand's alternative measure (600 fruit) is smaller than the sample
size in the first option of Measure 14 (3000 fruit).482
331. Applying the three-pronged test under Article 5.6 to the alternative measure proposed by
New Zealand to limit the risk of fire blight, th e Panel found that the restriction of imports from
New Zealand to mature, symptomless apples fulfilled th is test. First, the Panel found that Australia
did not directly contest that the alternative measure would be reasonably available, taking into account
technical and economic feasibility. 483 Second, the Panel found that New Zealand had raised a
"sufficiently convincing presumption" that rest ricting imports from New Zealand to mature,
symptomless apples would meet Australia 's appropriate level of protection 484, namely, "providing a
high level of sanitary or phytosanitary protection aimed at reducing risk to a very low level, but not to
zero".485 Third, the Panel found that restricting imports to mature, symptomless apples is significantly
less trade restrictive than Australia's fire blight measures at issue. 486 In the light of these findings, the

479The Panel noted that New Zealand had argued that one of the additional alternative measures it had
suggested for fire blight would also be an alternative measure with respect to ALCM. The Panel restricted its
assessment to only one alternative meas ure, namely, the inspection of a 60 0-fruit sample from each import lot.
(Panel Report, paras. 7.1267-7.1284)
480The scope of the IRA is the importation of mature New Zealand apples free of trash. In addition,
standard commercial agronomic practice forms the basis for consideration of risk management measures. One
of the features of standard commercial agronomic practice is that fruit be free of fire blight symptoms. Because
production procedures and pest management practices in apple orchards, as well as packing house processes
used in New Zealand, are intended to ensure that apples for export are free from visible symptoms of fire blight
and trash and meet commercial export standards, this forms the starting point for the consideration of risk
management measures in the IRA. (See IRA, Part B, p. 105; see also p. 9)
481Australia said "[d]efinitely, yes. In substance, th ey are the same things". New Zealand stated that
"there is not a significant difference between the two" and that both refer to "the apples that New Zealand would
actually export to Australia". (Reponses by Australia and New Zealand to questioning at the oral hearing)
482The participants confirmed, at th e oral hearing in this appeal, that under New Zealand's proposed
alternative measure, with a 600-unit sample size, det ection of any live quarantinea ble arthropod would also
result in appropriate treatment or rejection for export.
483Panel Report, paras. 7.1257 and 7.1258.
484Panel Report, para. 7.1197.
485Panel Report, paras. 7.1121 and 7.1136.
486Panel Report, para. 7.1265. We recall that Aust ralia's measures concerning fire blight are
Measures 1-8, as set out supra, para. 125 of this Report.

Panel concluded that New Zealand had demonstrated th at its alternative measure regarding fire blight
fulfils the three cumulative conditions of Article 5.6.487
332. The Panel then applied the same test to the alternative measure proposed by New Zealand to
limit the risk of ALCM, and found that requiring in spection of a 600-fruit sample of each import lot
with appropriate treatment or rejection of the lot in the event that ALCM is found in the sample also
fulfilled the three conditions of the Article 5.6 test. The Panel found that Australia did not contest that
the alternative measure would be reasonably ava ilable, taking into account technical and economic
feasibility.488 The Panel further found that New Zealand had successfully raised a prima facie case
that requiring inspection of a 600-fruit sample of each import lot would meet Australia's appropriate
level of protection. 489 In addition, the Panel found that requiring inspection of a 600-fruit sample
from each import lot is significantly less trade restri ctive than Australia's ALCM measure at issue. 490
In the light of these findings, the Panel conclude d that New Zealand had demonstrated that its
alternative measure regarding ALCM fulfils the three cumulative conditions of Article 5.6.491
333. On the basis of this analysis, the Panel conc luded that Australia's measures regarding fire
blight and ALCM are more trade restrictive than re quired and therefore inconsistent with Article 5.6
of the SPS Agreement.492
334. Australia appeals the Panel's overall finding of inconsistency with Article 5.6. Australia's
appeal is confined to the Panel's findings that the alternative measures put forward by New Zealand
meet Australia's appropria te level of protection. 493 Australia argues that the Panel erred in law,
particularly in finding that New Zealand had ra ised a sufficiently convincing presumption that
restricting imports of New Zealand apples to mature, symptomless apples was an alternative measure
with respect to fire blight that would meet Australia's appropriate level of protection
494; and in finding
that New Zealand had made a prima facie case that the inspection of a 600-fruit sample of each

487Panel Report, para. 7.1266.
488Panel Report, paras. 7.1335 and 7.1336.
489Panel Report, para. 7.1328.
490Panel Report, para. 7.1364. We recall that Austra lia's measure concerning ALCM is Measure 14, as
set out supra, para. 125 of this Report.
491Panel Report, para. 7.1365.
492Panel Report, paras. 7.1403 and 8.1(e); see also 7. 1197 and 7.1266 (with respect to fire blight); and
paras. 7.1328 and 7.1365 (with respect to ALCM). The Panel also found, in paragraphs 7.1252 and 7.1266 of its
Report, that Australia's measures regarding European canker were inconsistent with Article 5.6. In addition, the
Panel found, in paragraph 7.1402 of its Report, that New Zealand had not demonstrated that Australia's
"general" measures are inconsistent with Article 5.6.
493Australia has not appealed the Panel's findings rega rding the first and third conditions in Article 5.6,
that is, regarding the availability of New Zealand's proposed alternative measures or their relative
trade-restrictiveness. Australia has also not appealed the Panel's findings under Article 5.6 of the
SPS Agreement with respect to the measures concerning European canker.
494Panel Report, para. 7.1197.

import lot would be an alternative measure with respect to ALCM that would meet Australia's
appropriate level of protection.
495
335. Australia raises several claims with respect to these findings of the Panel. Australia argues
that the Panel's overall finding under Article 5.6 should be reversed consequentially upon a reversal of
the Panel's findings under Articles 5.1, 5.2, and 2.2. Australia further alleges that the Panel
misinterpreted the requirements of Article 5.6 a nd misapplied the rules governing the burden of proof
by requiring New Zealand to demonstrate only that its proposed alternativ e measures "might" or
"may" achieve Australia's appropria te level of protection, instead of requiring a demonstration that
they "would" do so. Australia also alleges that the Panel failed to assess whether a "proper" risk
assessment would necessarily have concluded th at the alternative measures "would" achieve
Australia's appropriate level of protection. Australia also contends that the Panel misinterpreted the
words "appropriate level of sanitary or phytosanitary protection" in Article 5.6, because it focused its
analysis of the alternative measures only on the likel ihood of entry, establishment and spread of a pest
and failed to consider the "associated potential biological and economic consequences".
A. Article 5.6 and Footnote 3
336. Article 5.6 of the SPS Agreement and footnote 3 thereto provide:
Without prejudice to paragraph 2 of Article 3, when establishing or
maintaining sanitary or phytosanitary measures to achieve the
appropriate level of sanitary or phytosanitary protection, Members
shall ensure that such measures ar e not more trade-restrictive than
required to achieve their appr opriate level of sanitary or
phytosanitary protection, taking into account technical and economic
feasibility.
3
3For purposes of paragraph 6 of Article 5, a measure is not more trade-
restrictive than required unless ther e is another measure, reasonably
available taking into account techni cal and economic feasibility, that
achieves the appropriate level of sanitary or phytosanitary protection and is
significantly less restrictive to trade.
337. In Australia – Salmon , the Appellate Body found that Ar ticle 5.6 and, in particular, the
footnote to this provision, set out a three-pronged t est for inconsistency with Article 5.6. Such a
violation will be established when there is a measure, other than the contested measure, that:
(i) is reasonably available taking into account technical and economic feasibility;
(ii) achieves the Member's appropriate level of sanitary or phytosanitary protection; and

495Panel Report, para. 7.1328.

(iii) is significantly less restrictive to trade than the SPS measure contested.496
These three conditions are cumulative, meaning that a ll of them must be met in order to establish an
inconsistency with Article 5.6. If any one of them is not fulfilled, the measure in dispute will be
consistent with Article 5.6. 497 In determining whether the firs t two of these conditions have been
satisfied, a panel must focus its assessment on the pr oposed alternative measure. Only in examining
whether the third condition is fulfilled will a panel need to compare the proposed alternative measure
with the contested SPS measure.
338. Article 2 of the SPS Agreement , entitled "Basic Rights and Obligations", provides context
relevant to the meaning of Article 5.6. In particular, Article 2.2 provides that:
Members shall ensure that any sanita ry or phytosanitary measure is
applied only to the extent necessary to protect human, animal or plant
life or health, is based on scientific principles and is not maintained
without sufficient scientific evid ence, except as provided for in
paragraph 7 of Article 5.
339. The Appellate Body has observed that Article 2.2 "informs" 498, "impart[s] meaning to"499, and
"is made operative in" 500, other provisions of the SPS Agreement , including certain of the more
specific obligations set out in Article 5, which is entitled "Assessment of Ri sk and Determination of
the Appropriate Level of Sanitary or Phytosanitary Protection". Thus, in EC – Hormones , the
Appellate Body stated that "Articles 2.2 and 5.1 should constantly be read together. Article 2.2 informs
Article 5.1: the elements that define the basic obligation set out in Article 2.2 impart meaning to
Article 5.1."501 The same type of relationship exists between Articles 2.2 and 5.2 and between
Articles 2.2 and 5.6. In this connection, we take pa rticular note of the si milarities between the
requirement in Article 2.2 that Members apply th eir SPS measures "only to the extent necessary to
protect", and the requirement in Article 5.6 that SPS measures be "no more trade-restrictive than
required to achieve" the relevant objectives.
340. The Appellate Body has also held that ther e is a one-way, dependent relationship in law
between the more specific provisions of Article 5. 1 or Article 5.2, on the one hand, and the more
general provisions of Article 2.2, on the other ha nd. Thus, the Appellate Body has ruled that a

500Appellate Body Reports, US/Canada – Continued Suspension, para. 674.
501Appellate Body Report, EC – Hormones , para. 180. Similarly, with respect to the relationship
between Article 2.3 and Article 5.5 of the SPS Agreement, the Appellate Body found that Article 5.5 must be read
in the context of Article 2.3, and that Article 5.5 may be seen as marking out and elaborating a particular route
leading to the same destination set out in Article 2.3. (Appellate Body Report, EC – Hormones, para. 212)

violation of Article 5.1 or Article 5.2 can be presume d to imply a violation of Article 2.2, but that the
reverse does not hold true—that is, a violation of Ar ticle 2.2 does not imply a violation of Article 5.1
or Article 5.2.
502 Whether a similar relationship exists betw een Article 2.2 and Article 5.6 has not yet
been squarely decided, and is not an issue that is raised in this appeal 503, although it has been
suggested that just such a relationship does exist.504
341. While several aspects of these relationships—bet ween the basic rights and obligations set out
in Article 2, in particular its second paragraph, on the one hand, and the more specific elaborations of
these basic obligations in Article 5, on the other ha nd—have thus been clarified, the relationships
between the various paragraphs within Article 5 re main relatively unexplored. As a general matter,
we see the various paragraphs of Article 5 as se tting out distinct legal obligations with which
Members must comply. For example, Article 5.1 seeks to ensure that a Member's SPS measure has an
appropriate scientific basis, whereas Article 5.6 seek s to ensure that appropriate limits are placed on
the trade-restrictiveness of a Member's SPS measure . A complainant may challenge the consistency
of a specific SPS measure with either or both of these obligations. When a complainant seeks to
establish violations of both obligations, some of th e factual circumstances that it chooses to rely upon
to establish a violation of one obligation may also be relevant to, and appropria tely form part of, the
evidence upon which it relies to establish a violation of the other, separate, obligation. However, the
obligations in Article 5.1 and Article 5.6 are not de pendent upon each other. Thus, the legal analysis
of an SPS measure's consistency w ith Article 5.1 is separate and distinct from the legal analysis of
that measure's consistency with Article 5.6. Violation of one obligation does not, without more,
imply the violation of the other. As the Appellate Body opined in Australia – Salmon , an SPS
measure that is consistent with Article 5.1 may none theless be inconsistent with either Article 5.5 or
Article 5.6, or with both.505

503The Panel found a violation of Article 5.1 and, therefore, of Article 2.2. Having also found a
violation of Article 5.6, the Panel exercised judicial economy with respect to New Zealand's additional claim
that, " because they are more trade restrictiv e than required, the measures al so breach the requirement in
Article 2.2 that measures be 'applied only to the extent necessary to protect human, animal or plant life or
health.'" (Panel Report, paras. 7.1404 (quoting New Z ealand's first written submission to the Panel, para. 4.540
(emphasis added)), 7.1409, and 7.1410) Neither partic ipant has appealed the Pane l's decision to exercise
judicial economy on this claim.
504After pointing to the phrase "only to the extent necessary" in Article 2.2 of the SPS Agreement, the
Appellate Body observed, in a footnote in its report in Australia – Salmon, that:
[t]he establishment or maintenance of an SPS measure which implies or
reflects a higher level of protection than the appropriate level of protection
determined by an importing Member, could constitute a violation of the
necessity requirement of Article 2.2.
(Appellate Body Report, Australia – Salmon, footnote 166 to para. 213)

342. This appeal concerns the second condition in Artic le 5.6, namely, that an alternative measure
must meet the importing Member's appropriate level of protection. The phrase "appropriate level of
sanitary or phytosanitary protection" is defined in Annex A(5) to the SPS Agreement as "[t]he level of
protection deemed appropriate by the Member establishing a sanitary or phytosanitary measure to
protect human, animal or plant life or health within its territory." The note to Annex A(5) explains
that the concept of the appropriate level of protec tion is also referred to as the "acceptable level of
risk". The Appellate Body has held that it is the "prerogative"
506 of a WTO Member to set the level of
protection it deems appropriate507, and has explained that the establis hment of "the level of protection
is an element in the decision-making process whic h logically precedes and is separate from the
establishment or maintenance of the SPS measure".508
343. The Appellate Body has also found that the SPS Agreement contains an implicit obligation for
a WTO Member maintaining an SPS measure to est ablish and articulate its appropriate level of
protection.509 Otherwise, and especially in assessing whet her an SPS measure is consistent with
Article 5.6, it would be impossible to examine wh ether alternative measures achieve the appropriate
level of protection. 510 While there is no obligation to set the appropriate level of protection in
quantitative terms, a Member is not free to establish its level with such vague ness or equivocation as
to render impossible the application of the relevant disciplines of the SPS Agreement, including the
obligation set out in Article 5.6.511
344. Under Article 5.6, in order to assess whether a significantly less trade-restrictive alternative
measure that would meet the appropriate level of protection is available, we consider that a panel must
identify both the level of protection that the importing Member has set as its appropriate level, and the
level of protection that would be achieved by the alternative measure put forth by the complainant. 512
Thereupon the panel will be able to make the requisite comparison between the level of protection
that would be achieved by the alternative measure and the importing Member's appropriate level of
protection. If the level of protection achieved by the proposed alternative meets or exceeds the
appropriate level of protection, then (assuming that the other two conditions in Article 5.6 are met) the

506Appellate Body Report, Australia – Salmon, para. 199. (emphasis omitted)
507While it is a WTO Member's prerogative to choose its level of protection, the SPS Agreement
provides for certain disciplines that a Member must respect when it has done so. (See Appellate Body Reports,
US/Canada – Continued Suspension, footnote 1088 to para. 523)
508Appellate Body Report, Australia – Salmon, para. 203. (emphasis omitted)
509Appellate Body Report, Australia – Salmon, para. 206. The Appellate Body based its reasoning, in
part, on the text of Articles 5.3 and 5.4 of the SPS Agreement. Article 5.3 refers to "determining the measure to
be applied for achieving the appropriate level of sanitary or phytosanitary protection", and Article 5.4 requires that
"Members should, when determining the appropriate level of sanitary or phytosanitary protection, take into
account the objective of minimizing negative trade effects."

importing Member's SPS measure is more trade restri ctive than necessary to achieve its desired level
of protection.
B. Australia's Appeal
1. Whether the Panel's Finding under Artic le 5.6 was Consequential upon Its
Findings under Articles 5.1, 5.2, and 2.2 of the SPS Agreement
345. Australia requests the Appellate Body to rever se the Panel's finding that Australia's measures
regarding fire blight and ALCM are inconsistent with Article 5.6, consequentially upon reversal of the
Panel's findings under Articles 5.1, 5.2, and 2.2 of the SPS Agreement. Australia asserts that the Panel
made its finding under Article 5.6 largely conse quentially upon its finding that the IRA was not a
valid risk assessment within the meaning of Article 5.1. 513 Thus, Australia contends that, if the
Appellate Body reverses the Panel's findings under Ar ticles 5.1, 5.2, and 2.2, then the basis for the
Panel's finding relating to Article 5.6 would fall because that finding could not be sustained on its own
terms.
346. We have upheld the Panel's findings unde r Articles 5.1, 5.2, and 2.2 of the SPS Agreement.514
Thus, there is no basis for a consequential reversal of the Panel's finding under Article 5.6. In any
event, we are not convinced that as a matter of pr inciple a reversal of the Panel's findings under
Articles 5.1, 5.2, and 2.2 would necessarily require reversal of the Panel's finding under Article 5.6.
As set out above, the obligations in Article 5.1 a nd Article 5.6 are not dependent upon each other.
The violation of one obligation does not, without more, imply the violation of the other. Thus, even if
we were to reverse the Panel's findings under Articl es 5.1 and 5.2, which we do not, this would not
necessarily require reversal of the Panel's finding under Article 5.6.
347. At the same time, when a complainant mak es claims that the same SPS measure is
inconsistent with both Article 5.1 and Article 5.6, factual elements relevant to the analysis under one
provision may also be relevant to the analysis un der the other provision. As explained below, we
understand many of the arguments put forth by Australia in support of its appeal of the Panel's finding
under Article 5.6 of the SPS Agreement to relate to such factual elements, and to how the Panel dealt
with them.

2. The Alleged Errors in the Panel's Analysis of New Zealand's Article 5.6
Claim
348. In addition to its request for consequential reve rsal of the Panel's finding under Article 5.6,
Australia also contends that the Panel's Article 5.6 finding should be revers ed due to a number of
alleged errors of misinterpretation and misapplicat ion of Article 5.6. According to Australia, in
tackling New Zealand's Article 5.6 claim, the Pane l asked the wrong legal question and, due to its
"anxiety" to avoid conducting an impermissible de novo review, failed to satisfy itself "affirmatively
on the basis of the evidence and arguments advanced by New Zealand that the alternative measures
'would achieve'" Australia's appropriate level of protection.515 Australia submits that the Panel should
have assessed whether a proper risk assessment would necessarily have concluded that the alternative
measures would achieve Australia's appropriate level of protection. Australia alleges that, instead, the
Panel relied upon its finding under Article 5.1 as to the inadequacy of the IRA in order to find that
New Zealand's Article 5.6 claim was established. 516 According to Australia, any invalidity affecting
the IRA entitled the Panel to conclude, at most, that New Zealand's Article 5.6 claim was not
foreclosed, not that it had been established. The Panel, therefore, wrongly asked whether the
alternative measures "could" or "might" achieve the appropriate level of protection, and wrongly
relied upon evidence that "suggests" or "leaves open" the inconsistency of, or "casts doubt upon" the
consistency of, Australia's measures with the SPS Agreement.517 Furthermore, according to Australia,
the Panel failed to make the affirmative factual finding that would have been necessary to find a
violation of Article 5.6, namely, that the altern ative measures proposed by New Zealand would meet
Australia's appropriate level of protection.
349. As such, Australia's allegations relate to the ove rall analytical approach taken by the Panel in
assessing New Zealand's claim under Article 5.6. Ther efore, we address first the Panel's analytical
approach to Article 5.6.
(a) The Panel's Analytical Approach to Article 5.6 of the SPS Agreement
350. The Panel's analysis of whether New Zealand had established a prima facie case that its
proposed alternative measures would meet Australia's appropriate level of protection proceeded in
two steps. The Panel explained its two-step approach as follows:
[T]he Panel will assess first whether New Zealand has demonstrated
that Australia's calculation of the risk resulting of the importation of
New Zealand apples is exaggerated. If New Zealand is successful in
making this case, it would cast doubt on whether the risk would

515Australia's appellant's submission, para. 180. (emphasis omitted)

exceed Australia's ALOP to the ex tent calculated by the IRA, and
warrant as strict risk management measures as those developed by
the IRA. Further, it would cast doubt on whether the risk of the three
pests at issue necessarily exceeds Australia's ALOP and warrants risk
management measures at all. Since risk management measures are
necessary only if the risk exceeds the ALOP, in case there is doubt
that the risk exceeds the ALOP to the extent calculated, or doubt that
it exceeds the ALOP at all, then it is appropriate for the Panel to go
on to consider whether the less strict alternative measure suggested
by New Zealand may meet Australia's ALOP.
Second, the Panel will assess more directly whether, assuming that
risk management measures are necessary, the alternative measures
properly identified by New Zealand might sufficiently reduce the risk
to, or below, Australia's ALOP. Obviously, the Panel cannot conduct
a de novo risk assessment. The Panel's task is to assess whether New
Zealand has raised a presumption, not successfully rebutted by
Australia, that the alternative measures have a sufficient risk
reduction effect. The Panel will analyse whether New Zealand has
advanced sufficient indices for such a risk reduction effect, and
consider what the experts say about such an effect. The Panel will
also assess whether the IRA evaluate d the alternatives identified by
New Zealand, and—if they were evaluated—whether their eventual
rejection by the IRA was justified.
518 (emphasis and underlining
added)
351. Furthermore, as regards the Panel's approach to analyzing the second condition of Article 5.6,
the Panel stated that it must not conduct a de novo review519 and that it had to be careful not to "slip
into conducting a de novo review".520
352. In response to questioning at the oral heari ng, New Zealand stated that it considered the
two-step approach to be "sensible" in the circumstan ces of the present dispute. Australia allowed that
the two-step approach was "correct", insofar as it r ecognized that if Australia had, in a valid risk
assessment, found that the alternative measures di d not meet Australia's appropriate level of
protection, then this would have foreclosed a finding of violation of Article 5.6. The European Union,
Japan, and the United States responded that it was not necessary for the Panel to undertake the first
step.
353. The participants were also asked whethe r they understood the last sentence of
paragraph 7.1143 of the Panel Repor t (underlined in the above quotation) to mean that the Panel
considered that it could only proceed to the second step of its analysis once it had found a violation of
Article 5.1. Australia understood the Panel to be of the view that it could only proceed to the second

518Panel Report, paras. 7.1143 and 7.1144.
519Panel Report, para. 7.1134.
520Panel Report, para. 7.1193.

step of its analysis once it had found a violation of Article 5.1, and stated that this was correct.
New Zealand understood the Panel simply to have raised the question of whether Australia's
assessment of risk was exaggerated and to have answered that question by referring to factual findings
that it had already made in its analysis of New Zeal and's Article 5.1 claim. The European Union read
the sentence as implying that the only way to reach the second step was to first complete the first step,
and found this questionable. Japan contended that the Panel's statement could be considered as setting
forth a general rule for an Article 5.6 analysis, which Japan considered to be problematic. The
United States did not understand the Panel to have stated that it could proceed to the second step of its
analysis only because of its finding of inconsistency under Article 5.1.
354. We see a number of problems with the Panel' s approach under Article 5.6. Beginning with
the "two-step" approach, we find no basis in Article 5.6 for requiring a complainant pursuing a claim
under that provision to establish that the importing Member has, in its risk assessment, overestimated
the risk associated with the imported product or has erred in concluding that SPS measures are
necessary at all. We disagree with the Panel's suggestion that a "direct" analysis of whether a
complainant has succeeded in proving that its proposed alternative measure meets the second
requirement of Article 5.6 may be undertaken only once the complainant has "cast doubt" upon the
importing Member's risk assessment. 521 As we have already stated, the obligations set out in
Article 5.1 and Article 5.6 are dis tinct and legally independent of each other. Accordingly, the Panel
was required to undertake its own analysis of th e question of whether the alternative measures
proposed by New Zealand would achieve Aust ralia's appropriate level of protection. 522 I n f a c t , a
complainant is free to challenge the consistency of a measure with Article 5.6 without, at the same
time, alleging a violation of Article 5.1. In that event, as well as in the present dispute, a panel's
Article 5.6 analysis must stand on its own feet.

521We recognize that two specific circumstances of this dispute may have drawn the Panel to adopt
such an approach, especially in its assessment of New Zealand's proposed a lternative measure for fire blight.
First, New Zealand's proposed alternative measure for fire blight—to limit the import of apples to mature,
symptomless apples—is the same as the "unrestricted risk" scenario assessed by the IRA. Although the wording
used by the IRA in describing the "starting point" of its analysis was slightly different from the wording used by
New Zealand to describe its alternative measure, the participants confirmed at the oral hearing in this appeal that
the two are in essence the same. As such, the IRA was assessing the risk resulting from the importation of
mature, symptomless apples. Second, Australia's only de fence to New Zealand's Article 5.6 claim was that the
IRA had already considered the alternative measures put forward by New Zealand, and found that they did not
meet Australia's appropriate level of protection. In other words, Australia's defence was that the IRA had
already assessed New Zealand's proposed alternatives and rejected them as failing to meet Australia's
appropriate level of protection. Confronted with these particular factual circumstances, the Panel may have felt
that, as a "first" or preliminary st ep, it should check whether the answer given by the IRA to the question of
whether the alternative measures meet Australia's appropriate level of protection could affect whether the Panel
could go on to answer the same question itself.
522We note that New Zealand relied on largely the same facts and evidence in the context of its claims
under both Article 5.1 and Article 5.6. However, the Panel should not have taken that to mean that the legal
analyses under the two provisions should overlap.

355. The Panel was required to assess, itself, whether the alternative measures (not the SPS
measures at issue) meet the appropriate level of protection. The Panel's task was not to review a
determination made by a national authority on that question or any other, but to rule on whether the
alternative measures proposed by New Zealand w ould achieve Australia's appropriate level of
protection. It could only conclude that this was so on the basis of affirmative findings that
New Zealand had made out its case, rather than on negative findings, such as that New Zealand had
"cast doubt" upon Australia's risk assessment. More over, in making its own assessment of the case
presented by New Zealand, the Panel was free, within the limits of its duty to make an objective
assessment, to structure its analysis as it deemed a ppropriate. Thus, it was not obliged, in considering
the risk associated with the alternative measure, to adopt the same methodology or structure as that
employed by the IRA in its pest risk analysis.
356. In considering further the Panel's approach to analyzing whether New Zealand's proposed
alternative measures meet Australia's appropriate level of protection, we note that the Panel repeatedly
stated that it had to be careful not to "slip into conducting a de novo review".
523 The Panel's caution
was, however, misplaced. Caution not to conduct a de novo review is appropriate where a panel
reviews a risk assessment conducted by the impor ting Member's authorities in the context of
Article 5.1. However, the situation is different in the context of an Article 5.6 claim. The legal
question under Article 5.6 is not whether the aut horities of the importing Member have, in conducting
the risk assessment, acted in accord ance with the obligations of the SPS Agreement. Rather, the legal
question is whether the importing Member could have adopted a less trade-restrictive measure. This
requires the panel itself to objectively assess, inter alia, whether the alternative measure proposed by
the complainant would achieve the importing Member's appropriate level of protection. The fact that,
in the present case, the alternative measures proposed by New Zealand in the context of its claim
under Article 5.6 had also been assessed in the IRA di d not alter the nature of the Panel's task under
Article 5.6.
357. The Panel's flawed two-step approach is ma nifest throughout the Panel's analysis of
New Zealand's Article 5.6 claim. For instance, with r espect to fire blight, at the outset of its analysis
of the alternative measure proposed by New Zealand, the Panel devoted multiple pages to the "first
step" of its analysis, engaging in a lengthy re-capitu lation of the various findings that it had made in
its Article 5.1 analysis 524 before concluding that "for the purposes of its Article 5.6 claim
New Zealand has made the case that Australia's IRA overestimates the fire blight risk resulting from

523Panel Report, para. 7.1193; see also paras. 7.1134 and 7.1135. Similarly, in the context of its
Article 5.6 analysis with regard to ALCM, the Panel stated that it "need[ed] to review Australia's IRA". ( Ibid.,
para. 7.1330)
524See Panel Report, paras. 7.1145-7.1153.

imports of New Zealand apples". 525 Yet whether the IRA had overestimated the fire blight risk was
not a constituent element of New Zealand's Article 5.6 claim, and was not responsive to the question
of whether New Zealand had affirmatively established that its alternative measure would achieve
Australia's appropriate level of protection. Furthe rmore, throughout the "second step" of its analysis,
the Panel repeatedly referred to, and couched its analysis in terms similar to those that it had used in,
its analysis under Article 5.1. For example, the Pane l recalled that it had, in its Article 5.1 analysis,
examined the IRA's assessment of whether mature , symptomless apples from New Zealand can carry
fire blight and found that the IRA "does not find su fficient support in the scientific evidence relied
upon and, accordingly, is not coherent and objective". 526 Similarly, the Panel surveyed a variety of
statements by its appointed experts, most of wh ich called into question th e IRA's assessment of
various risks, before finding that "the experts di d not consider that the IRA contains any adequate
scientific evidence to support the proposition that the introduction of fire blight via mature apple fruit
has occurred or could occur." 527 The structure of the Panel's analysis of the proposed alternative
measure for ALCM is similar. At the conclusion of that analysis, the Panel states that, "[i]n assessing
the second condition of the Article 5.6 test, the Pane l had to review whether New Zealand has made a
prima facie case that its alternative measure wo uld achieve" Australia's appropriate level of
protection.528 The Panel then states, in the next sentence, that "[i]n this dispute the Panel needs to
review Australia's IRA, not conduct its own risk assessment". 529 To us, this statement reveals the
fundamental flaw in the Panel's approach, namely, that the Panel seems to have assumed that, because
it could not conduct its own risk assessment, the only way that it could evaluate New Zealand's
Article 5.6 claim was by relying upon its review of the IRA. This was an incorrect understanding of
its task.
358. For all these reasons, we consider that the Panel' s approach to its analysis of New Zealand's
Article 5.6 claim was in error. Because the Pa nel unduly relied on findings that it had made in
reviewing the IRA under Article 5.1 and failed to fi nd affirmatively that New Zealand's alternative
measures would meet Australia's appropriate level of protection, the Panel's Article 5.6 finding lacks a
proper legal basis. We therefore find that the Panel erred in concluding that New Zealand had raised a

525Panel Report, para. 7.1153. (emphasis added) The Panel seems to have considered that this first step
was necessary because, "if the [IRA's] assessment of risk is exaggerated, there may be reason to believe that the
measures that are designed to prot ect against that risk [(that is, th e contested measures)] may also be
exaggerated—or too strict". ( Ibid., para. 7.1142) Thus, the Panel appears to have viewed the first step as a
different way of testing the trade-restrictiveness of Australia's fire blight measures. However, Article 5.6 of the
SPS Agreement prescribes a specific means for testing the trad e-restrictiveness of a contested SPS measure,
namely, through an analysis of possibl e alternative measures that are apt to achieve the same objectives, that is,
by testing whether there is a reasonably available, significantly less trade-restrictive alternative.
526Panel Report, para. 7.1157.
527Panel Report, para. 7.1186.
528Panel Report, para. 7.1329.
529Panel Report, para. 7.1330.

presumption that restricting imports of New Zealand apples to mature, symptomless apples was an
alternative measure with respect to fire blight that would meet Australia's appropriate level of
protection
530; and erred in concluding that New Zealand had made a prima facie case that the
inspection of a 600-fruit sample of each import lot w ould be an alternative m easure with respect to
ALCM that would meet Australia's appropriate level of protection.531
359. Accordingly, we reverse the Panel's finding, in paragraphs 7.1403 and 8.1(e) of its Report,
that Australia's measures at issue regarding fire blig ht and ALCM are inconsistent with Article 5.6 of
the SPS Agreement. Having reversed this finding, we must consider whether, in order to promote the
prompt settlement of this dispute, we are able to complete the analysis and rule on New Zealand's
claim under Article 5.6.
(b) Completion of the Analysis
360. At the outset, we recall that under Article 5.6 of the SPS Agreement it is for the complainant
to establish a prima facie case that there is an alternative measure that satisfies all three applicable
conditions.532 Accordingly, a complainant must demonstr ate that a proposed alternative measure to
the measure at issue: (i) is reasonably ava ilable taking into account technical and economic
feasibility; (ii) achieves the Member's appropriate le vel of sanitary or phyto sanitary protection; and
(iii) is significantly less restrictive to trade than the contested SPS measure.533
361. The Panel found that the first condition and the th ird condition were met for both fire blight
and ALCM. These findings are not appealed. Ther efore, the only question before us is whether
New Zealand's alternative measures would achieve Australia's appropriate level of protection.
362. Australia asserts that a complainant can only be found to have satisfied the second condition
under Article 5.6 when the evidence that it has addu ced establishes that a "p roper" risk assessment,
conducted by the importing Member, "would necessarily have concluded that the alternative measure
would achieve" that Member's appropriate level of protection.534

532Appellate Body Report, Japan – Agricultural Products II, para. 126.
533Panel Report, para. 7.1098 (referring to Appellate Body Report, Australia – Salmon, para. 194; and
Appellate Body Report, Japan – Agricultural Products II, para. 95).

363. We have difficulties accepting this formulati on of the burden of proof that applies under
Article 5.6. In contrast to Article 5.1, which expressly provides that an SPS measure must be based
on a risk assessment, Article 5.6 contains no explicit reference to or requirement for a risk assessment.
Moreover, while Article 5.1 directly concerns th e actual SPS measure, Article 5.6 addresses that SPS
measure via a comparison with a hypothetical alterna tive measure. The function of Article 5.6 is to
ensure that SPS measures are not more trade rest rictive than necessary to achieve a Member's
appropriate level of protection. Compliance with this requirement is tested through a comparison of
the measure at issue to possible alternative m easures. Such alternatives, however, are mere
conceptual tools for the purpose of the Article 5. 6 analysis. A demonstration that an alternative
measure meets the relevant Member's appropriate leve l of protection, is reasonably available, and is
significantly less trade restrictive than the existing me asure suffices to prove th at the measure at issue
is more trade restrictive than necessary. Yet this does not imply that the importing Member must
adopt that alternative measure or that the alternative measure is the only option that would achieve the
desired level of protection.
364. This, too, is consistent with the view that a complainant pursuing a claim under Article 5.6 is
not required to undertake or furnish a risk assessment relating to the alternative measure proposed. At
the same time, we cannot conceive of how a comp lainant could satisfy its burden of demonstrating
that its proposed alternative measure would meet the appropriate level of protection under Article 5.6
without relying on evidence that is scientific in natu re. The objective of ensuring protection against
risks to human, animal or plant life or health is key to SPS measures, to a Member's appropriate level
of protection, and to the SPS Agreement as a whole. Furthermore, the basic obligations set out in
Article 2—which inform the more specific obliga tions in Article 5—include the stipulation in
Article 2.2 that SPS measures must be based on sci entific principles and not maintained without
sufficient scientific evidence. Th is implies that evidence demonstr ating that a proposed alternative
measure takes adequate account of these key characteristics of SPS measures will necessarily form
part of a complainant's attempt to prove that a contested SPS measure fails to meet the requirements
of Article 5.6. In our view, this is also reinfor ced by the important role that science plays throughout
the SPS Agreement in maintaining "the delicate and car efully negotiated balance in the
SPS Agreement between the shared, but sometimes competi ng, interests of promoting international
trade and of protecting the life and health of human beings."535
365. Thus, although a complainant is not required to do so, it is free to rely upon a risk assessment
as a source of evidence relevant to its proposed altern ative measure, if such a risk assessment exists.
Moreover, elements of the importing Members' risk assessment as well as other factual elements

outside that risk assessment may be relevant in seek ing to establish that an alternative measure meets
the appropriate level of protection.
536
366. Overall, the totality of the evidence identified a nd/or adduced by the complainant will have to
be sufficient to establish a presumption that the alternative measure would meet the appropriate level
of protection. Whether such evidence su ffices to meet the burden of establishing a prima facie case
will necessarily vary fro m measure to measure and from case to case.
537 A panel's assessment of
whether this burden has been met is a matter of legal characterization and not a scientific assessment
of risk that must conform to the first three paragraphs of Article 5.
(i) Whether the Appellate Body can complete the analysis with
respect to New Zealand's alternative measure for fire blight
367. We now turn to the question of whether, using the correct approach to the analysis under
Article 5.6, we can complete the analysis of New Zealand's claim that Australia's measures
concerning the risk of fire blight are inconsistent with Article 5.6. When the factual findings of the
panel and the undisputed facts in the panel record provide the Appellate Body with a sufficient basis
for its own analysis, the Appellate Body may comple te the analysis with a view to facilitating the
prompt settlement of the dispute.538
368. In keeping with this approach, we must ascer tain whether the factual findings made by the
Panel and undisputed facts in the record demonstr ate that New Zealand h as established that its
proposed alternative measure would meet Australia's appropriate level of protection. In particular, we
must ascertain whether the Panel made relevant factual findings or whether there are sufficient
undisputed facts on the Panel record that would allow us to: (i) identify the level of protection that
Australia has set as its appropriate level; (ii) determine what level of protection would be achieved by
New Zealand's alternative measure; and (iii) determ ine whether the level of protection that would be
achieved by the alternative measure would satisfy Australia's appropriate level of protection.
369. With these considerations in mind, we turn to examine relevant factual findings made by the
Panel with respect to the risk associ ated with the alternative measure of restricting imports of apples
to mature, symptomless fruit. We note first that the Panel has made factual findings identifying the
level of protection set by Australia, namely, that Australia's appropriate level of protection is

536Appellate Body Report, Australia – Salmon, paras. 209-213.
537Appellate Body Report, US – Wool Shirts and Blouses, p. 14, DSR 1997:I, 323, at 335.
538See Appellate Body Report, Australia – Salmon , paras. 209, 212, 241, and 255; Appellate Body
Report, Korea – Dairy, para. 102; Appellate Body Report, Canada – Autos, paras. 133 and 144; Appellate Body
Report, Korea – Various Measures on Beef , para. 128; and Appellate Body Report, US – Continued Zeroing ,
para. 189.

expressed in qualitative terms, and that it is identified in the IRA as "providing a high level of sanitary
or phytosanitary protection aimed at reducing risk to a very low level, but not to zero". 539 We recall,
in this regard, that Annex A(5) to the SPS Agreement equates the appropriate level of protection with
the "acceptable level of risk". Australia's appropr iate level of protection refers to both concepts,
describing the level of protection sought as "high", and the acceptable level of risk as "very low".
Australia's risk estimation matrix, which the IRA su ggests is representative of Australia's policy on its
acceptable level of protection 540, makes clear that Australia's tole rance for "very low" risk is a
standard that is stricter than standards that woul d tolerate "moderate", "hi gh", or "extreme" risk, but
not as strict as standards that would tolerate only "negligible" risk.
370. Second, we consider whether the Panel made relevant factual findings or if there are sufficient
undisputed facts on the Panel record that would allow us to determine whether New Zealand has made
a prima facie case with respect to the level of protecti on that would be achieved by its proposed
alternative measure and, if so, whether Australia has successfully rebutted that presumption. In this
context, we recall that the alternative measure proposed by New Zealand with respect to fire blight is
the same as what the IRA considered "unrestricted risk", namely, imports of mature, symptomless
apples.541
371. New Zealand submitted before the Panel that mature, symptomless apples do not provide a
pathway for transmitting fire blight, and that, theref ore, the risk that mature, symptomless apples
would transmit fire blight is negligible. 542 In particular, New Zealand adduced evidence in support of
the following propositions:

539Panel Report, paras. 7.963, 7.1121, and 7.1136. The Panel referred to the description of this
appropriate level of protection in the Import Risk Analysis Handbook (2003) (Panel Exhibit AUS-10), p. 5, and
the Import Risk Analysis Handbook (2007), p. 8 and Annex 3, and also observed that, in connection with its
former, "similar qualitative ALOP", the AQIS had explai ned that Australia's quarantine policy is based on the
concept of the management of risk to an acceptably lo w level. (Panel Report, f ootnote 2552 to para. 7.963
(quoting 1998 AQIS Import Risk Analysis Process Handbook, p. 11))
540The IRA rejected the submission by a stakeholde r that the IRA's risk estimation matrix and
associated methodology does not represent Australia's policy on its acceptable level of risk, and observed, in this
respect, that governmental discussion of this issue had produced agreement that the "policy framework
surrounding ALOP, including practical guidelines for risk analysis which illustrate the concept of a risk
estimation matrix, adequately meets Australia's present needs". (IRA, Part B, pp. 4 and 5) Australia's risk
estimation matrix is reproduced at paragraph 147 of this Report.
541See supra, footnote 481 to para. 330 of this Report.
542New Zealand's first written submissi on to the Panel, para. 4.8. New Zealand made this submission
in the context of its claim under Article 2.2 and referred back to it in the context of its claim under Article 5.6 at
para. 4.499.

− Fire blight bacteria are not found internally in mature, symptomless apples; they are
only rarely found externally and then only in limited quantities.
543
− Any fire blight bacteria found externally on mature, symptomless apples are unlikely
to survive post-harvest handling, storage, and transportation in quantities sufficient to
initiate infections.544
− Fruit would not be contaminated with fire blight during harvest, handling, storage,
and transportation.545
− Even if external fire blight bacteria su rvived handling, processing, and transport of
New Zealand apples to Australia, they would not be transmitted to a susceptible host
in Australia.546
372. Before the Panel, New Zealand also emphasized that the panel in Japan – Apples reviewed
the relevant scientific literature and found that the risk of mature, symptomless apples transmitting
fire blight was negligible.547

543New Zealand's first written submission to the Panel, paras. 4.11-4.16 (referring to R.G. Roberts,
"Evaluation of buffer zone size and inspection number reduction on phytosanitary risk associated with fire
blight and export of mature apple fruit" (2002) 590 Acta Horticulturae 47-53 (Panel Exhibit NZ-20); C.N. Hale,
E.M. McRae, and S.V. Thomson, "Occurrence of Erwinia amylovora on apple fruit in New Zealand" (1987) 217
Acta Horticulturae 33-40 (Panel Exhibit NZ-21); R.G. Roberts, C.N. Hale, T. van der Zwet, C.E. Miller, and
S.C. Redlin, "The potential for spread of Erwinia amylovora and fire blight via commercial apple fruit; a
critical review and risk assessment" (1998) 17(1) Crop Protection 19-28 (Panel Exhibit NZ-22); R.K. Taylor,
C.N. Hale, W.R. Henshall, J.L. Armstrong, and J.W. Marshall, "Effect of inoculum dose on infection of apple
(Malus domestica) flowers by Erwinia amylovora" (2003) 31 New Zealand Journal of Crop and Horticultural
Science 325-333 (Panel Exhibit NZ-23); J. Dueck, "Survival of E. amylovora in association with mature apple
fruit" (1974) 54 Canadian Journal of Plant Science 349-351 (Panel Exhibit NZ-96); and R.G. Roberts,
S.T. Reymond, and R.J. McLaughlin, "Evaluation of mature apple fruit from Washington State for the presence
of E. amylovora" (1989) 73 Plant Disease 917-921 (Panel Exhibit NZ-97)).
544New Zealand's first written submission to the Panel, paras. 4.17-4.19 (referring to C.N. Hale and
R.K. Taylor, "Effect of co ol storage on survival of Erwinia amylovora in apple calyxes" (1999) 489 Acta
Horticulturae 139-143 (Panel Exhibit NZ-24); and R.K. Taylor and C.N. Hale, "Cold storage affects survival
and growth of Erwinia amylovora on the calyx of apple" (2003) 37(4) Letters in Applied Microbiology 340-343
(Panel Exhibit NZ-25)).
545New Zealand's first written submission to the Panel, paras. 4.20 and 4.21 (re ferring to S.C. Ockey
and S.V. Thomson, "Influence of rain on transient populations of Erwinia amylovora on leaf surfaces" (2006)
704 Acta Horticulturae 113-119 (Panel Exhibit NZ-26)).
546New Zealand's first written submission to the Panel, paras. 4.22-4.26 (referring to C.N. Hale,
R.K. Taylor, and R.G. Clark, "Ecology and epidemiology of fire blight in New Zealand" (1996) 411 Acta
Horticulturae 79-85 (Panel Exhibit NZ-27); R.K. Taylor, C.N. Hale, F.A. Gunson, and J.W. Marshall,
"Survival of the fire blight pathogen, Erwinia amylovora , in calyxes of apple fruit discarded in an orchard"
(2003) 22 Crop Protection 603-608 (Panel Exhibit NZ-28); and R.G. Roberts and A.J. Sawyer, "An updated
pest risk assessment for spread of Erwinia amylovora and fire blight via commercial apple fruit" (2008) 27 Crop
Protection 362-368 (Panel Exhibit NZ-29)).
547New Zealand's first written submission to the Pa nel, para. 4.9 (referring to Panel Report, Japan –
Apples, para. 8.153).

373. Australia, on the other hand, contended befo re the Panel that New Zealand's proposed
alternative measure, the restriction of imports to mature, symptomless apples, had already been
factored into the IRA's assessment, and that th e IRA had nevertheless concluded that the risk
associated with this scenario was "low", which is in excess of Australia's appropriate level of
protection of "very low". 548 Australia asserted that the IRA was a valid risk assessment within the
meaning of Article 5.1, and that, therefore, the Panel must find that a requirement to limit imports to
mature, symptomless apple fruit would not achieve Au stralia's appropriate level of protection without
further risk management measures. Australia also emphasized that the Panel's two appointed experts
on fire blight, Dr. Paulin and Dr. Deckers, had bot h expressed the view that restricting imports to
mature, symptomless apples would not be sufficient to reduce the risk to a level that would achieve
Australia's appropriate level of protection. 549 Australia therefore contended that New Zealand had
failed to show that the restriction of imports to mature, symptomless apples would achieve Australia's
appropriate level of protection in respect of fire blight. Australia also asserted that the Panel's
appointed experts had confirmed that Australia's principal measures for fire blight—symptomless
orchards and disinfection—are warranted. 550 In response to New Zealand's reference to the findings
of the panel in Japan – Apples, Australia contended that there are significant differences in the present
dispute relating to the appropriate level of protection, climatic co nditions, native flora, potential host
plants, the pest and disease status of the impor ting and exporting Members, and the volume and mode
of trade.551
374. New Zealand responded that Australia had misrepr esented the experts' responses, and that the
experts had in fact confirmed the lack of scientif ic evidence for the pathwa ys at issue and for the
conclusions in the IRA. In particular, New Zeal and contended that the e xperts had confirmed that
several of the main importation steps in the IRA lacked scientific evidence and that Australia's
conclusion as to the percentage of New Zealand apples that will be contaminated with fire blight was
unjustified. New Zealand further submitted that th e experts confirmed that there is no scientific
evidence of the transfer of the fire blig ht pathogen from apples to susceptible hosts. 552 In addition,
New Zealand pointed out that many of the experts' comments were directed at reducing the likelihood
of apples being imported into Australia with fire bl ight bacteria on them, but that this component of
risk was not the most relevant one. Instead, New Zealand argued that the expert testimony did not
provide "general support" for Australia's fire blight measures in relation to the overall risk, namely,

548Australia's first written submission to the Panel, para. 1084 (referring to IRA, Part B, pp. 104, 105,
and 150).
549Australia's second written submission to the Panel, paras. 451 and 452.
550Australia's closing statement at the second Panel meeting, paras. 30 and 31.
551Australia's first written submission to the Panel, para. 26.
552New Zealand's response to Panel Question 126 after the second Panel meeting, para. 203.

the risk of entry, establishment and spread of fire blight combined with an assessment of
consequences.
553
375. In seeking to complete the analysis of wh ether New Zealand successfully established a prima
facie case that the level of protection achieved by the alternative measure would meet the appropriate
level of protection, we must assess whether the Pane l made findings with respect to the substance of
the four propositions raised by New Zealand. To the extent that the Panel made findings regarding
the testimony of the Panel's experts, the analysis in the IRA, or scientific studies considered in the
IRA, it may be appropriate to take such findi ngs into account for the purpose of assessing whether
New Zealand has made out a prima facie case and whether Australia has rebutted that prima facie
case.
376. We note that the Panel record contains numerous pieces of evidence relating to the risk of fire
blight, including scientific studies, the IRA's anal ysis and the evidence it refers to, as well as the
testimony of the Panel's appointed experts. Although New Zealand presented to the Panel various
pieces of evidence in support of its contention that the risk associated with th e alternative measure of
restricting imports of apples to mature, symptomless fruit is negligible, the Panel referred, in passing,
to only a few of these pieces of evidence, and did not make express findings regarding this evidence
in its analysis of whether New Zealand had succes sfully raised a presumption that the alternative
measure concerning the risk of fire blight would meet Australia's appropriate level of protection.
377. The first proposition put forward by New Zealand was that fire blight bacteria are not found
internally in mature, symptomless apples, and that they are rarely found externally and then only in
limited quantities. Australia accepted that, when dealing with mature, symptomless apples, the
primary risk is with external (epiphytic) infestati on rather than with internal (endophytic) fire blight
infection.554 Thus, the Panel focused on the question of exte rnal (epiphytic) fire blight infestation in
mature, symptomless apples. The Panel quoted from the expert testimony of Dr. Deckers and
Dr. Paulin on this question, which it understood to indicate that "fire blight is not a truly epiphytic
bacteria, and would be present on apple surfac es only in residual populations, diminishing over
time".555 It seems that, in pointing to this testimony , the Panel was inclined to accept New Zealand's
first proposition that fire blight bacteria are not f ound internally in mature, symptomless apples, and
that they are rarely found externally and then onl y in limited quantities. However, the Panel made no
explicit finding to that effect.

553New Zealand's response to Panel Question 126 after the second Panel meeting, para. 205.
554The Panel also reproduced testimony from Dr. Deckers and Dr. Paulin explaining that
endophytically infected fruit could not develop into mature, symptomless apples. (Panel Report, paras. 7.1160
and 7.1161)
555Panel Report, para. 7.1164.

378. Second, New Zealand contended that any residua l fire blight bacteria found externally on
mature, symptomless apples are unlikely to survive post-harvest handling, storage, and transportation
in quantities sufficient to initiate infections. We note that the Panel found in the context of its analysis
under Article 5.1 that evidence cited by the IRA conf irms that disinfection—a routine procedure in
the packing house—can have a significant impact on reducing bacterial population 556, and that its
appointed experts agreed that disinfection would result in "strongly" 557 reducing the risk of survival of
the epiphytic population and a "sharp" 558 decrease in the level of bacterial population. However, it is
not clear to us whether, or to what extent, this di sinfection is part of standard post-harvest, storage,
and transportation procedures. While the Panel's appointed experts agreed that disinfection would
result in strongly decreasing bacterial population, th e Panel did not make a finding on whether all
apples for export from New Zealand are disinfected.
379. Third, New Zealand maintained that fruit would not be contaminated with fire blight during
harvest, handling, storage, and transportation. In that respect, we note that the Panel quoted from
Dr. Paulin's testimony to the effect that , due to the poor epiphytic properties of Erwinia amylovora,
the likelihood that apples entering packing houses fre e of the bacterium would become contaminated
during processing was "very unlikely in practical conditions" or "negligible"
559, and that the likelihood
of clean fruit being contaminated during palletiza tion, quality inspection, containerization, and
transportation was "nil ... for symptomless mature apples". 560 It seems that, in pointing to this
testimony, the Panel was inclined to accept New Zealand's third proposition that fruit would not be
contaminated with fire blight during harvest, hand ling, storage, and transportation. However, the
Panel made no explicit finding to that effect.
380. Fourth, New Zealand submitted that, even if ex ternal fire blight bacteria survived the
handling, processing, and transport of New Zealand apples to Australia, they would not be transmitted
to a susceptible host in Australia. In this regard, we note that the Panel reviewed various statements
by Dr. Deckers and Dr. Paulin regarding th e potential for transfer and spread of Erwinia amylovora.
The experts characterized this in various ways, including "extremely low" 561, "hard to imagine", "a
difficulty impossible for the bacteria to tackle in natural conditions" 562, "very low" 563, "difficult to

556Panel Report, para. 7.303.
557Panel Report, para. 7.302 (quoting Dr. Deckers' response to Panel Question 28, Panel Report,
Annex B-1, para. 204).
558Panel Report, para. 7.302 (quoting Dr. Paulin's response to Panel Question 28, Panel Report,
Annex B-1, para. 206).
559Panel Report, para. 7.1167.
560Panel Report, para. 7.1168.
561Panel Report, paras. 7.1171 and 7.1176.
562Panel Report, para. 7.1172.
563Panel Report, paras. 7.1171 and 7.1173.

prove"
564, "rather low" 565, "questionable"566, and "rather exceptional". 567 The Panel understood these
responses to "indicate that the likelihood of fire b light spreading through mature, symptomless apples
is very low".568
381. The Panel went on to quote a number of othe r statements by these two experts downplaying
the risk associated with mature, sy mptomless apples relative to other wa ys of transmitting fire blight.
The Panel then found that, overall, Dr. Deckers' and Dr. Paulin's testimony demonstrates that they
consider the overall risk of entry, establishment and spread of fire blight through mature, symptomless
apples imported from New Zealand to be "very low". 569 It seems that the Panel may have agreed with
this assessment, although it did not affirmatively say so.
382. Finally, with respect to associated poten tial biological and economic consequences,
New Zealand argued before the Panel that, in ranki ng the consequences of establishment and spread
of fire blight as "high", the IRA overestimated these consequences. According to New Zealand, a
more realistic assessment, relying on the actual expe rience of countries where fire blight is present,
would have resulted in the overa ll consequences being "very low". 570 Subsequently, New Zealand
recognized that fire blight can have serious con sequences. In New Zealand's view, however, "the
important thing to bear in mind is that the disease is not spread by exports of mature fruit".571
383. In this respect, the Panel reviewed Dr. Paulin's and Dr. Deckers' expert testimony and
observed that, according to these experts, the IRA "h as a tendency to overestimate the severity of the
consequences of fire blight", in particular with r espect to the criteria of plant life or health and of
domestic trade or industry, to which the IRA as signed the most severe scores of "F" and "E". 572 The
Panel concluded in the light of that assessment by the experts, that the IRA's evaluation of the
potential consequences associated with the unrestrict ed risk scenario (that is, the import of mature,
symptomless apples) did not rely on adequate scientific evidence. 573 The Panel did not, however,
make any finding or express any view of its own on the consequences associated with the entry,
establishment and spread of fire blight in Australia.

564Panel Report, para. 7.1174.
565Panel Report, para. 7.1176.
566Panel Report, para. 7.1177.
567Panel Report, para. 7.1178.
568Panel Report, para. 7.1181. (emphasis added)
569Panel Report, para. 7.1192.
570New Zealand's first written submission to the Panel, para. 4.264.
571Panel Report, para. 7.452 (quoting New Zealand's response to Panel Question 67 after the first Panel
meeting, para. 141). See also New Zealand's second written submission to the Panel, paras. 2.455 and 2.456.
572Panel Report, para. 7.469.
573Panel Report, para. 7.470.

384. We note that the Panel also specifically asked the experts the question whether restricting
imports to mature, symptomless apples would achie ve Australia's appropriate level of protection. 574
We have certain reservations about the Panel having done so, given that this was the ultimate question
that the Panel was charged with answering pursuant to Article 5.6. Experts may assist a panel in
assessing the level of risk associated with SPS m easures and potential alternative measures, but
whether or not an alternative measure's level of risk achieves a Member's appropriate level of
protection is a question of legal characterization, the answer to which will determine the consistency
or inconsistency of a Member's measure with its obligation under Article 5.6. Answering this
question is not a task that can be delegated to sc ientific experts. We also have more practical
concerns, namely, that the Panel did not identify Au stralia's appropriate level of protection in its
question to the experts, or clarify or explain what it understood the content of that level to be. Nor did
the experts, in their replies, elaborate their understanding of Australia's appropriate level of protection.
In such circumstances, and irresp ective of the propriety of the question, the answers provided by the
experts can be of only limited utility.575
385. In the light of the above, we find that there is a sufficient basis in the Panel record to find that
Australia's appropriate level of protection is "p roviding a high level of sanitary or phytosanitary
protection aimed at reducing risk to a very low level, but not to zero". 576 Turning to the issue of the
risk associated with New Zealand's proposed altern ative measure, we have observed that the Panel
reviewed a fair amount of evidence relevant to th is issue. Ultimately, however, the Panel discussed
but did not make findings on much of this evid ence, nor on the specific propositions put forward by
New Zealand, nor on New Zealand's contention that the relevant risk was "negligible". There are
some suggestions that the Panel may have considered certain elements of the risk associated with the

574Panel Question 15, Panel Report, Annex B-1.
575In reviewing the responses of the experts to its que stion, the Panel understood the various statements
made by Dr. Paulin to mean that he considered that the proposed alternative measure "renders the risk extremely
low and akin to the risk of the bacteria making its way from New Zealand to Australia on air jet or some other
mode of transport not connected to trade in apples". (Panel Report, para. 7.1190) In addition, although
Dr. Deckers responded that the proposed alternative m easure was not enough to meet Australia's appropriate
level of protection, the Panel found that , overall, Dr. Deckers' and Dr. Paulin's testimony demonstrates that they
consider the overall risk of entry, establishment and spread of fire blig ht through mature, symptomless apples
imported from New Zealand to be very low—both overall and in regard to specific key points in the import
scenario assessed by the IRA. ( Ibid., para. 7.1192) The Panel explained why it considered that Dr. Deckers'
statement supported the conclusion that the proposed alternative measure was sufficient to meet Australia's
appropriate level of protection, even though Dr. Deckers said it would not. The Panel, however, did not explain
why it read Dr. Paulin's statement to suggest that the risk of fire blight entry, establishment and spread
associated with the alternative measure was "very low", when Dr. Paulin ha d stated he considered the risk to be
"extremely low".
576Panel Report, paras. 7.963, 7.1121, and 7.1136.

importation of mature, symptomless apples to be "very low". The Panel also reproduced extensive
testimony from its appointed experts suggesting th at the certain risks were of a much smaller
magnitude than "very low". However, we cannot read any of these suggestions as affirmative
findings. What is more, there is no indication as to what the Panel considered to be the overall risk
associated with the alternative measu re for fire blight proposed by New Zealand, that is, the risk of
entry, establishment and spread, as well as potential biological and economic consequences. We are,
therefore, unable to identify suffi cient uncontested facts or factual fi ndings by the Panel to enable us
to make a finding on the level of risk associated with New Zealand's alternative measure for fire
blight. It follows that we cannot make the n ecessary comparison between the level of protection
offered by New Zealand's alternative measure and Aust ralia's appropriate level of protection, and thus
cannot complete the legal analysis with respect to the second condition of Article 5.6 of the
SPS Agreement.
(ii) Whether the Appellate Body can complete the analysis with
respect to New Zealand's alternative measure for ALCM
386. We now turn to the question of whether we can complete the analysis of New Zealand's claim
that Australia's ALCM measure is in consistent with Article 5.6. In keeping with the approach set out
above, we must ascertain whether the factual findi ngs made by the Panel and undisputed facts on the
record demonstrate that New Zealand's proposed alternative measure for ALCM satisfies the second
condition of Article 5.6. In particular, we must ascertain if there are re levant Panel findings and
sufficient undisputed facts on the Panel record to en able us to determine what level of protection
would be achieved by the alternative measure , and whether New Zealand has made out a prima facie
case that the level of protection that would be ach ieved by the alternative measure would meet
Australia's appropriate level of protection and, if so, whether Australia h as successfully rebutted that
presumption.
387. We recall that Australia's appropriate level of protection is "providing a high level of sanitary
or phytosanitary protection aimed at reducing risk to a very low level, but not to zero".
577 We next
consider what level of protection would be ach ieved by the alternative measure proposed by
New Zealand. We recall, in this connection, that the Australian measure alle ged to be inconsistent
with Article 5.6 is Measure 14, which c onsists of two options. These options are either the inspection
of each lot of apples on the basis of a 3000-fruit sample for ALCM, with detection of any live

577Panel Report, paras. 7.963, 7.1121, and 7.1136.

quarantineable arthropod resulting in appropria te treatment or rejection for export; or the option of
mandatory appropriate treatment (fumigation) of all lots plus inspection of each lot on the basis of a
600-fruit sample.578
388. The alternative measure proposed by New Zeal and consists of inspection of a 600-fruit
sample from each import lot and treatment (fumigation) in the event that ALCM is found. Thus,
New Zealand's alternative was the same as the first option of Australia's Measure 14, except that the
sample size in New Zealand's alternative measure ( 600 fruit) was smaller than the sample size in the
first option of Measure 14 (3000 fruit).
579 We note that the IRA expressly considered this alternative
measure as a possible risk management option, follo wing its determination that the unrestricted risk
exceeded Australia's appropriate level of protection. 580 Further, the IRA assumed that fumigation
would be 100 per cent effective in killing the ALCM present on fruit.581
389. Regarding the question of what level of prot ection could be achieved by the alternative
measure, we note that New Zealand submitted before the Panel that there is a negligible risk of
transmission and establishment of ALCM with insp ection of a 600-fruit sample (and remedial action
where appropriate). In particular, New Zeal and adduced evidence relating to the following
propositions582:
− The level of infestation of viable AL CM cocoons on New Zealand apples is not
biologically significant.583
− Fruit would not become contaminated with ALCM during harvest, handling, and
transportation to the packing house.584

578This inspection is to check for pests other than ALCM. (IRA, Part B, p. 321)
579The participants confirmed, at th e oral hearing in this appeal, that under New Zealand's proposed
alternative measure with a 600-unit sample size, detection of any live quarantineable arthropod would also result
in appropriate treatment or rejection for export.
581IRA, Part B, p. 188.
582New Zealand adduced this evidence in the context of its claim under Article 2.2 and referred back to
it in the context of its claim under Article 5.6 at paragraph 4.517 of its first written submission to the Panel.
583New Zealand's first written submissi on to the Panel, paras. 4.107-4. 111 (referring to A.R. Tomkins,
D.J. Wilson, S.O. Hutchings, and S. June, "A survey of Apple Leafcurling Midge ( Dasyneura mali )
management in Waikato Orchards", Proceedings of the 47th New Zealand Plant Protection Conference (1994)
(Panel Exhibit NZ-43), pp. 346-349; and D.H. Todd, "The Apple Leafcurling Midge, Dasyneura mali Kieffer,
Seasonal History, Varietal Susceptibility and Parasitism" (1959) 2 New Zealand Journal of Agricultural
Research, 859-869 (Panel Exhibit NZ-44).
584New Zealand's first written submission to the Panel, paras. 4.112-4.115 (referring to IRA, Part B,
p. 163).

− Any infestation of New Zealand apples will be at so low a level that the establishment
of ALCM in Australia is extremely unlikely.
585
390. In response, Australia contended that the IR A had assessed the altern ative measure proposed
by New Zealand, but found that a 600-fruit inspection system alone would not reduce the risks
associated with ALCM sufficiently to achieve Australia's a ppropriate level of protection.
586 Australia
also relied upon aspects of testimony of the Panel's appointed ALCM expert, Dr. Cross, as supporting
the IRA's views: (i) with respect to the infesta tion rates and the limited data available regarding the
occupancy and viability of cocoons on New Zealand apples; (ii) that whether a particular infestation
level would be enough to initiate a colony depende d on a sufficient number of imported apples being
simultaneously located within sufficient proximity to apple trees; (iii) that the period of emergence is
variable and not necessarily as long as claimed by New Zealand; and (iv) that the flight ranges of
ALCM identified in the IRA were reasonable. 587 Australia also considered that the Panel's experts
largely endorsed the IRA's reco mmended risk management measures and, with respect to ALCM,
recognized that the best existing data indicated that the 600-unit inspection sample proposed by
New Zealand, because it was insuffici ently sensitive, would not reduce th e risk to a level that would
meet Australia's appropriate level of protection.588
391. In response, New Zealand took issue with the IR A's analysis of the level of unrestricted risk
of ALCM and the effect of a 600 -fruit sample inspection, highligh ting flaws in the methodology of
the IRA, as well as the IRA's failure to consider th e factors of cocoon viability, ALCM flight range,
and normal trade practices. 589 New Zealand further responded that Australia had misrepresented the
experts' responses, and that the Panel's experts had in fact confirmed the lack of scientific evidence for
the pathways at issue and for the conclusions in th e IRA. In particular, New Zealand contended that
Dr. Cross did not express the view that the intensity of any inspection would need to be determined by
reference to more reliable data with respect to fact ors such as viability. He explained that the sample
size for inspection should be selected on the basis of the appropriate level of protection, rather than

585New Zealand's first written submission to the Panel, paras. 4.116-4.132 (referring to IRA, Part B,
p. 171); D.M. Suckling, J.T.S. Walker, P.W. Shaw, L. Manning, P. Lo, R. Wallis, V. Bell,
W.R.M. Sandanayaka, D.R. Hall, J.V. Cross, and A.M. El-Sayed, "Trapping Dasineura mali (Diptera:
Cecidomyiidae) in Apples" (2007) 100(3) Journal of Economic Entomology 745-751 (Panel Exhibit NZ-15);
and R.T. Baker, J.M. Cowley, D.S. Harte, and E.R. Frampton, "Development of a Maximum Pest Limit for Fruit
Flies (Diptera: Tephritidae) in Produce Im ported into New Zealand" (1990) 83(1) Journal of Economic
Entomology 13-17 (Panel Exhibit NZ-46)).
586Australia's first written submission to the Panel, paras. 1089-1098 (referring to IRA, Part B,
pp. 188-190; and Methodologies for sampling of consignments (2008) (ISPM No. 31, FAO, Rome) (Panel
Exhibit AUS-30)).
587Australia's second written submission to the Panel, paras. 624, 625, 633, 635, 636, 644, 657, 658,
and 673.
588Australia's closing statement at the second Panel meeting, paras. 30 and 32.
589New Zealand's second written submission to the Panel, para. 2.899.

being adjusted to fit the infestation rate. New Zealand further submitted that Dr. Cross also confirmed
that this was not the approach used in the IRA. The IRA used the in festation level, rather than an
identified tolerance level, as the key determinant th at led to selection of a risk management measure
that would result in fumigation of virtually every apple, effectively taking a zero-risk approach.590
392. We note that New Zealand presented to the Pane l various pieces of evidence in support of its
proposition that the risk associated with the altern ative measure of requiring inspection of a 600-fruit
sample from each import lot is negligible. Thus, th e relevant evidence before the Panel consisted of
evidence presented by New Zealand, testimony of the appointed experts, the IRA, and evidence
discussed in the IRA.
393. In seeking to complete the analysis of wh ether New Zealand successfully established a
prima facie case that the level of protection achieved by the alternative measure would meet the
appropriate level of protection, we must assess whether the Panel made findings with respect to the
substance of the three propositions raised by New Zealand.
394. First, New Zealand argued that the level of infestation of viable ALCM cocoons on
New Zealand apples is not biologically significant. More specifically, New Zealand argued that
seasonal population development results in a low numbe r of occupied cocoons and that the parasitic
wasp Platygaster demades negatively affects ALCM in New Zealand resulting in a high number of
cocoons that are empty or contain dead pupae. The Panel criticized th e IRA for assessing the
likelihood that picked apple fruit is infested w ith ALCM based on the estimated number of apples
with cocoons.591 In doing so, the Panel referred to Dr. Cross' statement that "[i]f only 25% of cocoons
contain viable ALCM then the values should be 4 times smaller". 592 The Panel also referred to
Dr. Cross' statement that, in order to arrive at the actual infestation rate when calculating the
appropriate sample size for inspection for ALCM, the "infestation rate would [have to] be reduced by
a factor 0.5 × 0.7 for reduced viability and parasitism and probably by a further factor of 0.1 – 0.5 for
the protracted emergence relative to the short life span". 593 The Panel further relied on Dr. Cross'
statement that, based on the above values, "actual e ffective infestation rates of 0.1% or even 0.05%
would be more realistic". 594 In addition, the Panel found that "New Zealand has made a prima facie
case that an infestation rate more in the ra nge found in the August 2005 data would be more

590New Zealand's response to Panel Question 126 after the second Panel meeting, paras. 209 and 210.
591Panel Report, para. 7.801.
592Panel Report, para. 7.801 (quoting Dr. Cross' response to Panel Question 109, Panel Report,
Annex B-1, para. 650).
593Panel Report, para. 7.1325 (quoting Dr. Cross' response to Panel Question 104, Panel Report,
Annex B-1, paras. 624-627).
594Panel Report, para. 7.1325 (quoting Dr. Cross' response to Panel Question 104, Panel Report,
Annex B-1, paras. 624-627).

realistic"
595 than the infestation rate originally estimated by the IRA, in the light of the various factors
that the IRA did not properly take into account.596
395. Having reviewed the above statements of the Pa nel and references to its appointed experts'
testimony, it is not clear to us what significance the Panel attached to this evidence. It seems that, in
pointing to Dr. Cross' testimony, and his statement that the infestation rate should be reduced by a
factor of "0.5 × 0.7 ... and probably by a further fact or of 0.1 – 0.5", the Panel may have been inclined
to accept New Zealand's first proposition that the le vel of infestation of viable ALCM cocoons on
New Zealand apples is not biologically significant. Yet it made no express finding on this issue.
396. Second, New Zealand submitted that fruit w ould not become contaminated with ALCM
during harvest, handling, and transportation to the packing house, because at the time of harvest, there
are few young and actively growing leaves (norma lly associated with ALCM), ALCM eggs will
already have hatched, and most larvae will be in cocoons.597 The Panel made no findings with respect
to this proposition.598
397. Third, New Zealand contended that any infesta tion of New Zealand apples will be at so low a
level that the establishment of ALCM in Austra lia is extremely unlikely. More specifically,
New Zealand argued that most New Zealand apples w ill be consumed or decay before the emergence
of ALCM pupae, because cold storage of apples afte r packaging mimics environmental conditions in
autumn and winter, and any pupae attached to apples would enter into a delayed developmental stage
of diapause and would emerge only when the climatic conditions n ecessary for emergence have been
met. Even if ALCM did emerge in the harvest period, there would be no young, actively growing
apple leaves available on which to lay eggs.599
398. The Panel appeared to accept New Zealand's contention that Australia's packing house
practices make it "highly unlikely" that a large nu mber of deposited apples w ould be left uncovered,
as well as Dr. Cross' statement that ALCM are "weak fliers [and] it seems unlikely that [they] would
have a very long range of dispersal". 600 Thus, the Panel found that New Zealand had demonstrated
that with the "worst case" infestation level, several thousand apples (15,000-19,000 apples) imported
from New Zealand would need to be deposited uncove red for a sufficiently long period of time for

595The two data sets used by the IRA in assessing the risk associated with ALCM are explained supra,
para. 156 of this Report.
596Panel Report, para. 7.1360.
597New Zealand's first written submission to the Panel, para. 4.114.
598This proposition is not listed among the ones assessed by the Panel in paragraph 7.788 of its Report.
The Panel's review of the expert testimony in the context of Article 5.6 also makes no reference to it.
599New Zealand's first written submission to the Panel, paras. 4.117-4.120.
600Panel Report, para. 7.1313.

any ALCM transmission to occur. The Panel found that New Zealand had made a "convincing case"
that this situation would "probably almost never occur". 601 It is not clear to us what level of
probability the Panel is referring to in using th e terms "will probably almost never occur". The
Panel's finding could perhaps be read as accep ting New Zealand's third proposition, that the
establishment of ALCM in Australia is "extremely unlikely". However, as the Panel qualifies its
finding in two different ways, using the terms "probably" and "almost", and does not mention the term
"extremely unlikely", we are not confident that this is, in fact, what the Panel found.
399. We note that the Panel also specifically asked the experts a question concerning the IRA's
conclusion that the alternative measure of requiring inspection of a 600-fruit sample from each import
lot would not achieve Australia's appropriate level of protection. 602 We have already expressed
certain reservations about such questions by the Panel. 603 In any event, the sp ecific question asked by
the Panel was a composite one containing various elem ents. Neither the Panel, in its question, nor the
experts, in their responses, identified Australia's appr opriate level of protection or clarified what they
understood to be the content of that standard. The experts' responses also contained a number of
different elements, and it is not readily apparent which parts of them go to the issue of the relationship
between the alternative measure and Australia's appropriate level of protection.
400. In any event, the Panel reviewed the responses of the experts to this question. The Panel
made reference to Dr. Cross' statement that the IRA's flawed risk analysis should be recalculated
taking into account the factors that it had not proper ly considered, that some of these factors were
crucial for establishing the appropriate sample size for the inspection requirement and that, once this
was done, it might be found that the unrestricted risk estimates "fall [ ] below" Australia's appropriate
level of protection.604 Furthermore, the Panel noted that Dr. Deckers was sceptical about the need for
fumigating all New Zealand apples for ALCM. 605 However, for the reasons set out above, we do not
think that it was appropriate for the Panel to attach significance to these particular statements by the
experts.
401. With respect to the potential biological a nd economic consequences associated with ALCM,
New Zealand argued that the IRA's analysis overstates the likely consequences of ALCM. 606 I n

601Panel Report, para. 7.1312.
602Panel Question 120, Panel Report, Annex B-1.
603Supra, para. 384 of this Report.
604Panel Report, paras. 7.1323 and 7.1324 (quoting Dr . Cross' response to Panel Question 120, Panel
Report, Annex B-1, paras. 684-687; and Transcript of the Panel's meeting with the scientific experts, Panel
Report, Annex B-2, Dr. Cross, para. 663).
605Panel Report, para. 7.1326.
606Panel Report, para. 7.872 (referring to New Z ealand's second written submission to the Panel,
paras. 2.768 and 2.784).

New Zealand's view, "Australia's purported analys is of the 'associated potential biological and
economic consequences' of ALCM constitutes no thing more than a listing of unsubstantiated
assumptions."
607 The Panel reviewed the testimony of its appointed experts and, in particular, quoted
Dr. Cross' statement that "some of the terms us ed [in Australia's methodology for assessing impacts]
are relativistic and are not clearly defined". 608 The Panel also noted that Dr. Cross considered that
effects of ALCM infestation on skin finish and fru it quality set out in the IRA had not been reported
elsewhere and were "extraordinary". 609 The Panel found that the IRA, which classified the overall
biological and economic consequences of ALCM as "low", had a tendency to overestimate the
severity of ALCM consequences.610
402. In the light of the above, we observe that th e Panel reviewed a fair amount of evidence
relating to the issue of the risk associated with New Zealand's proposed alternative measure.
Ultimately, however, the Panel discussed, but did no t clearly make findings on much of this evidence
nor on the specific propositions put forward by New Z ealand in support of its claim under Article 5.6.
The Panel seems to have considered that, under th e alternative measure of requiring inspection of a
600-fruit sample from each import lot, transmission of ALCM to a susceptible host plant would
"probably almost never occur". The Panel also reproduced testimony from its appointed experts
suggesting that certain other risks were difficult to calculate, or had not been calculated. However, we
cannot read any of these suggestions as affirmative fi ndings. In addition, there is no indication as to
what the Panel considered to be the overall risk associated with the alternative measure relating to
ALCM proposed by New Zealand, that is, the risk of entry, establishment and spread of ALCM, as
well as the associated potential biological and economic consequences. We are, therefore, unable to
identify sufficient uncontested facts or factual finding s by the Panel to enable us to make a finding on
the level of risk associated with New Zealand's al ternative measure for ALCM. It follows that we
cannot make the necessary comparison between the level of protection offered by New Zealand's
alternative measure and Australia's appropriate level of protection. We therefore cannot complete the
legal analysis with respect to the second condition of Article 5.6 of the SPS Agreement.
3. Australia's Remaining Allegations of Error
403. As we have reversed the Panel's finding that Au stralia's measures regarding fire blight and
ALCM are inconsistent with Article 5.6 of the SPS Agreement, there is no need for us to consider the

607Panel Report, para. 7.872 (quoting New Zealand's first written submission to the Panel, para. 4.377).
608Panel Report, para. 7.879 (quoting Dr. Cross' response to Panel Question 96, Panel Report,
Annex B-1, para. 556).
609Panel Report, para. 7.881 (quoting Dr. Cross' response to Panel Question 96, Panel Report,
Annex B-1, para. 560).
610Panel Report, para. 7.883.

other arguments put forth by Australia in support of its appeal of these Panel findings, namely:
(i) that the Panel misapplied the rules governing th e burden of proof by requiring New Zealand to
demonstrate only that its proposed alternative measures "might" or "may" achieve Australia's
appropriate level of protection, instead of requiri ng New Zealand to demonstrate that they "would" do
so; (ii) that the Panel misinterpreted the word s "appropriate level of sanitary or phytosanitary
protection" in Article 5.6, because it assessed only the likelihood of entry, establishment and spread of
a pest and failed to assess the " associated potential biological and economic consequences"; and (iii)
that the Panel failed to make an objective assessment of the matter before it in the context of its
analysis of Article 5.6 of the SPS Agreement.611
404. We nevertheless make the following observations. First, with respect to the issue of burden
of proof, we consider—as, indeed, does Australia—t hat the Panel properly articulated the relevant
burden of proof when it stated that it would "assess whether New Zeala nd has adduced sufficient
evidence to raise a presumption that the proposed alternative measure would achieve Australia's
ALOP".612 Where the Panel erred, as we have expl ained above, was in importing reasoning and
findings relating to deficiencies in the IRA's reasoni ng from its analysis of New Zealand's Article 5.1
claim rather than undertaking an independent an alysis of New Zealand's Article 5.6 claim and
assessing the arguments and evidence before it in accordance with that burden of proof.
405. Second, we tend to agree with Australia that th e concept of "appropriate level of protection",
also referred to as the "acceptable level of risk", is informed by the meaning of "risk" in the phrase
"risk assessment" in Annex A(4), namely, an assessment of "the likelihood of entry, establishment or
spread of a pest or disease within the territory of an importing Member according to the sanitary or
phytosanitary measures which might be applied, and of the associated potential biological and
economic consequences". In other words, we accept that the "risk" associated with a pest or disease
may encompass "consequences". In any event, it is certainly the case that Australia has included
consequences in the appropriate level of prot ection that it has established, as evidenced by, inter alia,
its risk estimation matrix (reproduced supra, at paragraph 147 of this Report) and that, therefore, any
assessment of whether an alternative measure meets that appropriate level of protection must, to the
extent relevant, take account of the potential c onsequences associated with the entry, establishment
and spread of a pest.
406. Third, Australia asserts that the Panel failed to make an objective assessment of the matter
before it in the context of its analysis of Article 5.6 of the SPS Agreement613 and suggests that a panel

611Australia's appellant's submission, paras. 178 and 188(3).
613Australia's appellant's submission, paras. 178 and 188(3).

must, consistently with its "limited mandate" under Article 11 of the DSU, refrain from conducting its
own risk assessment to determine whether the alternative measure would achieve the appropriate level
of protection.
614 We are unsure precisely what Australia is claiming in invoking Article 11 in this
manner, and Australia does not present any arguments in support of this allegation. As the Appellate
Body has held, a challenge under Article 11 of the DS U must stand by itself and be substantiated with
specific arguments, rather than merely being put fort h as a subsidiary argument or claim in support of
a claim of a panel's failure to construe or a pply correctly a particular provision of a covered
agreement.615
C. Conclusion
407. In the light of the above, we reverse the Panel's finding, in paragraphs 7.1403 and 8.1(e) 616 of
the Panel Report, that Australia's measures at issue regarding fire blight and ALCM are inconsistent
with Article 5.6 of the SPS Agreement. We are, however, unable to complete the legal analysis of
New Zealand's claim under Article 5.6 of the SPS Agreement.
IX. New Zealand's Other Appeal – Annex C(1)(a) and Article 8 of the SPS Agreement617
408. We now turn to New Zealand's other appeal. New Zealand requests us to reverse the Panel's
finding that "New Zealand's claim under Annex C(1) (a) ... and its consequential claim under Article 8
of the SPS Agreement are outside of the Pane l's terms of reference in this dispute". 618 New Zealand
further requests us to complete the analysis with regard to its claims of undue delay.619
409. New Zealand contends that the Panel erred in finding that New Zealand's claims under
Annex C(1)(a) and Article 8 of the SPS Agreement were outside of the terms of reference. In
particular, New Zealand argues that the Panel erred in finding that the measure at issue in the context
of a claim of violation of the "undue delay" oblig ation in Annex C(1)(a) must necessarily be the
"procedure" referred to in the chapeau of Annex C(1)(a).620 The reference to "approval procedures" in
Annex C(1)(a) does not mean, according to New Zeal and, that such "approval procedures" must be

615Appellate Body Report, US – Steel Safeguards, para. 498.
616See also Panel Report, paras. 7.1197 and 7.1266 (with respect to fire blight), and paras. 7.1328
and 7.1365 (with respect to ALCM).
617We refer to "17" measures only in our analysis of the measures that New Zealand identified in its
panel request. (See infra, paras. 411 through 426 of this Report) However, when completing the legal analysis
and, ultimately, making our findings on this section of ou r Report, we refer to the "16" measures that are in
dispute since, as explained supra at paragraph 126 of this Report, the parties reached an agreement regarding
Measure 12 and New Zealand notified the Panel that it would no longer pursue its claims in relation to this
measure.
618Panel Report, para. 8.1(f).
619New Zealand's other appellant's submission, para. 29.
620New Zealand's other appellant's submission, para. 23.

identified as the measures at issue in the request for the establishment of a panel 621 nor, in
New Zealand's view, is there a requirement in the c overed agreements that the measure at issue must
directly cause the violation of the relevant obligations. 622 In finding that only those "procedures"
referred to in the chapeau of Annex C(1)(a) can be the measure at issue, the Panel improperly limited
the measures at issue by reference to the specifi c obligation being challenged, thus blurring the
distinction between measures and claims in Article 6.2 of the DSU. In New Zealand's view, however,
the 17 measures were an appropriate target for its Annex C(1)(a) and Article 8 claims because those
measures were not developed without undue delay.623
410. Australia, for its part, agrees with the Panel's ultimate finding that New Zealand's
Annex C(1)(a) and Article 8 claims fall outside the Pane l's terms of reference. In particular, Australia
considers that the Panel correctly found that the object of New Zealand's claims, namely, the "IRA
process", was not identified in the panel request and that the "IRA process" is a measure distinct from
the 17 measures challenged by New Zealand.624
A. Whether the Panel Erred in Finding that New Zealand's Claims under Annex C(1)(a)
and Article 8 of the SPS Agreement were Outside Its Terms of Reference
411. The Panel began its analysis by examining wh ether the measures relating to New Zealand's
claims under Annex C(1)(a) and Article 8 of the SPS Agreement fell within its terms of reference. 625
In answering this jurisdictional question, the Panel fi rst noted that the text of Annex C(1)(a) refers to
"procedures to check and ensure the fulfilment of SPS measures"626, and that the "IRA process" is the
type of procedure that, if unduly delayed, "might infringe Annex C(1)(a) of the SPS Agreement".627
412. The Panel then turned to th e issue of whether New Zealand had identified a relevant
procedure in its panel request. The Panel noted that the identified measures were limited to
the 17 measures listed in the bullet points in New Zeal and's panel request. Yet, the Panel was of the
view that New Zealand did not intend to challenge the content of the 17 measures "as such" but,
rather, that the target of New Zealand's claims w as the alleged delay in the "procedure leading to the
adoption of these 17 requirements".628 Since New Zealand's panel request did not specifically refer to
this procedure, the Panel concl uded that New Zealand had "not properly iden tified the measure at

621New Zealand's other appellant's submission, para. 17.
622New Zealand's other appellant's submission, paras. 9-12.
623New Zealand's other appellant's submission, para. 21.
624Australia's appellee's submission, paras. 10 and 11.
625Panel Report, para. 7.1443.
626Panel Report, para. 7.1463. (original emphasis)
627Panel Report, para. 7.1465.
628Panel Report, para. 7.1468.

issue in its panel request in the cont ext of its Annex C(1)(a) and Article 8"
629 claims, and that,
accordingly, these claims fell outside its terms of reference.630
413. We recall that earlier in the proceedings the Pane l had, in response to a request by Australia,
issued a preliminary ruling in which the Panel determined that the 17 measures identified by
New Zealand in its panel request were within the Pa nel's terms of reference and that no other measure
had been properly identified in the panel request. The Panel also found in its preliminary ruling that,
although it "would ideally have prefe rred a more explicit explanation of how or why the measures at
issue are considered by New Zealand to be viola ting the identified provisions of the SPS Agreement",
New Zealand had—based on the language used in th e panel request and on the specific content of the
provisions invoked—provided "enough information to adequately inform the responding party and
other WTO Members on the nature of the compla int and to allow the responding party to begin
preparing its defence". 631 The Panel subsequently declined to make a second preliminary ruling
requested by Australia on the specific issue of whether New Zealand's cl aims under Annex C(1)(a)
and Article 8 of the SPS Agreement were outside the Panel's terms of reference.632
414. Therefore, it seems that the preliminary ruling of the Panel determined that: the measures at
issue in this dispute were the 17 measures listed in the bullet points in New Zealand's panel request,
and nothing else; and that the relevant claims were the provisions cited by New Zealand in its panel
request, which include Article 8 and Annex C(1)(a) to the SPS Agreement. We observe that neither
party has appealed the Panel's preliminary ruling or its decision not to issue a second preliminary
ruling.
415. Against this backdrop, we begin our analysis w ith the text of Article 6.2 of the DSU, which
provides, in relevant part:
The request for the establishment of a panel shall ... identify the
specific measures at issue and provide a brief summary of the legal
basis of the complaint sufficient to present the problem clearly.
416. Article 6.2 of the DSU serves a pivotal function in WTO dispute settlement and sets out two
key requirements that a complainant must satisfy in its panel request, namely, the "identification of
the specific measures at issue, and the provision of a brief summary of the legal basis of the complaint

629Panel Report, para. 7.1474.
630Panel Report, paras. 7.1477 and 8.1(f).
631Preliminary Ruling of the Panel, 6 June 2008, Panel Report, Annex A-2, para. 11. (original
emphasis) We are puzzled, therefor e, by the Panel's statement at paragraph 7.1474 of its Report that
"New Zealand did not ... provide a brief summary of why and how these provisions could be infringed by
the 17 specific requirements at issue". (original emphasis)
632Panel Report, paras. 1.15 and 1.16.

(or the claims)". 633 Together, these two elements constitute the " matter referred to the DSB" 634, so
that, if either of them is not properly identified, the matter would not be within the panel's terms of
reference. Fulfilment of these requirements is not a mere formality. Rather, as the Appellate Body
has previously held, the elements that must be id entified serve a twofold purpose, namely: (i) they
form the basis for the terms of reference of panels , in accordance with Article 7.1 of the DSU; and
(ii) they ensure due process by informing the respondent and third participants of the matter brought
before a panel.635
417. Moreover, the two requirements in Article 6.2 of the DSU are distinct and "should not be
confused".636 In Guatemala – Cement I, the Appellate Body indicated that, because the panel read the
word "measure" in Article 6.2 of the DSU "as synonymous with allegations of violations" of the
covered agreements, the panel in that dispute had "blur[red] the distinction between a 'measure' and
'claims' of nullification or impairment of benefits". 637 Similarly, in EC – Selected Customs Matters ,
the Appellate Body determined that the panel—by read ing the term "measure at issue" in Article 6.2
in the light of the obligation allegedly violated —had blurred the distinction between measures and
claims.638 Accordingly, the measure at issue and th e claim are two distinct elements that a
complainant must identify in order to bring a matter properly within the terms of reference of a panel.
In checking that a complainant has complied "with both the letter and th e spirit of Article 6.2 of the
DSU"639, a panel must satisfy itself that both of these elements have been properly identified in the
panel request.
418. It is also well established that compliance with the requirements of Article 6.2 must be
determined on the face of the request for the establis hment of the panel and that "[d]efects [therein]
cannot be 'cured' in the subsequent submissions of the parties during the panel proceedings". 640 Such
submissions may be used only to confirm the meaning of the words used in the panel request and in
assessing whether there has been prejudice to the responding Member's ability to prepare its defence.
419. We have two main concerns with the Panel's approach to its analysis of New Zealand's claims
under Annex C(1)(a) and Article 8 of the SPS Agreement.

633Appellate Body Report, US – Carbon Steel, para. 125. (emphasis omitted)
634Appellate Body Report, US – Carbon Steel, para. 125. (emphasis added)
635See Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 108; Appellate
Body Report, US – Continued Zeroing , para. 161; Appellate Body Report, US – Carbon Steel , para. 126; and
Appellate Body Report, EC – Bananas III, para. 142.
636Appellate Body Report, EC – Selected Customs Matters, para. 132.
637Appellate Body Report, Guatemala – Cement I, para. 69. (original emphasis)
638Appellate Body Report, EC – Selected Customs Matters, para. 132.
639Appellate Body Report, EC – Bananas III, para. 142.
640Appellate Body Report, US – Carbon Steel , para. 127 (referring to Appellate Body Report, EC –
Bananas III, para. 143).

420. First, it appears to us that the Panel has conf lated the requirement to identify the measure at
issue with the requirement to identify the legal basis of the complaint (the claim). The Panel began its
analysis by formulating the question before it as whether the measures relating to New Zealand's
claims under Annex C(1)(a) and Article 8 were within the Panel's terms of reference.
641 The Panel
further considered that the 17 requirements, on th e one hand, and "their development", on the other
hand, are separate measures. 642 The Panel explained that its findings regarding the measures within
the Panel's terms of reference did not cover "t he procedure through which the requirements were
developed in the IRA process".643 The Panel then considered ways in which New Zealand could have
identified the measure alleged to infringe the obligation in Annex C(1)(a) and Article 8 of the
SPS Agreement.644 However, having focused its analysis entirely on which measures were or should
have been identified by New Zealand, the Panel we nt on to find that "New Zealand's Annex C(1)(a)
claim and its consequential claim under Article 8 of the SPS Agreement are outside of the Panel's
terms of reference in this dispute".645
421. As previously noted, measures and claims are distinct, and Article 6.2 sets out separate
requirements that must each be satisfied in a panel request in order for a matter to form part of a
panel's terms of reference. The Panel failed to take proper account of this key distinction between
measures and claims by, on the one hand, undertaking an analysis as to whether New Zealand had
identified the specific measure at issue in its panel request and, on the other hand, finding that it was
New Zealand's claims, not the measure, that were outside the Panel's terms of reference.
422. Second, we have concerns about the way in which the Panel analyzed whether New Zealand
had satisfied the requirement of identifying the specific measure at issue in its panel request. The
Panel described its approach as follows:
whether the 17 specific requirements at issue can violate
Annex C(1)(a) of the SPS Agreement, or alternatively, whether the
measure that could allegedly infringe Annex C(1)(a) is different from
these 17 specific requirements, and hence not properly identified in
New Zealand's panel request.646 (underlining added)
423. The Panel further asked " what does New Zealand challenge under Annex C(1)(a)? What,
according to New Zealand, causes the violation of Annex C(1)(a)?"647 The Panel, therefore, seems to
have understood that the question of whether th e 17 measures identified in the panel request can

641Panel Report, para. 7.1443.
642Panel Report, para. 7.1469.
643Panel Report, para. 7.1473.
644Panel Report, para. 7.1475.
645Panel Report, paras. 7.1477 and 8.1(f). (emphasis added)
646Panel Report, para. 7.1453.
647Panel Report, para. 7.1459. (original italics; underlining added)

violate, or cause the violation of, the obligation in Annex C(1)(a) and Article 8 of the SPS Agreement
was a jurisdictional question. We disagree with this approach by the Panel. For a matter to be within
a panel's terms of reference—in the sense of Articles 6.2 and 7.1 of the DSU—a complainant must
identify "the specific measures at issue" and the "leg al basis of the complaint sufficient to present the
problem clearly". Moreover, "a complaining Member enjoys certain discretion in the identification of
the specific measure at issue" 648 and "[a]s long as the specificity requirements of Article 6.2 are met,
[there is] no reason why a Member should be preclude d from setting out in a panel request 'any act or
omission' attributable to another Member as the measure at issue". 649 Article 6.2 of the DSU does not
impose any additional requirement, as the Panel's anal ysis implies, that a complainant must, in its
request for establishment of a panel, demonstr ate that the identifi ed measure at issue causes the
violation of, or can violate, the relevant obligation.
424. In this dispute, the Panel's analysis under Article 6.2 should have been confined to
determining what New Zealand had identified as the specific measures at issue and, separately, what
New Zealand had identified as the legal basis for its complaint (its claims). 650 The Panel had already
found in its preliminary ruling that New Zealand' s panel request identified the 17 measures, and
Annex C(1)(a) and Article 8 of the SPS Agreement as the basis for New Zealand's claims, and that,
therefore, this matter was within the Panel's terms of reference.651
425. By contrast, the question of whether the measures identified in the panel request can violate,
or cause the violation of, the obligation in Annex C(1)(a) and Article 8 is a substantive issue to be
addressed and resolved on the merits. Yet the Panel stopped its analysis at the jurisdictional stage.
The Panel never proceeded to an analysis of whether New Zealand had made a prima facie case that
the 17 measures, as identified by New Zealand in its panel request, were inconsistent with
Annex C(1)(a) and Article 8 of the SPS Agreement.
426. In the light of the above considerations, we conclude that the Panel erred in finding, at
paragraphs 7.1477 and 8.1(f) of its Report, that New Zealand's cl aim under Annex C(1)(a) and its
consequential claim under Article 8 of the SPS Agreement are outside the Panel's terms of reference in
this dispute. Accordingly, we reverse this finding.

648Appellate Body Report, EC – Selected Customs Matters, para. 149.
649Appellate Body Report, EC – Selected Customs Matters, para. 133. See also Appellate Body Report,
US – Upland Cotton , para. 263, where, in the context of the requ est for consultations, the Appellate Body held
that "requesting Members should enjoy a degree of discretion to identify, in their request for consultations under
Article 4.2, matters relating to the covered agreements for discussion in consultations".
650We have difficulty understanding why the Panel considered it useful to engage in an abstract
analysis of "what kind of precise language would have been appropriate for New Zealand to use" to identify, in
its panel request, a measure other than the measures that New Zealand did identify. (Panel Report, para. 7.1475)
651We also note the Panel's recognition at paragraph 11 of its preliminary ruling that New Zealand's
panel request did not prejudice "Australia's ability to defend itself in the course of the Panel's proceedings".

B. Completion of the Legal Analysis
427. New Zealand requests us to "complete the an alysis of New Zealand's undue delay claim".
652
Although New Zealand does not identify precisely what ruling it is seeking to obtain from us,
New Zealand does indicate that it "has challenged, under Annex C(1)(a), the undue delay in the
development of the [16] requirements specified in the IRA [as] set out in New Zealand's panel
request".
653 New Zealand adds that it "does not consider that Annex C(1)(a), properly interpreted,
precludes such a challenge, or requires that the measure at issue must necessarily be the expired IRA
process."
654
428. As a legal matter, we understand New Zealand's re quest for completion of the analysis to be
based on the following three propositions: (i) there is no requirement in the SPS Agreement that "for
every obligation, the measure at issue must necessarily directly cause the violation"655; (ii) the 16 SPS
measures at issue "are inextricably linked to the pr ocess by which they were developed; they were
not developed without undue delay, and they conti nue to impair benefits" 656; and (iii) delay is
"undue" when it "exceeds the time that is reasonably needed to check and ensu re the fulfilment of its
relevant SPS requirements".657
429. New Zealand also points to the following "key factual matters", which it asserts "are
uncontested", in support of its request for completion of the analysis 658: (i) the eight-year period it
took to complete the IRA 659; (ii) letters sent by AQIS shortly after the initiation of the IRA process
indicating that "the risk analysis will take approxi mately twelve months to complete", and that it
would conduct a routine process "based on consideration that this proposal is technically less complex
and does not require assessment of significantly grea ter or different risks than those ... previously
examined"660 by Australia's quarantine service; (iii) the recognition, in an Australian Government-

652New Zealand's other appellant's submission, para. 27; see also paras. 4 and 29.
653New Zealand's other appellant's submission, para. 3.
654New Zealand's other appellant's submission, para. 3.
655New Zealand's other appellant's submission, para. 11.
656New Zealand's other appellant's submission, para. 21.
657New Zealand's other appellant's submission, para. 28 (quoting Panel Report, EC – Approval and
658New Zealand's other appellant's submission, para. 28.
659New Zealand's other appellant's submission, para . 28 (referring to Panel Report, paras. 2.31
and 2.32; and Annex I of Australia's first written submission to the Panel).
660New Zealand's other appellant's submission, para. 28. See Letter from AQIS to New Zealand's
Ministry of Agriculture and Forestry, dated 25 February 1999; and additional letters to stakeholders regarding
the IRA, dated 15 April 1999 and 28 June 1999 (Panel Exhibit NZ-104).

mandated review of Australia's quarantine system , that "the delay is 'difficult to justify'" 661; and
(iv) the absence of any explanation of or justification for this delay by Australia.
430. In response, Australia argues that New Zealand's "substantive undue delay claim is based on a
misinterpretation of Annex C(1)", because the ordinary meaning of a procedure that checks and
ensures the fulfilment of SPS measures, within th e meaning of Annex C(1)(a), cannot be "the
equivalent of a procedure which 'develops' SPS me asures"—since the 16 measures at issue "were
adopted following and as a result of the IRA process".
662 Australia states that the Panel correctly
found that the object of New Zealand's challe nge under Annex C(1)(a) and Article 8 was the
"unjustifiably delayed development and a doption of the [16] SPS measures at issue" 663, and that the
development of the 16 measures at issue "was conceptually distinct" 664 from the SPS measures
themselves. Consequently, Australia concludes, th e 16 measures at issue do not correspond either to
the "procedure", or to the "SPS measures" referred to in the chapeau of Annex C(1)(a).665
431. Australia submits, in any event, that the A ppellate Body should not complete the legal
analysis given the "absence of any relevant fact ual findings made by the Panel" on this matter. 666 In
particular, New Zealand's argument that there was no explanation or justifi cation for this delay was
refuted in Australia's first written submission. As for New Zealand's reliance upon certain statements
from the domestic review of Australia's quarantin e system, Australia notes that it explained to the
Panel the context in which these statements were made.667
432. We turn, accordingly, to examine these provisions. Article 8 of the SPS Agreement states:
Members shall observe the provisions of Annex C in the operation of
control, inspection and approval procedures, including national
systems for approving the use of additives or for establishing
tolerances for contaminants in f oods, beverages or feedstuffs, and
otherwise ensure that their procedures are not inconsistent with the
provisions of this Agreement.

661New Zealand's other appellant's submission, para. 28. See New Zealand's second written submission
to the Panel, para. 2.935 (quoting One Biosecurity: A Working Partnership, the Independent Review of
Australia's Quarantine and Biosecurity Arrangements, Report to the Australia Government, 30 September 2008,
p. 100).
662Australia's appellee's submission, paras. 16 and 18. (original emphasis)
667Australia's appellee's submission, para. 20 (referring to Australia's response to Panel Question 127
after the second Panel meeting).

433. Annex C(1)(a) to the SPS Agreement provides, in relevant part:
ANNEX C
CONTROL, INSPECTION AND APPROVAL PROCEDURES
7
1. Members shall ensure, with respect to any procedure to
check and ensure the fulfilment of sanitary or phytosanitary
measures, that:
(a) such procedures are undertaken and completed without
undue delay and in no less favourable manner for imported
products than for like domestic products;
Annex C to the SPS Agreement, thus, gives meaning and content to Article 8, and, by the terms of that
Article, a violation of the obligations in Annex C will also entail a violation of Article 8.668
435. Many provisions of the SPS Agreement , such as Articles 2 and 5.1, focus directly on SPS
measures, as such. In contrast, the obligations of Annex C(1) and Article 8 are expressed as relating
to procedures. The text of Annex C(1) identifies the ty pes of procedures in respect of which the
obligations contained in subparagr aphs (a) through (i) apply, namely , "any procedure to check and
ensure the fulfilment of sanitary or phytosanitary measures". 669 Paragraph 1 of Annex C thus
establishes that there must be a link between the re levant "procedures" and "sanitary or phytosanitary
measures". The title to Annex C and the text of Article 8 shed further light on the types of procedures
that are subject to the various obligations set out in subparagraphs (a) through (i), by referring to
control, inspection, and approval procedures. Moreover, footnote 7 to the title of Annex C, as well as
Article 8, provide specific examples of such procedures. Footnote 7 mentions "procedures for

668Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1569; Panel Report, US –
Poultry (China), paras. 7.393-7.395.
669These obligations contained in Annex C(1) are: (a) that procedures be undertaken and completed
without undue delay and in a no less favourable manner than for like domestic products; (b) that processing of
applications be prompt and that processing periods be published; (c) that requests for information be limited to
what is necessary; (d) that confidentiality of informa tion be treated in a no less favourable manner than for
domestic products; (e) that requirements for control, inspection, and approval of individual specimens of a
product be limited to what is reasonable and necessary; ( f) that fees associated with the procedures be equitable
in relation to fees charged on domestic products and be not higher than the actual cost of the service; (g) that
the same criteria be used in the siting of facilities used in the procedures and the selection of samples of
imported products as for domestic products; (h) that for products modified subsequent to control and inspection,
the procedure be limited to what is necessary to determine whether there is adequate confidence that the product
still meets the regulations concerned; and (i) that a procedure exist to review complaints concerning the
operation of such procedures and to take corrective action when a complaint is justified.

sampling, testing and certification", and Article 8 refe rs to "national systems for approving the use of
additives or for establishing tolerances for contaminants in foods, beverages or feedstuffs".
436. Furthermore, Article 8 refers to "the operation of control, inspection and approval
procedures", and subparagraph (a) of Annex C(1) requires relevant procedures to be undertaken and
completed without undue delay. Since the procedures refe rred to in Annex C(1) are those that check
and ensure fulfilment of SPS measures, th is suggests that such measures exist prior to the operation,
undertaking, or completion of, the relevant pro cedures, as the latter seek to check and ensure
fulfilment with the former. As explained further below, the particular circumstances of this case make
it unnecessary for us to identify more comprehensiv ely the "SPS measures" and the "procedures" in
respect of which the obligations set out in Annex C(1) and Article 8 apply.670
437. Annex C(1)(a) contains an obligation that re levant procedures be undertaken and completed
"without undue delay". In this regard, the ordinary meaning of the word "delay" relates to "(a period
of) time lost by inaction or inability to proceed". 671 The term "undue" means something "that ought
not to be or to be done, inappr opriate, unsuitable, improper, unri ghtful, unjustifiable" or "going
beyond what is warranted or natu ral; excessive, disproportionate". 672 Thus, Annex C(1)(a) requires
Members to ensure that relevant procedures are unde rtaken and completed with appropriate dispatch,
that is, that they do not involve periods of time that are unwarranted, or otherwise excessive,
disproportionate or unjustifiable.
673 Whether a relevant procedure has been unduly delayed is,
therefore, not an assessment that can be done in the abstract, but one which requires a case-by-case

670We observe, in this regard, that the Panel consid ered that "the 'SPS measure' referenced in the
language of Annex C(1)(a) may be a requirement to conduct an import risk assessment prior to allowing for the
importation of goods that might pose sanitary or phytosanitary risks" and that, in such circumstances, "the actual
import risk assessment conducted for a specific good might constitute the procedure to check and ensure the
fulfilment of this 'SPS measure'." (Panel Report, para. 7. 1463) Thus, reasoned the Panel, "if unduly delayed, an
SPS approval procedure like the IRA process might in fringe Annex C(1)(a) of the SPS Agreement". ( Ibid.,
para. 7.1465 (referring to Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1336)) The
Panel did not, in its analysis, speci fically identify the relevant "SPS m easure" with which the IRA process
"check[ed] and ensur[ed] approval", although it did summarize the arguments of the parties, made on the
assumption that the IRA process (the relevant procedure) checked and ensured the fulfilment of Australia's
quarantine regime relating to the importation of fres h fruit and vegetables (the relevant SPS measure). ( Ibid.,
paras. 7.1431 and 7.1436) Due to the manner in whic h New Zealand presented its claims and identified the
measures at issue, it is unnecessary for us to decide whether the IRA process and Australia's quarantine regime
could constitute an "approval procedure" and an "SPS measure", respectively, within the meaning of
Annex C(1). Accordingly, we neither endorse, nor reje ct, the approach that the Panel seems to have been
inclined to accept.
671Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 1, p. 635.
672Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007),
Vol. 2, p. 3431.
673Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.1495. That panel appears
to have adopted a similar interpretation of "without undue delay" by stating that the obligation in Annex C(1)(a)
dictates that "approval procedures be undertaken and completed with no unjustifiable loss of time ". (emphasis
added)

analysis as to the reasons for the alleged failure to act with appropriate dispatch, and whether such
reasons are justifiable.
438. New Zealand's claims, in this case, raise the issue of what measures may violate the
obligation, set out in Annex C(1)(a) and Article 8, to undertake and complete relevant procedures
without undue delay. As we have seen, the obligation in Annex C(1)(a) requires Members to
commence, and to complete, specific procedures without undue delay. Thus, procedures are the
direct target of the relevant obligation and t hose procedures may themselves be the measure in
violation of that obligation. Yet, it does not follow that other types of measures are precluded,
a priori, from being an appropriate target of a clai m of inconsistency with Annex C(1)(a) and
Article 8. In our view, the obligation to ensure that relevant procedures are undertaken and completed
without undue delay may be infringed through measu res other than the control, inspection, and
approval procedures themselves, such as actions that prohibit, prevent, or impede undertaking and
completing such procedures "without undue delay", or omissions in the form of a failure to act
"without undue delay".
674 Such measures, even when they are not, themselves, procedures, could
equally give rise to a violation of Annex C(1)(a) and Article 8.
439. Accordingly, the question before us is wh ether the 16 measures, both as a whole and
individually, are inconsistent with the oblig ation in Annex C(1)(a) and Article 8 of the
SPS Agreement. The 16 measures at issue constitute speci fic requirements that New Zealand must
satisfy when exporting apples to the Australian market. All 16 measures possess a substantive content
and specify actions that New Zealand apple produ cers, exporters, and authorities must undertake and
comply with so that apples can be imported into Au stralia. However, it seems to us that, for purposes
of its claims under Annex C(1)(a) and Article 8, New Zealand does not challenge the substantive
content of the 16 measures at issue but, rather, the development of such measures. Yet the measures
themselves do not identify or specify the process lead ing to their adoption, or any steps in that
process. We do not see how, as New Zealand suggests, a simple reference to the 16 measures at issue,
in and of itself, can be read as a reference to the development of such measures.

674We note that, in previous disputes involving claims under Annex C(1)(a) and Article 8, panels have
been faced with measures other than procedures. In EC – Approval and Marketing of Biotech Products , the
panel dealt with a general de facto moratorium consisting of the suspension of consideration of applications for
approval, and a failure to consider specific applications for appr oval. (Panel Report, EC – Approval and
Marketing of Biotech Products , para. 7.47) In US – Poultry (China) , the measure at issue was a legislative
provision prohibiting any use of funds to allow for the importation of poultry products from China that, thereby,
impeded the undertaking and completion of a procedure that was "a prerequisite for the importation of [poultry]
products". (Panel Report, US – Poultry (China), paras. 7.92 and 7.152)

440. New Zealand also argues that "there is no re quirement ... that for every obligation, the
measure at issue must necessarily directly cause the violation". 675 We consider that the issue of
whether the measure at issue can "indirectly" cau se the violation of an obligation requires a case-
specific examination of the relevant obligation, as we ll as of whether the elements of the measure at
issue, or its effects, are capable of violating the obligation invoked. As we have already explained, we
believe that the measures that may violate the ob ligation in Annex C(1)(a ) and Article 8 include
relevant "approval, control and in spection procedures", governmental actions that impede or prevent
the undertaking or completion of such procedures, as well as failures to undertake or complete such
procedures with appropriate dispatch. New Zealan d has not argued that the 16 measures at issue are
any such type of measure and has not provided an y other arguments in support of its assertion that
these 16 measures, individually or as a whole, "dir ectly" or "indirectly" violate the "without undue
delay" obligation in Annex C(1)(a) and Article 8. Consequently, we do not see how the 16 measures
alone "directly" or "indirectly" are inconsistent with Annex C(1)(a) and Article 8. Nor are we
convinced that the links between the 16 measures at issue and the process through which they were
developed implies, as New Zealand contends, that the process forms part of the 16 relevant measures.
441. We recognize that, in ordinary circumstances, eight years is a very long period of time to
complete a risk assessment. We also agree with the panel in EC – Approval and Marketing of Biotech
Products that "a lengthy delay for which no adequa te explanation is provided might in some
circumstances permit the infere nce that the delay is 'undue'". 676 Yet, while the evidence to which
New Zealand points bears on the question of whethe r the "IRA process" was unduly delayed, such
"IRA process" is not a measure at issue in this disp ute. This evidence, therefore, does not establish
that the 16 measures at issue have not been undertaken or completed without undue delay, or that they
prevented or impeded the undertaking or completi on of other relevant procedures without undue
delay.
442. In the light of the above, we find that New Zealand has not established that the 16 measures at
issue are inconsistent with Australia's obligation under Annex C(1)(a) and Article 8 to undertake and
complete procedures that check and ensure fulfilment with SPS measures "without undue delay".
C. Conclusion
443. For all of the above reasons, we reverse the Panel's finding in paragraphs 7.1477 and 8.1(f) of
the Panel Report that New Zealand's claim under Annex C(1)(a) and its c onsequential claim under
Article 8 of the SPS Agreement fall outside of the Panel' s terms of reference; but find that

675New Zealand's other appellant's submission, para. 11.
676Panel Report, EC – Approval and Marketing of Biotech Products, para. 7.1496.

New Zealand has not established that the 16 measures at issue are inconsistent with Annex C(1)(a)
and Article 8 of the SPS Agreement.
X. Findings and Conclusions
444. For the reasons set out in this Report, the Appellate Body:
(a) upholds
 the Panel's finding, in paragraphs 7.172 and 8.1(b) of the Panel Report, that
the 16 measures at issue, both as a whole and individually, constitute SPS measures
within the meaning of Annex A(1) to the SPS Agreement;
(b) upholds the Panel's finding, in paragraphs 7.90 6 and 8.1(c) of the Panel Report, that
Australia's measures regarding fire blight and ALCM, as well as the general measures
relating to these pests, are inconsistent with Articles 5.1 and 5.2 of the SPS
Agreement, and that, by implication, these measures are also inconsistent with
Article 2.2 of the SPS Agreement;
(c) finds that Australia has not established that the Panel acted inconsistently with its
duty to conduct an objective assessment of th e matter before it, within the meaning of
Article 11 of the DSU;
(d) reverses the Panel's finding, in paragraphs 7.1403 and 8.1(e) of the Panel Report, that
Australia's measures at issue regarding fire blight and ALCM are inconsistent with
Article 5.6 of the SPS Agreement ; but is unable to complete the legal analysis of
New Zealand's claim under that provision; and
(e) reverses the Panel's finding, in paragraphs 7.14 77 and 8.1(f) of the Panel Report, that
New Zealand's claim under Annex C(1)(a) and its consequential claim under Article 8
of the SPS Agreement fall outside the Panel's term s of reference; but finds that
New Zealand has not established that the 16 measures at issue are inconsistent with
Annex C(1)(a) and Article 8 of the SPS Agreement.
445. The Appellate Body recommends
 that the DSB request Australia to bring its measures, found
in this Report and in the Panel Report as modified by this Report, to be inconsistent with the
SPS Agreement, into conformity with its obligations under that Agreement.

ANNEX I(a)

3 September 2010
 (10-4561)
 Original: English

 Notification of an Appeal by Australia under Article 16.4 and Article 17 of the
Understanding on Rules and Proce dures Governing the Settlement of Disputes (DSU), and under
Rule 20(1) of the Working Procedures for Appellate Review

 The following notification, dated 31 August 2010, from the Delegation of Australia, is being
circulated to Members.

Governing the Settlement of Disputes (DSU) and Rule 20 of the Working Procedures for Appellate
Review, Australia hereby notifies its decision to appeal to the Appellate Body certain issues of law
covered in the report of the Panel entitled (WT/DS367/R) (Panel Report) and certain legal interpretations developed by the
Panel.

2. Australia seeks review by the Appellate B ody of the following errors of law and legal
interpretation contained in the Panel Report:

(a) In ultimately finding in the Panel Report at [8.1](b) that the 16 measures at issue, both
as a whole and individually, constitute SPS measures, the Panel erred in its
interpretation and application of the defin ition of "sanitary or phytosanitary measure"
in Annex A(1) to the Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS Agreement). The error appears at [7.113]-[7.187] of the Panel
Report.
(b) In ultimately finding in the Panel Report at [8.1](c) that the measures imposed by
Australia for fire blight and apple leafcu rling midge (ALCM), as well as the general
measures, are inconsistent with the requirements of Arts 5.1 and 5.2 (and
consequently Art 2.2) of the SPS Agreement, the Panel erred in its interpretation and
application of what constitutes a proper "risk assessment". The errors appear at
[7.240-7.472], [7.473-7.510], [7.782-7.887] and [7.898-7.906] of the Panel Report.
(c) In ultimately finding in the Panel Report at [8.1](c) that the measures imposed by
Australia for fire blight and ALCM, as well as the general measures, are inconsistent
with the requirements of Arts 5.1 and 5. 2 (and consequently Art 2.2) of the SPS

Agreement, the Panel failed in the performance of its duty under Art 11 of the DSU to
make an "objective assessment of the matte r". The errors appear at [7.240-7.472],
[7.473-7.510], [7.782-7.887] and [7.898-7.906] of the Panel Report.
(d) In ultimately finding in the Panel Report at [8.1](d) that the measures imposed by
Australia for fire blight and ALCM are inc onsistent with the requirements of Art 5.6
of the SPS Agreement, the Panel relied upon its erroneous findings against the risk
assessments for fire blight and ALCM unde r Arts 5.1 and 5.2 (and consequently
Art 2.2) of the SPS Agreement in concluding that New Zealand's alternative measures
would achieve Australia's appropriate level of protection (ALOP). In addition to or in
the alternative, the Panel erred in its inte rpretation and application of Art 5.6, and
failed to make an "objective assessment of the matter" as required by Art 11 of the
DSU, in concluding that New Zealand' s alternative measures would achieve
Australia's ALOP. The errors appear at [7.1133-7.1197] and [7.1286-7.1331] of the
Panel Report.

ANNEX I(b)

27 September 2010
 (10-4894)
 Original: English

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

Corrigendum

 By letter of 16 September 2010, Australia re quested authorization from the Appellate Body,
pursuant to Rule 18(5) of the Working Procedures for Appellate Review , to amend its Notice of
Appeal dated 31 August 2010. No objections to Au stralia's request were received from New Zealand,
the third parties or the third participants. On 23 September 2010, the Division hearing the appeal
authorized Australia to amend its Notice of Appeal.

 Consequently, the reference to "[8.1](d)" in the first line of paragraph 2(d) should read
"[8.1](e)".

ANNEX II

15 September 2010

(10-4653)
 Original: English

Notification of an Other Appeal by New Zealand

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

 The following notification, dated 13 Septembe r 2010, from the Delegation of New Zealand, is
being circulated to Members.

Procedures Governing the Settlement of Disputes ("DSU") and Rule 23(1) of the Working
Procedures for Appellate Review , New Zealand hereby notifies its decision to appeal to the
Appellate Body certain issues of law covered in the Panel Report in (WT/DS367/R) ("Panel Report") and
certain legal interpretations developed by the Panel.
2. New Zealand seeks review by the Appellate Body of the Panel's legal conclusion that
New Zealand's claim under Annex C(1)(a) and its consequential claim under Article 8 of the
Agreement on the Application of Sanitary and Phytosanitary Measures ("SPS Agreement ")
are outside of the Pane l's terms of reference.
1 This conclusion is in error and is based on an
erroneous interpretation and appli cation of Annex C(1)(a) of the SPS Agreement and
Article 6.2 of the DSU.2

1Panel Report, para. 8.1(f).
2Panel Report, paras. 7.1443 to 7.1490.

ANNEX III

ORGANISATION MONDIALE ORGANIZACIÓN MUNDIAL
 DU COMMERCE DEL COMERCIO

APPELLATE BODY

AB-2010-2

Procedural Ruling

1. On 1 September 2010, the Appellate Body Divi sion hearing this appeal received a joint
request from Australia and New Zealand to allow obser vation by the public of the oral hearing in the
above appellate proceedings. The participants argued that nothing in the Understanding on Rules and
Procedures Governing the Settlement of Disputes (the "DSU") or the Working Procedures for
Appellate Review (the " Working Procedures") precludes the Appellate Body from authorizing public
observation of the oral hearing. The participants al so relied on the rulings by the Appellate Body in
five previous proceedings authorizing public observation of the oral hearing.
1
2. Australia and New Zealand consider that public observation of the oral hearings in past
appellate proceedings has strengthened the credib ility and legitimacy of the WTO dispute settlement
system, and that there should be continuation of this practice in circumstance s where the participants
in the appeal so agree. They also maintain that public observation has operated smoothly, and that the
rights of third participants who did not want their or al statements to be subject to public observations
have been fully protected. Australia and New Zeal and also indicated that their request was being
made on the understanding that any information that was designated as confidential in the documents
filed in the Panel proceedings would be adequately protected in the course of the hearing. Australia
and New Zealand considered that their proposed mo dality for the observation of the hearing by the
public, which accords with past practice of the A ppellate Body, would allo w for the protection of
information designated as confidential.
3. On 2 September 2010, we invited the third par ticipants to comment in writing on the request
of the participants. We received comments on 7 September 2010 from the European Union, the
Separate Customs Territory of Taiwan, Penghu, Ki nmen and Matsu, and the United States. These
third participants expressed their support for the request of the participants. Chile, Japan, and
Pakistan did not submit comments on the request.

1These proceedings are: United States – Continued Suspension of Obligations in the EC – Hormones
Dispute (WT/DS320/AB/R) and Canada – Continued Suspension of Obligations in the EC – Hormones Dispute
(WT/DS321/AB/R); European Communities – Regime for the Importation, Sale and Distribution of Bananas –
Second Recourse to Article 21.5 of the DSU by Ecuador (WT/DS27/AB/RW2/ECU) and European
Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of the
DSU by the United States (WT/DS27/AB/RW/USA); United States – Continued Existence and Application of
Zeroing Methodology (WT/DS350/AB/R); United States – Laws, Regulations and Methodology for Calculating
Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities
(WT/DS294/AB/RW); and United States – Measures Relating to Zeroing and Sunset Reviews – Recourse to
Article 21.5 of the DSU by Japan (WT/DS322/AB/RW).

4. We recall that requests to allow public observati on of the oral hearing have been made, and
have been authorized, in five previous appeals.
2 In its rulings, the Appellate Body has held that it has
the power to authorize such requests by the partic ipants, provided that this does not affect the
confidentiality in the relationship between the third pa rticipants and the Appellate Body, or impair the
integrity of the appellate process. The Appellate Body has reasoned that:
(a) The confidentiality rule in the first sentence of Article 17.10 of the DSU must be read
in the light of its context, particularly Article 18.2 of the DSU, which does not
preclude a participant from foregoing confidentiality and, instead, disclosing
statements of its own positions to the public. The third sentence of Article 18.2 states
that "Members shall treat as confidential information submitted by another Member
to the panel or the Appellate Body wh ich that Member has designated as
confidential." This provision would be redunda nt if Article 17.10 were interpreted to
require absolute confidentiality in respect of all elements of appellate proceedings,
and thus suggests that the confidentiality rule in Article 17.10 has limits.
(b) The confidentiality requirement in Article 17.10 operates in a relational manner.
Different sets of relationships are implicated in appellate proceedings, including: (i) a
relationship between the participants and th e Appellate Body; and (ii) a relationship
between the third participants and the A ppellate Body. The requirement that the
proceedings of the Appellate Body be confidential affords protection to these separate
relationships and is intended to safeguard the interests of the participants and third
participants, as well as the adjudicative function of the Appellate Body, so as to foster
the system of dispute settlement under conditions of fairness, impartiality,
independence and integrity. When partic ipants request to forego confidentiality
protection for their communications with the Appellate Body at the oral hearing, the
right to confidentiality of third participan ts vis-à-vis the Appellate Body is not
implicated, because such request does not extend to any communications, nor touch
upon the relationship, between the third participants and the Appellate Body.
(c) Pursuant to Rule 27 of the Working Procedures, the Appellate Body has the power to
exercise control over the conduct of the oral hearing, including authorizing the lifting
of confidentiality at the request of the participants provided that this does not
adversely affect the rights and interests of th e third participants or the integrity of the
appellate process. The active participation of third participants in oral hearings has
been fostered in the Working Procedures and in practice; yet the rights of third
participants are distinct from those of the participants in an appellate proceeding.
(d) Although certain elements of conf identiality are incapable of derogation
3, the
confidentiality of statements by participants at an oral hearing in an appeal is not of
such a nature.
5. We note that public observation in previous cases operated smoothly, and that the rights of
third participants who did not wish to have their oral statements made subject to public observation
have been fully protected.
6. In this appeal, Australia and New Zealand ha ve suggested that the Appellate Body allow
observation by the public of the oral hearing by means of simultaneous closed-circuit television

2See supra, footnote 1.
3For example, derogation from the situation contempl ated in the second sent ence of Article 17.10,
which provides that "[t]he reports of the Appellate Body shall be drafted without the presence of the parties to
the dispute and in the light of the information provided and the statements made", would impair the exercise,
integrity and independence of the Appellate Body's adjudicative function.

broadcasting. They have further suggested that pr ovision be made for transmission to be turned off
should the participants find it necessary to discuss issu es that involve information that was designated
as confidential by either participant in the documen ts filed with the Panel. We agree that such
modalities would operate to protect confidential informa tion in the context of a hearing that is open to
public observation, and would not have an adverse impact on the integrity of the adjudicative function
performed by the Appellate Body.
7. For these reasons, the Appellate Body Division hearing this appeal authorizes the public
observation of the oral hearing in these proceedi ngs on the terms set out below. Accordingly,
pursuant to Rule 16(1) of the Working Procedures, we adopt the following additional procedures for
the purpose of this appeal:
(a) The oral hearing will be open to public ob servation by means of simultaneous closed-
circuit television broadcast, shown in a separate room to which duly registered
delegates of WTO Members and members of the general public will have access.
(b) Oral statements and responses to questions by the third participants that have
indicated their wish to maintain the conf identiality of their submissions, as well as
any discussion of information that the pa rticipants designated as confidential in
documents submitted to the Panel, will not be subject to public observation.
(c) Any request by a third participant wishing to maintain the confidentiality of its oral
statements and responses to questions s hould be received by the Appellate Body
Secretariat no later than 12:30 p.m. Geneva time on Thursday, 7 October 2010

(d) An appropriate number of seats will be reserved for delegates of WTO Members in
the room where the closed-circuit television broadcast will be shown. WTO
delegates wishing to observe the oral hearing are requested to register in advance with
the Appellate Body Secretariat.
(e) Notice of the oral hearing will be provided to the general public on the WTO website.
Members of the general public wishing to ob serve the oral hearing will be required to
register in advance with the Appellate Body Secretariat, in accordance with the
instructions set out in the WTO website notice.

Geneva, 14 September 2010