CANADA – CONTINUED SUSPENSION OF OBLIGATIONS IN THE EC – HORMONES DISPUTE
Document: Report of the Panel Addendum
Date: 31 March 2008
Document codes: WT/DS321/R/Add.2; WT/DS321/R.
Complainant: EU
Respondent: Canada
Third parties: Australia, Brazil, China, Taiwan, India, Mexico, New Zealand, Norway, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. I, II  GATT 1994Art. 3.7, 22, 23.1, 23.2, 21.5  Dispute Settlement Understanding (DSU)

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

Report of the Panel

Addendum

 This addendum contains Annex B to the Re port of the Panel to be found in document
 The other annexes can be found in the following addenda:

 – Annex A: Add.1
 – Annex C: Add.3
 – Annex D: Add.4
 – Annex E: Add.5
 – Annex F: Add.6
 – Annex G: Add.7

ANNEX B

REPLIES OF THE PARTIES TO QUESTIONS POSED BY THE PANEL
AND OTHER PARTIES AFTER THE FIRST SUBSTANTIVE MEETING

Contents Page
Annex B-1 Replies of the European Co mmunities to questions posed by the
Panel after the first substantive meeting (3 October 2005)
B-2
Annex B-2 Replies of Canada to questi ons posed by the Panel after the first
substantive meeting (3 October 2005)
B-73
Annex B-3 Replies of Canada to questions posed by the European
Communities after the first substantive meeting (3 October 2005)
B-89

ANNEX B–1

REPLIES OF THE EUROPEAN COMMUNITIES TO QUESTIONS
POSED BY THE PANEL AFTER THE FIRST SUBSTANTIVE MEETING

(3 October 2005)

TABLE OF CASES

Short Title Full Case Title and Citation
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon,
, adopted 6 November 1998, DSR 1998:VIII, 3327
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft ,
, adopted 20 August 1999, DSR 1999:III, 1161
Canada – Aircraft
(Article 21.5 – Brazil)

Panel Report, Canada – Measures Affec ting the Export of Civilian Aircraft –
Recourse by Brazil to Article 21.5 of the DSU , , adopted
4 August 2000, as modified by the Appellate Body Report, ,
DSR 2000:IX, 4315
EC – Export Subsidies on
Sugar
Appellate Body Report, European Communities – Export Subsidies on Sugar ,
WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998,
DSR 1998:I, 135
EC – Sardines Appellate Body Report, European Communities – Trade Description of Sardines,
WT/DS231/AB/R, adopted 23 October 2002
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998,
DSR 1998:I, 9
Japan – Apples
(Article 21.5 – US)

Panel Report, Japan – Measures Affecting the Importation of Apples, Recourse to
Article 21.5 of the DSU by the United States, WT/DS245/RW, 23 June 2005
Korea – Procurement Panel Report, Korea – Measures Affecting Government Procurement ,
WT/DS163/R, adopted 19 June 2000, DSR 2000:VIII, 3541
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products
from the European Communities, WT/DS165/AB/R, adopted 10 January 2001
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, 1619
US – FSC
(Article 21.5 II – EC)
Appellate Body Report, United States – Tax Treatment for "Foreign Sales
Corporations" – Recourse to Article 21.5 of the DSU by the European
Communities, WT/DS108/AB/RW2, not yet adopted
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-
Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001,
DSR 2001:X, 4697
US – Offset Act
(Byrd Amendment

Appellate Body Report, United States – Continued Dumping and Subsidy Offset
Act of 2000, WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998,
DSR 1998:VII, 2755
US – Wool Shirts and Blouses Panel Report, United States – Measure Affecting Imports of Woven Wool Shirts
and Blouses from India , WT/DS33/R, adopted 23 May 1997, as upheld by the
Appellate Body Report, WT/DS33/AB/R, DSR 1997:I, 343

Q1. In their first submissions, Canada and the United States argue that the European
Communities could have had recourse to Article 21. 5 of the DSU. Could the EC explain why it
did not have recourse to Article 21.5 of the DSU? Did the EC consider seeking a decision of the
DSB abrogating the authorization to suspend concessions or other obligations granted to
Canada and the United States by the DSB on 26 July 1999? If not, why?

1. The European Communities considers that an implementing Member cannot have recourse to
Article 21.5 of the DSU in order to confirm th e WTO-consistency of its compliance measure. The
European Communities has already explained that the dispute settlement system is based on
contradictory proceedings where a WTO Member claims the inconsistency of a measure of another
WTO Member. On the other hand, the dispute settleme nt proceeding is not appropriate to request an
abstract confirmation of the consistency of a measure.
1
2. This understanding is confirmed by the very notion of the DSU as a "dispute" settlement
system. Moreover, this basic logic is also reflected in Articles 1.1, 3.3, 3.12, 4.4, 4.7 and 6 of the
DSU.
3. The WTO dispute settlement system is based on the "Understanding on Rules and Procedures
Governing the Settlement of Disputes". The word "dispute" indicates that the WTO proceedings are
designed to resolve differences between WTO members. Thus, the New Shorter Oxford English
Dictionary defines a "dispute", inter alia, as "a disagreement in which opposing views are strongly
held".2
4. Consequently, the DSU is not designed to seek an abstract confirmation of the WTO-
consistency of a measure in the absence of a ch allenge by another Member. Unlike other legal
systems, the DSU does not provide for an objectiv e procedure whereby a WTO Member could ask a
Panel for an opinion about its measure.
5. The structure and the definition of the scope of application of the DSU confirm this principle.
Under Article 1.1, the DSU
(…) shall apply to disputes brought pursu ant to the consultation and dispute
settlement provisions of the (…) [covered] agreements (…). The rules and procedures
of this Understanding shall also apply to consultations and the settlement of disputes
between Members concerning their rights and obligations under the provisions of (…)
this Understanding.
6. Thus, it is clear that the assertion "there is WTO-consistency (notably with the SPS
Agreement)" would not be a "dispute" related to rights and obligations under the DSU, but one related
to rights and obligations under the SPS Agreement. It would also not be possible to consider this as a
basis for a "dispute" under Article 11.1 of the SPS Agreement and Article XXIII:1(a), (b) or (c) of the
GATT. Therefore, the European Communities does not even see how the DSU would apply to such a
self-initiated procedure under Article 21.5 of the DSU.
7. Article 3.3 of the DSU further confirms that the dispute settlement system is based on
contradictory proceedings. Article 3.3 provides that:
The prompt settlement of situations in which a Member considers that any benefits
accruing to it directly or indirectly und er the covered agreement are being impaired
by measures taken by another Member is essential to the effective functioning of the

1 EC Oral Statement, para. 54.
2 The New Shorter Oxford English Dictionary, Vol. 1, 1993, p. 701.

WTO and the maintenance of a proper balan ce between the rights and obligations of
Members. (Emphasis added)
8. Thus, Article 3.3 assumes a scenario where one Member challenges the measure of another
Member because the complaining member considers its rights being affected. Conversely, Article 3.3
does not address the situation where a Member is co mplaining against its own measure. In fact, unless
one assumes that WTO members act in a schizophrenic manner they would not consider that "any
benefits accruing to it (…) are being impaired".
9. Furthermore, Articles 6, 3.12, 4.4 and 4.7 of the DSU have in common that they refer to a
"complaining party" and/or "a complaint". The use of these terms demonstrates again that the DSU is
based on contradictory proceedings.
3
10. The term "complaining party" derives from the word "to complain" which is defined in the
New Shorter Oxford Dictionary as "bewail, lament, express dissatisfaction, formal statement of a
grievance, bring a charge". 4 The European Communities fails to see how a Member who seeks
confirmation of the WTO-consistency of the measure could fall under this ordinary meaning of the
word. Indeed, this WTO-Member would just do the opposite of "complaining" against its measure.
11. The European Communities would note that the notion of a "complaining party" logically
also requires a "defending or responding party" (or in the words of the working procedures "the party
complained against"). Even if one assumes fo r the sake of the argument that the European
Communities could be a "complaining party" in a sel f-initiated Article 21.5 proceeding, the European
Communities fails to see how the United States a nd Canada could be considered as "defending
parties" or as "parties complained against". Certainly, the United States and Canada would not
"defend" the EC's compliance measure. In the same vein, the European Communities would not
consider the United States and Canada as parties ag ainst which it had brought a complaint against the
EC compliance measure. Also, a self-initiated Article 21.5 dispute would not cover the retaliatory
measures which the United States and Canada ar e applying against the European Communities,
because these measures are not the "measures take n to comply" over whose existence or WTO-
compatibility there is a disagreement.
12. In this context, the European Communities is also wondering whether the United States and
Canada as "defending party" would be obliged to pa rticipate in such proceedings. Indeed, in the only
ever self-initiated compliance proceeding ( EC – Bananas III – Article 21.5 (EC) ) the United States
(and other original complainants) explicitly refused to do so and the panel stated that it was unable to
force them to do so. Even in the current proceeding the United States did not explicitly confirm that it
would participate in an Article 21.5 proceeding if self-initiated by the European Communities.
13. In similar vein, Articles 6, 3.12 and 4.4 refer to the term " complaint". This word is defined in
the New Shorter Oxford Dictionary as "a lamentation, a plaint, a formal accusation or charge".
5 Yet,
by requesting an Article 21.5 compliance Panel, the European Communities would not make "a
plaint" or bring "a formal accusation or charge" against its own measure. Rather, the opposite is the
case.
14. In this context, it is also relevant to c onsider the past practice of WTO members in
Article 21.5 proceedings. Since the establishmen t of the WTO until August 2005 there have been
sixteen Article 21.5-proceedings. Fifteen out of th ese sixteen proceedings had been initiated by the
original complaining Party which disagreed with a compliance measure. All of these 15 proceedings

3 See also Article 9 of the DSU on multiple complainants.
4 The New Shorter Oxford English Dictionary, Vol. 1, 1993, p. 459.
5 The New Shorter Oxford English Dictionary, Vol. 1, 1993, p. 459.

worked in that they resulted in violation findings or in findings that the compliance measure was not
inconsistent with the invoked provisions. The onl y exception where the Article 21.5 proceeding has
been initiated by the original respondent was the case EC – Bananas III (Article 21.5 (EC)) . For the
reasons already mentioned above, this proceeding di d not work. Also, this report was never adopted
and it has therefore no legal status. Rather the non- adoption of this report confirms that the WTO
Members did not agree with the approach undertaken at the time by the European Communities. In
the European Communities' view, this subsequent prac tice is relevant for the correct interpretation of
Article 21.5 of the DSU in accordance with Article 31.3(b) of the Vienna Convention of the Law of
the Treaties.
15. Finally, an Article 21.5 proceeding initiated by the European Communities would not affect
the DSB authorization because an Article 21.5 panel only has jurisdiction to rule on the question of
compliance. It would certainly not make sense to go through an Article 21.5 process in order to
subsequently launch yet another case like the presen t one in order to challenge any continuing
sanctions.
16. In respect of the second half of the questi on on whether the European Communities sought a
DSB decision abrogating the DSB authorization, th e answer is no. The DSU does not provide for a
legal basis for the DSB to do so nor a decision-maki ng procedure. For instance, Article 2 of the DSU
(which defines the tasks of the DSB) only mentions the right of the DSB to authorize the suspension
of concessions. But it does not address the withdrawal of the DSB authorization. Thus, as Article 2.4
of the DSU refers only to explicit provisions unde r which the DSB may take a decision and in the
absence of such a provision regarding the withdr awal of the DSB authorization the European
Communities did not pursue this road.
17. The European Communities would assume th at the absence of any provision on the
abrogation of a DSB authorization may be also one reason why in those cases where a DSB
authorization has been granted this authorization has never been withdrawn.
6
18. The only DSU provision dealing with an end of the sanctions is Article 22.8. Yet, as already
explained this provision concerns the application of sanctions. Even Article 22.8 does not contain any
indication regarding the fate of the DSB author ization once the conditions under Article 22.8 are
fulfilled.
19. Finally, even if a DSB authorization could be terminated, positive consensus would apply,
Article 2.4 of the DSU. Thus, any attempt would ha ve been unlikely to work and certainly would not
have worked in the current circumstances. Since th e United States and Canada determinated that the
EC compliance measure was WTO-inconsistent both WTO members would have blocked any positive
consensus in the DSB.
Q2. Does the European Communities agree that, under the DSU as it currently stands, there
is no restriction on any party to initiate Article 21.5 proceedings? if not, could the EC elaborate
on the legal, procedural or technical reasons whic h make it impossible or ineffective for a given
party to a dispute to have recourse to Article 21.5 of the DSU?

20. Article 21.5 of the DSU does not itself mention who is to initiate the compliance review.
However, Article 21.5 expressly refers to the DSU procedures ("these dispute settlement
procedures"), which includes, inter alia, Article 6, i.e. the legal basis for the DSB to establish panels

6 The European Communities would refer in particular to the case Brazil – Aircraft, WT/DS46, where
the DSB authorized the suspension of concessions. This authorization was not revoked despite the fact that the
DSB adopted the second Article 21.5 compliance Panel Report and which found the Brazil' compliance measure
as WTO consistent.

on the basis of a complaint. Thus, as pointed out under Question 1 it is clear from the context, the
object and purpose of the DSU and subsequent practice by WTO Members that it is for a complaining
Member to challenge the WTO-consistency of a compliance measure by initiating the proceedings
under Article 21.5 of the DSU. Moreover, in our reply to Question 1 the European Communities has
also explained why a recourse to Article 21.5 by an original responding party would be ineffective.
7
Q3. Could the European Communities comment on the "endless loop of litigation"
argument made by the United States in paragraph 9 of its first written submission?

21. In paragraph 9 of the US First Written Submission, the United States argues that the EC
interpretation of Article 21.5 of the DSU an implementing Member can create an "endless loop of
litigation".
22. The European Communities consid ers that such a scenario is misplaced. In fact, an "endless
loop of litigation" due to a "mere declaration of compliance" presupposes that a complying Member
adopts a sort of "sham measure" which consequently would be found inconsiste nt in an Article 21.5
proceeding. The complying Member would con sequently enact a second "sham measure" which
would then again be found to be WTO-inconsistent under an Article 21.5 proceeding. According to
the United States this could go on forever.
23. One does not need a lot of imagination to rea lize that this scenario is pure science fiction.
Indeed, it is based on the very hypothesis that a complying Member would constantly act in bad faith.
Such an assumption is certainly not reflected in an y past WTO experience. But in addition, the US'
argument turns on its head the fundamental principle in the WTO that WTO Members should not be
presumed to act in bad faith. Yet, WTO-Members should not be assumed lightly to take a risk of
losing their credibility by making in bad faith "mer e declarations of compliance". Indeed, under the
same logic one could argue that the US' refusal to initiate an Article 21.5 proceeding would create an
"endless loop of sanctions".
24. Moreover, as the European Communities has highli ghted in its Closing Statement of the First
Substantive meeting, Members do not engage in dis pute settlement proceedings in order to lose them
needlessly and ignominiously.
25. That said, the scenario described by the United States is also completely irrelevant in the
present case. While the United States and Canada disagree with the EC compliance measure they have
also clearly stated that they do not contest th at the European Communities has acted in good faith.
Thus, the very basis for the US' theory of an endless loop of litigation does not apply in the present
circumstances.
Q4. In its first written submission, the Europe an Communities claims that it should benefit
from a presumption of good faith compliance. Canada and the United States have argued
against such a presumption and have further ar gued that the EC compliance measure is in
breach of Articles 3.3, 5.1 and 5.7 of the SPS agreement.

(a) Could the European Communities comment on the US statement in footnote 124
of the first US written submission?

26. In footnote 124 of its First Written Submission the United States is confused about the use of
the terms "principle of good faith" and "presumpti on of good faith". Furthermore, the United States
tries to limit the scope of the principle of good faith to the issue of "burden of proof".

7 See also EC reply to Question 62 regarding the burden of proof unde r a self-initiated Article 21.5
proceeding.

27. In respect to the relationship between the "p rinciple of good faith" and the "presumption of
good faith" the European Communities would refer to its reply in Question 61.
28. As far as the issue of burden of proof is con cerned, the European Communities considers that
the US' view does not encompass the full scope of the principle of good faith. Indeed, this general
principle is well recognized under public international law and the WTO Agreement.
29. The DSU refers in several instances to the principle of good faith, for instance in Articles 3.10
or 4.3 of the DSU. These provisions are unrelated to the issue of "burden of proof".
30. Moreover, the Appellate Body at several occasions expressed the broad nature of the principle
of good faith under the WTO Agreement. In United States – Hot Rolled Steel from Japan the
Appellate Body found
We see this provision [under the Anti-Dumping Agreement] as another detailed
expression of the principle of good faith, which is, at once a general principle of law
and a principal of general international law, that informs the provisions of the Anti-
Dumping Agreement, as well as the other covered agreements.
8
31. Furthermore, in the case United States – CDSOA (Byrd Amendment) the Appellate Body
decided that
The performance of treaties is also governed by good faith.9
32. The European Communities would quote from the dispute European Communities – Sugar. In
this case, the Appellate Body found that
[The principle of good faith] covers, in our view, the entire spectrum of dispute
settlement, from the point of initiation of a case through implementation.10
33. Finally, the European Communities would recall the Appellate Body decision in European
Communities – Sardines:
"We must assume that Members of the WTO will abide by their treaty obligations in
good faith, as required by the principle of pacta sunt servanda articulated in
Article 26 of the Vienna Convention. And, always in dispute settlement, every
Member of the WTO must assume the good faith of every other Member." 11
(Footnote omitted)
34. All these cases were unrelated to the issue of "burden of proof".
35. Against this background the European Communiti es considers that the US' approach to limit
the scope of the principle of good faith to the issu e of burden of proof falls far short of its actual
meaning under the DSU, public international law a nd the jurisprudence of the Appellate Body or
other relevant international bodies.

8 Appellate Body Report, United States – Hot Rolled Steel from Japan, para. 101.
9 Appellate Body Report, United States – Offset Act (Byrd Amendment), para. 296.
10 Appellate Body Report, European Communities – Export Subsidies on Sugar, para. 312.
11 Appellate Body Report, European Communities – Trade Description of Sardines , para. 278.
Article 26 of the Vienna Convention reads as follows: "Every treaty in force is binding upon the parties to it and
must be performed by them in good faith".

(b) Does the European Communities consid er that the presumption of good faith
compliance it invokes is irrebutable? if not, does it agree that Canada and the
United States could submit arguments to rebut that presumption and that it may
in return have to provide evidence to support its claim that its compliance
measure is compatible with the SPS agreement?

36. The presumption of good faith is rebuttable. Howe ver, such a rebuttal can only take place in
the appropriate forum. In the present case, this means that the United States and Canada must
challenge the EC measure under an Article 21.5 pro ceeding if they seek a determination that the EC
compliance measure is WTO-inconsistent. Conversely, the United States and Canada cannot rebut the
presumption of good faith in the present systematic proceedings under Article 22.8 in conjunction
with Article 23.1 of the DSU.
37. As already explained, this dispute is about procedural and systemic issues under the DSU.
More specifically, this case is about the US' and Canada's unilateral determination that the EC
compliance measure is inconsistent, and based on th is determination the US' and Canada's continued
suspension of concessions and related obligations.
38. This violation by the United States and Canada is independent of the EC compliance measure.
Even if the United States and Canada were able to rebut the presumption of good faith compliance,
quod non, they would still be in violation of Articles 23, 21.5 and 22.8 of the DSU. This is so because
they would still have made a unilateral determin ation of non-compliance and continued to apply
sanctions contrary to relevant DSU provisions at the time of the establishment of the Panel.
Conversely, the United States and Canada cannot me nd this procedural and systematic failure to
respect the dispute settlement rules by arguing now about the EC compliance measure.
39. In its Oral Statement the European Comm unities has asked a simple question which
elucidates this point further: Can the United States and Canada contest that the inconsistency of the
measure has been removed (Article 22.8) without vi olating Article 23 if they do not have recourse to
WTO dispute settlement
12? The simple answer is no. Indeed, by contesting that the inconsistency of
the measure has not been removed, the United States and Canada are determining unilaterally that the
EC measure is WTO-inconsistent. And since they apply sanctions on that basis they are in violation of
Articles 23.1, 23.2(a), 21.5 and 22.8 of the DSU. Thus, whether or not the EC measure is later to be
found WTO-consistent under the proper proceeding has no effect on the current violations by the
United States and Canada.
(c) Could the European Communities expl ain whether the responding parties are
entitled to the same presumption of good faith application of the retaliatory
measures? If not, why?

40. The United States and Canada can also rely on the presumption of good faith for the
application of sanctions. However, the principle of good faith requires the United Sates and Canada to
apply the DSU in good faith and therefore to initiate Article 21.5 proceedings against the European
Communities within a reasonable period of time if they disagree with the EC's view that it is now in
compliance. Yet, the United States and Canada have not done this and they even refuse to consider
bringing an Article 21.5 proceeding.
41. By bringing this case against the United Stat es and Canada the European Communities has
rebutted the presumption that the United States' and Canada's measures are adopted in good faith.

12 EC Oral Statement, para. 57.

Indeed, the European Communities made a prima facie case on why the application of the sanctions
by the United States and Canada is in violation of the DSU.
42. The European Communities would note that this situation is normal for every other WTO
proceedings. A complaining Member challenging a measure of another Member has to present a
prima facie case in order to rebut the presumption of good faith. Conversely, until the DSB makes a
finding of WTO-inconsistency no Member can be considered to be in violation of its WTO
obligations. Thus, every WTO Member enjoys the presumption of good faith or, in other words, the
benefit of the doubts.
43. Yet, the problem in the present case is preci sely that the United States and Canada are
refusing to bring a dispute settlement case to compla in against the EC compliance measure. Thus, due
to this refusal they cannot rebut the presumption of good faith compliance in the current proceedings,
which the European Communities has brought against the United States' and Canadian measures.
Q5. Could the European Communities specify whether it maintains its claim under
Article 23.2(c), or whether it limits its claims under Article 23 to violations of Article 23.1 and
23.2(a)? Likewise, does the European Communities consider that it has "provided a solution to
the nullification or impairment of benefits" to the United States (see US first written
submission, para. 105)?

44. The European Communities does not maintain its claim under Article 23.2(c) because it does
not add anything to the violation claims that are pursued.
45. The European Communities has "provided a solu tion to the nullification or impairment of
benefits" to the United States. By removing the inconsistency of the old measure, the European
Communities has removed any nullification or impairment of benefits to the United States that
previously resulted from a violation (see Article 11.1 of the SPS Agreement and Article XXIII:1(a) of
the GATT 1994).
46. Contrary to what the United States obviously believes, the United States has no right to see
the import ban lifted. It has only a right to see that the EC measure fulfils the conditions set out under
the SPS Agreement. Since the adoption of Directive 2003/74/EC this is the case. Consequently, the
United States (and Canada) currently does not suffer any nullification or impairment as a result of a
violation. All the more it is therefore illegal to con tinue to apply sanctions as if the US' and Canada's
benefits were still being nullified or impaired, and as if, therefore, the United States and Canada were
"rebalancing rights and obligations". Indeed, what we currently see is that two WTO Members assume
an additional right under the DSU to apply sanctions against another WTO Member merely on the
basis of a unilateral determination of non-compliance.
Q6. The United States argues in paragraph 200 of its first written submission that there is no
basis for concluding that Article 21.5 of the DSU imposes on the original complaining Members
a greater burden than on the Member already fo und to breach its WTO obligations and which
has failed to implement the DSB recommendation s and rulings by the conclusion of the
reasonable period of time. Could the EC comment on this argument?

47. The European Communities can only speculate about what the United States has in mind
when it pretends that the EC approach would impose under an Article 21.5 proceeding "a greater
burden" on the original complaining Member than on the complying Member. The European
Communities does not ask for more than what is th e logic under Article 21.5 and what has been the
constant practice by WTO Members (see our reply to question 1). If the United States considers this
ordinary approach as a "greater burden" for the or iginal complaining party so be it. The European

Communities has readily accepted such a "greater bur den" for instance in the latest Article 21.5
proceedings concerning FSC. Similarly, any other WTO Member, including by the way the United
States, has assumed such a "greater burden" in ot her proceedings. The burden is merely that of a
complainant who challenges the WTO-compatibility of measures of other Members.
48. Furthermore, the European Communities would al so recall that in the current circumstances
the obligation to initiate an Article 21.5 proceedi ng results from Article 23.1, 23.2(a) of the DSU.
Thus, if the United States were not presently a pplying sanctions as if nothing had happened, the
European Communities would not ask this Panel to put the "burden" to initiate a compliance case on
the United States.
49. That said, the European Communities would str ongly object to the link the United States tries
to establish between an Article 21.5 proceeding a nd the question on whether or not a WTO Member
was able to implement the DSB recommendations a nd rulings within the reasonable period of time.
Indeed, these are two completely different issues. Ar ticle 21.5 applies to "measures taken to comply".
This provision does not make any reference to whet her the measure was taken within or outside the
reasonable period of time.
Q7. With regard to the European Communities claim of presumption of good faith
compliance, how would the European Communities avoid the risk of not distinguishing between
meritorious and purely illusory measures purportedly taken to comply as mentioned by Canada
in paragraph 62 of its first written submission?

50. The European Communities has already addressed this issue under Question 3. As said above,
WTO Members should not be presumed to adopt in bad faith meritorious and purely illusory
measures.
51. Moreover, in the present case, all parties and third parties agree that the EC compliance
measure is neither meritorious nor purely illusory. Therefore, even though this question may be of
certain academic interest it is not necessary to answer to this question in order to resolve the present
dispute.
Q8. If the Panel were to address the EC's alternat ive claim of violation of Article 22.8 of the
DSU, do you think it may rely on the presumption of good faith compliance to consider how the
burden of proof is to be discharged by each party in its examination of the Article 22.8 claim?

52. Yes. The presumption of good faith also applies to the question on how the burden of proof
is to be discharged. Since the United States and Canada are contesting the removal of the
inconsistency of the measure, they would have to make a prima facie case on the WTO-inconsistency
of the EC compliance measure. This is the normal pr ocedural rule in WTO proceedings where it is for
a Member which contests the WTO-consistency of a nother Member's measure to bear the burden of
proof.
53. The European Communities would add that it has, in its conditional claims, not only invoked
Article 22.8 of the DSU, but also Article I:1 and II:1 of the GATT 1994, for which the prima facie
case of a violation cannot be denied by the United States and Canada. The consequence is that the
United States and Canada must invoke a defence and establish and prove that all conditions of that
defence are satisfied. Because of Article 22.8, th ese conditions notably include that there is an
ongoing violation of WTO law by the European Communities.
Q9. Could the European Communities comment on the statement of the United States in
paragraphs 97-98 of the first US written subm ission? In particular, could the European

Communities explain why, in the US – FSC case, it apparently did not suspend or terminate its
suspension of concessions retroactively on 24 November 2004?

54. On 24 November 2004, the United States announced in the DSB that the President had signed
into law the American Jobs Creation Act of 2004. At this occasion the US' representative declared that
"the repeal of the ETI provision was effective for transactions occurring after 31 December 2004."
13
55. Thus, on 24 November 2004 the United States declared in the DSB that its compliance
measure would only be effective as from 1 January 2005. Conversely, the United States did not argue
that it was in compliance as from 24 November 2004. Therefore, the European Communities
suspended the application of the sanctions agains t the United States as from 1 January 2005, the date
when the US' compliance measure came into effect.
Q10. Could the European Communities comme nt on the statement of Canada in
paragraphs 40-41 and 61 of Canada's first written submission?

56. In paragraph 40 Canada submits that th e European Communities is under an ongoing
obligation to comply subject to the surveillance by the DSB. In paragraph 41, Canada argues that its
sanctions are due to the DSB authorization by de finition WTO-consistent. In order to ensure the
security and predictability of the DSU only the DS B can terminate the authorization. Finally, in
paragraph 61, Canada maintains that the Eur opean Communities could enjoy the presumption of
compliance before the adoption of the DSB authori zation. Yet, this presumption yields to the DSB
authorization.
57. As to the first point, the European Communities does not agree that it is still under an ongoing
obligation to comply since the European Communiti es has already complied. Of course, the European
Communities understands that Canada is in disagreem ent on this point but Canada should then have
launched an Article 21.5 proceeding. The failure to do so amounts in the present circumstances to a
unilateral determination of non-compliance which is inconsistent with Articles 23.1, 23.2(a) and
Article 21.5 of the DSU.
58. Regarding the second point, the European Commun ities has explained in detail that the DSB
authorization does not make the application of sanctions "by definition" WTO-consistent: Article 22.8
of the DSU clearly provides that the application of sanctions is conditional upon, inter alia , the
continued existence of inconsistency. Once the in consistency has been removed the application of
sanctions shall be terminated. This obligation is self-executing. That is, it must be applied
spontaneously and does not require an y further determination by the DSB.
14 In this respect, the
European Communities has also submitted that the DS B authorization cannot be seen in an isolated
way. Rather, the DSB authorization needs to be put into its proper context, in particular it cannot be
possible to allow the application the DSB author ization irrespective whether the underlying reason,
i.e. the WTO-inconsistency of the old measure, still exists.15
59. Furthermore, if Canada's (and the US') appr oach were correct a panel could never find a
violation of Article 22.8 precisely because the defending parties claim that the application of the
sanctions is "by definition" WTO-consistent. A pa nel could never come to a recommendation that the
sanctions should not be applied any longer, if at the same time the DSB authorization would make the
application of the sanctions "by definition" WTO- consistent. The only way for a panel to overcome
this barrier and to reach a recommendation that san ctions should not be app lied any longer would be

13 WT/DSB/M/178.
15 EC First Written Submission (WT/DS321), paras. 104 et seq.; EC Oral Statement, paras. 110 et seq.

therefore to conclude that the DSB authorization cannot justify "by definition" the application of
sanctions.
60. The European Communities would note that the United States and Canada are rather illogical
on this point: On the one hand, when it comes to the violation claim under Article 21.5, 23.1, the
defending parties have argued during the First Subs tantive meeting that the European Communities
could bring an Article 22.8 case in order to get the sanctions lifted. On the other hand, when it comes
to the violation claim under Articles 22.8 (23.1) the defending parties argue that there can not be any
violation because of the DSB authorization. However, if the latter were true, the former would not
work.
61. The inherent flaws of the US' and Canada's logic come from the fact that they do not properly
distinguish between the existence of the DSB author ization and the application of the sanctions. As
explained above, the DSU does not provide for any mechanism for the formal revocation of the DSB
authorization. It does, however, provide for a self-executing provision on the application of the
suspension of obligations pursuant to a DSB authoriza tion. And this application is not "by definition"
WTO-consistent but subject to certain conditions, i.e. the continued inconsistency of the measure.
62. Finally, in respect to para. 61 of Canada 's First Written Submission the European
Communities has also already explained that the pr esumption of compliance is in no way affected by
the existence of a DSB authorization.
16
Q11. Could the European Communities comment on the statement of the United States in
paragraph 187 of the first US written submission?

63. In paragraph 187 of the US First Written Submission, the United States argues that the
European Communities' interpretation of Article 23. 2(a) would force a complaining Member into a
breach of this provision if it does not immediately agree with the measure or launch an Article 21.5
proceeding.
64. The European Communities replied to this argument in paras. 47 and 48 of its Oral Statement.
In fact, the United States seems to get carried away by referring to an alleged need to make an
"immediate" determination regarding the WTO-consis tency of a compliance measure. Yet, this is not
the case before us. Almost two years have passed since the European Communities has adopted its
measure in October 2003. Moreover, this measure di d not come out of the blue. In November 2000,
the European Communities had already notifie d the legislative proposal to the WTO SPS
Committee.
17 Thus, until today the United States and Canada had almost five years to make up their
mind on the WTO-consistency of the (proposed) measu re. And still they pretend not to have made
any determination to this effect and to be unabl e to do so. Moreover, the United States even denies
that there is a "disagreement" with the Europ ean Communities on the consistency of the measure
within the meaning of Article 21.5.18
65. What the United States conveniently overlooks is the fact that since all that time it applies
sanctions against EC products. This is indeed a special situation. If the United States were not
applying sanctions the European Communities would certainly not be concerned about whether the

16 EC First Written Submission (WT/DS321), paras. 104 et seq.
17 G/SPS/N/EEC/102 and G/SPS/N/EEC/102 Rev. 1.
18 Surprisingly, this does not prevent the United States to argue that the European Communities could
have brought an Article 21.5 case. But if it were true that there is no disagreement between the United States
and the European Communities on what basis could the European Communities then have initiated an
Article 21.5 proceeding?

United States needs another five years to come to a conclusion about the WTO-consistency of the EC
compliance measure.
66. A retaliating Member has at a minimum a good faith obligation to assess within a reasonable
delay the compliance measure. And if it is unable to do so it should suspend the sanctions. If this had
been the case the European Communities would certainly not have initiated these proceedings. But the
sluggishness of a retaliating Member cannot be at the expense of an implementing Member that has
made every effort to comply with its obligations.
Q12. Could the European Communities comment on the US interpretation of "these dispute
settlement proceedings" in Article 21.5 of the DSU (see first US written submission, paras. 193
and 199-201)?

67. The European Communities has a different understanding of Article 21.5. In its view
Article 21.5 provides for a proper compliance pr oceeding. The term "these dispute settlement
proceedings" encompass the normal rules that apply for dispute settlement proceedings in general
such as for instance Article 4 or 6.
19
68. That said, the European Communities does not di sagree that the DSU also provides for other
proceedings other than Article 21.5. This could be, for instance, Article 25. However, as explained in
response to Question 50, the United States and Cana da refused the European Communities' offer to
resolve this dispute through an agreed procedure, including recourse to arbitration under Article 25
DSU.
Q13. Having regard to the first claim of the EC, does the European Communities consider
that there could be a breach of Articles 21.5 and 23.2(a) of the DSU by Canada and the United
States even if the presumed compliance has not actually translated into actual compliance?

69. Yes, as already indicated in our reply to question 4(b), the procedural violations committed by
the United States and Canada are independent of whether or not the European Communities has
actually complied. The European Communities claims that the United States and Canada are violating
Article 21.5 in conjunction with Articles 23.1 a nd 23.2(a) because they have made a unilateral
determination of non-compliance and because they con tinue to apply sanctions on that basis. Since
the United States and Canada have already made su ch an illegal unilateral determination it does not
matter whether the EC compliance measure is WTO-c onsistent or not. It suffices to state that the
United States and Canada have made a unilateral de termination they were not allowed to make under
the DSU.
70. The European Communities of course understands th e defending parties' strategy to distract
the Panel from this procedural violation of the DSU by discussing the substantive compliance by the
EC measure. However, this discussion cannot mend the violation that has already occurred. Indeed, it
would be ironic if the United States and Canada were allowed to justify their illegal unilateral
determination of non-compliance under Article 21.5 in conjunction with Article 23.2(a) if they could
use these proceedings to discuss the substance of the EC compliance measure. As the European
Communities has repeatedly made clear, the present proceedings are not the appropriate forum for
such a discussion.

19 That said, Article 21.5 is not an ordinary panel procedure in that the terms of reference are defined as
consisting of the existence or WTO-consistency of the measure taken to comply and in relation to the
recommendations which Article 21.5 panels (do not) make.

Q14. Could the European Communities comment on the US statement and its reference to the
Appellate Body Report in US – Certain EC Products (first US written submission, para. 207 and
related footnote)?

71. In paragraph 207 of the US' First Written Submission the United States refers to the Appellate
Body statement whereby Article 3.7 of the DSU does not contain an explicit obligation not to apply
sanctions without prior authorization. The United St ates interprets this sente nce so as to mean that
Article 3.7 does not contain any obligation at all.
72. The United States obviously misinterprets the Appellate Body statement. There is a difference
between the Appellate Body statement whereby Article 3.7 does not set out an explicit obligation, on
the one hand, and the US' interpretation that Article 3.7 does not contain an obligation at all. Rightly
so, the United States also quotes the last sentence of the Appellate Body statement in paragraph 120
which reads as follows:
We consider, however, that if a Member has acted in breach of Article 22.6 and
23.2(c) of the DSU, that member has also, in view of the nature and content of
Article 3.7, last sentence, necessarily acted contrary to the latter provision.
20
73. In the present case, the European Communities app lied this Appellate B ody' interpretation of
Article 3.7. Indeed, if a WTO-Member can act "contra ry to Article 3.7" it is clear that this provision
also contains a specific obligation.
Q15. Can the presumption of good faith impl ementation/consistency of the compliance
measure override the DSU authorization for suspension of obligations? Please elaborate.

74. The European Communities has difficulties to unde rstand what the Panel means by the word
"override" and this word seems rather inappropriate. The European Communities bases its claim, inter
alia, on Article 22.8 which provides that under certain conditions sanctions may not be "applied" any
more. It is true that within the Articles 22. 8, 23 claim the European Communities relies on the
presumption of good faith. But as explained in our re ply to question 4(b) the defending parties cannot
escape this presumption in the absence of any challenge of their own under Article 21.5 of the DSU.
75. On the other hand, if the Panel's question implies whether the presumption of good faith
terminates the DSB authorization the European Communities would recall that it has never argued
this.
Q16. Could the European Communities identify: (i) the document(s) that encompass the risk
assessment for the ban on imports of beef from cattle treated with oestradiol 17 β for growth
promotion purpose, and (ii) the information that served as basis for the provisional measure on
imports of beef from cattle treated with the other five hormones for growth promotion purpose?
Could the EC also indicate whether this informat ion is publicly available? If yes, since when?
If not, has it been made available to the United States and Canada at any point of time?

76. In answering this question, the European Communities refers to the assessment of risk
performed by the relevant scientific committee wh ich the applicable Community law defined as the
committee competent to perform th e risk assessment for this kind of substances in the EC legal
system. This is the Scientific Committee on Veteri nary Measures relating to Public Health (SCVPH)
(see 1
st EC Written Submission, para. 143). This is also explained in the recitals of Directive 2003/74.
Although the Panel's question does not clarify wh at it means by "risk assessment", the European

20 Appellate Body Report, US – Certain EC Products, para. 120.

Communities uses here the term "risk assessment" to refer to a risk assessment in a strict (narrow)
sense.
21 But as the Panel knows, the Appellate Body in the Hormones case has clarified that the term
"risk assessment" in the SPS Agreement is wider in scope because it covers also evidence,
considerations, objectives and factors that are al so taken into account at the "risk management"
phase.22 The European Communities will indicate separatel y the basis of its "risk management" that
led to the adoption of the new Directive 2003/74.
77. The main documents and information that en compass the risk assessment for the restriction
on imports of beef from cattle treated with oestradiol 17 β for growth promotion purposes as well as
for the provisional restriction of imports of beef from cattle treated with the other five hormones for
growth promotion purposes, are the three opinions of the SCVPH of 30 April 1999, of 2 May 2000,
and of 10 April 2002.
23 These three scientific opinions explain in detail the scientific information,
data and other evidence upon which they are based, a nd each one of them provides at the end a list of
references. In particular, they explain the procedur es that were followed and also provide in detail the
data and evidence resulting from the 17 specific scientific studies that were initiated by the
Commission to obtain as much as possible of the missi ng scientific information that was identified by
the WTO Panel and Appellate Body reports in the Hormones case.
78. It should also be clarified that these three scientific opinions of the SCVPH took into account
and analysed the scientific evidence and data from an y relevant source available at the time, including
the opinions from the 1999 United Kingdom's Veterinary Products Committee, the 1999 Committee
on Veterinary Medicinal Products of the European Community (CMVP),
24 and the 1999 and 2000 re-
evaluations from the Joint FAO/WHO Expert Committee on Food Additives (JECFA) of some of
these hormones.
79. The three SCVPH opinions (as well as the other opinions on which they are based) are all
public. They were made available to all concerned a few days after their adoption, and were also put
on the internet site of the European Commission soon thereafter. Moreover, the results of the
17 scientific studies, after being peer reviewed, le d to a number of publications in international
scientific journal and reviews and were presente d also at international scientific conferences.
25 This is
explained in more detail below.
80. The three scientific opinions of the SCVPH were published as follows:
– Opinion of the Scientific Committee on Veterinary Measures Relating to Public
Health: Assessment of potential risks to human health from hormone residues in
bovine meat and meat products (of 30 April 1999), is on the European Commission's
website since April 1999 at:

21 That is as it is defined in the Codex Alimentarius Commission Procedural Manual, 14 th ed.,
pages 46-47, available at http://www.codexalimentarius.net/web/procedural_manual.jsp.
22 See Appellate Body Report in EC – Hormones, at paras. 181 and 206.
23 They have already been provided to the Panel by both the USA and Canada. See: USA list of
exhibits nos 4, 17 and 1, respectively; and Canada's list of exhibits nos 2, 4, and 7, respectively. For this reason,
the European communities will not submit them again to the Panel.
24 It should be clarified that both the USA and Canada misinterpret in their first written submission the
role of the CVMP and the relevance of its opinion in the Community legal system. The European Communities
will explain in greater detail with its rebuttal this important misundersta nding by the defending parties and the
erroneous arguments this has lead them to advance.
25 See, e.g., Andersson, Grigor, Rajpert-De Meyts, Leffers and Skakkebaek (eds.): Hormones and
Endocrine Disrupters in Food and Water - Possible Impact on Human Health, published by Munksgaard,
Copenhagen, 2001 (ISBN 87-16-16462-8). This book contains 43 peer-reviewed papers and discussions from
an international workshop held at the University Ho spital Rigshospitalet, Copenhagen, Denmark, May 27-30,
2000.

http://web.archive.org/web/20000417013041/europa.eu.int/comm/dg24/health/sc/scv/
out21_en.html.
– Review of specific documents relating to the SCVPH opinion of 30 April 1999 on
the potential risks to human health from hormone residues in bovine meat and meat
products (adopted on 03 May 2000), is on the website since August 2000 at:
http://web.archive.org/web/*/http://europa.eu.int/comm/food/fs/sc/scv/out33_en.pdf

– Opinion on review of previous SCVP H opinions of 30 April 1999 and 3 May 2000
on the potential risks to human health from hormone residues in bovine meat and
meat products (adopted on 10 April 2002), is on the website since August 2002 at:
http://web.archive.org/web/*/http://europa.eu.int/comm/food/fs/sc/scv/out50_en.pdf

81. These three scientific opinions of the SCVPH were made available to every person concerned,
including of course the USA and Canada. In partic ular, both the USA and Canada do not deny that
they have received these there scientific opinions in time. The USA only claimed, for the first time
during the oral hearing on 13 September 2005, that it has not received the details of the 17 studies
initiated by the European Commission. Canada has neve r made such a claim. It should be noted that
Canada, Australia and the United Kingdom have made a review of these three opinions of the SCVPH
and of the results of the 17 studies mentioned above, and issued their own reviews of these studies.
The reviews of these three countries are also public ly available (and actually provided to the panel
with the parties submissions).
26 This means that these three countries have had no problem whatsoever
to obtain access to all relevant documentation pertaining to the European Communities' risk
assessment.
82. The European Communities will also explain in more detail with its rebuttal that the
defending members not only received the three scientific opinions but that the European Communities
has been in contact with their competent authoriti es and scientists several times, where the results of
the risk assessment have been explained and discussed.
83. As already indicated above, the European Co mmunities took also into account the evidence
relating to the factors mentioned in Article 5.2 and 5.3 of the SPS Agreement. This is in accordance
with the Appellate body findings in paragraphs 205-208 of the Appellate Body report in the hormones
case. They are documented in particular in the 1999
27 and 2002 28 opinions of the SCVPH, where
specific references to the scientif ic evidence upon which they are based are explained. These factors
and other considerations and the evidence upon which th ey are based are also explained in recitals 10-

26 See the 1st written submission of the USA, list of exhibits, nos 12 and 16. See also 1st written
submission of Canada, list of exhibits, no 6. Moreover, th e following is an excerpt fro m the web-site of Health
Canada: "How is Health Canada addressing results of the EU commissioned studies on hormonal growth
promoters? It is imperative that any decisions taken by the Government of Canada regarding the use of
hormonal growth promoters be based on the most accurate interpretation of scientific evidence available. To
this end, Health Canada's Veterinary Drugs Direct orate (VDD) undertook an intensive review of seventeen
studies commissioned by the EU to assess scientific info rmation on the toxicity and safety of hormone-treated
beef. VDD's scientific review of the EU studies concl uded that residues in meat from animals treated with
hormonal growth promoters (when administered according to good veteri nary practices) pose no undue
 risk to
human health." (Emphasis added). Available at http://www.hc-sc.gc.ca/dhp-
mps/vet/faq/growth_hormones_promoters_ croissance_hor monaux_stimulateurs_e.html. (visited on 1 October
2005).
27 See section 3 of the 1999 SCVPH opinion.
28 See section 4.1.4, section 6 and Annex 1 of the 2002 SCVPH opinion.

12 of the new Directive 2003/74. The European communities will provide more details of the
evidence and the data upon which its "risk management" phase was based with its rebuttal in this case.
84. The European Communities provides as an exhibit to this submission the results of all the 17
studies initiated by the European Commission and the numerous publications they have given rise to
in various peer reviewed scientific journals. When a couple of these studies are not published in peer
reviewed scientific journals, a copy of the original of the study is provided.
29
Q17. Has the European Communities assessed the specific risk associated with residues in
meat from cattle treated with hormones for growth promotion purposes according to good
veterinary practice? Please provide the risk assessment, as well as the scientific studies on
which it relies.

85. Yes, the EC has assessed the specifi c risk associated with residu es in meat from cattle treated
with hormones for growth promotion purposes according to good veterinary practice (GVP). As
explained above with the reply to question 16, the European Communities' assessed in the specific
case of the six hormones the potential adverse effects of the factors mentioned in Articles 5.2. and 5.3.
of the SPS Agreement.
86. The studies that assessed the specifi c risk associated with residu es in meat from cattle treated
with hormones for growth promotion according to GVP are, in particular, the following:
30
• Study concerning an analysis of 500 samples for the presence of growth promoters,
published as "Hormones found in meat samples from regular controls within the EU
and from US imports", in Chemical Awareness; issue 9, July 5
th, 2000.

• Study concerning an analysis of 500 samples for the presence of growth promoters
steroids in meat by gas chromatography coupled to mass spectrometry, published in
Journal of Chromatography A, 867: 219-233, 2000.

• Study concerning a survey of anabolic agen ts in meat, published as "Le contrôle des
anabolisants dans la viande", in Annal es de Toxicologie Analytique, vol.XII, no.1,
2000.

• Study concerning the long term effects in children to estrogenized meat, published as
"Accidental gynecomastia in children", in APMIS 109, suppl. 103: 203-209, 2001.

• Study concerning the use of hormones as growth promoters: genotoxicity and
mutagenicity of Zeranol &Trenbolone , published as "Genotoxic potential of
xenobiotic growth promoters and their metabolites", in APMIS 109:89-95, 2001.

• Study concerning the metabolic pathways of estrogens as steroidal growth promoting
agents, published as "Estrogenic activity of estradiol and its metabolites in the ER-
CALUX assay with human T47D breast cells", in APMIS 109: 101-107, 2001.

87. It should also be recalled that one of the critical issues in the assessment of the risk at stake, as
identified by the Appellate Body in the hormone case, is to take into account in this specific instance
the lack of an harmonised GVP, as well as the conditions of implementation and control of such GVP.

29 Exhibit EC – 6 (US), Exhibit EC – 4 (CAN).
30 Copies of the original of these studies as well as their published version, when available, have been
provided with the exhibits attached to Question 16.

And as the Appellate Body pointed out, it is possible to deduce that, if a product is said to be safe if
GVP is followed, then it may or may not be safe if GVP is not implemented. The GVP - or rather
Good Practice in the Use of Veterinary Drugs (GPVD) as it is called in the Codex Alimentarius
Commission (Manual, page 45) - is defined as follows:
Good Practice in the Use of Veterinary Drugs (GPVD) [ ] is the officially
recommended or authorized usage incl uding withdrawal periods, approved by
national authorities, of veterinary drugs under practical conditions.
88. The GPVD is, therefore, dependant on what na tional governments consider appropriate, and
is indeed different in each country, as it is dependant on each national authorisation.
31 The definition
is, therefore, somewhat circular and hence problematic.32
89. The European Communities has evaluated also the specific risks to human, animal and
environmental adverse effects associated from th e misuse or abuse of these hormones for animal
growth promotion purposes. The studies that carried these evaluations are the following:33
• The study concerning the application of an abolic agents to food producing animals -
health risks through disregard of require ments of good veterinary practice. This
multifaceted study has given rise to a number of scientific publication in peer
reviewed journals. They are the following:

 1) "Detection of melengestrol acetate r esidues in plasma and edible tissues of
heifers", The Veterinary Quarterly 21: 154-158, 1999.

 2) "Detection of anabolic residues in misp laced implantation sites in cattle", Journal
of AOAC International 83(4); 809-819, 2000.

 3) "Suppression of androstenone in entire ma le pigs by anabolic preparations",
Livestock Production Science- 69: 139-144, 2001.

 4) "A sensitive enzyme immunoassay (EIA ) for the determination of Melengestrol
acetate (MGA) in adipose and muscle ti ssues", Food Additives and Contaminants
18(4):285-291, 2001.

 5) "Characterisation of the affinity of different anabolics and synthetic hormones to
the human androgen receptor, human sex hormone binding globulin and to the bovine
progestin receptor", APMIS 108: 838-846, 2000.

 6) "Dose-dependent effects of melengestrol acetate (MGA) on plasma levels of
estradiol, progesterone and luteinizing horm one in cycling heifers and influences on
oestrogen residues in edible tissues", APMIS 108: 847-854, 2000.

31 For instance, the latest 2005 United Kingdom report on hormones, provided by the USA with its oral
statement during the first oral hearing, which is cited very selectively by the USA, states on page 6 that: it is
"more likely to have abuses in a context where these hormones are authorised".
32 For instance, JECFA stated that: "[B]ecause the use pattern of veteri nary drugs varies considerably
form one country to another and because information on such use generally is not available to JECFA, it is very
difficult to estimate the percentage of national herds that are likely to be treated w ith a substance at any time
and consumer consumption patterns from national surveys to a precision that would be sufficient to estimate the
intake" (See page 7 of the response from the 60th meeting of JECFA to questions raised by the 13th CCRVDF).
33 Copies of the original of these studies as well as their published version, when available, have been
provided with the exhibits attached to Question 16.

 7) "Hormone contents in peripheral tissues after correct and off-label use of growth
promoting hormones in cattle: Effect of the implant preparations Finaplix-H®,
Ralgro®, Synovex-H® and Synovex Plus®", APMIS 109: 53-65, 2001.

 8) "Tissue-specific expression pattern of estrogen receptors (ER): Quantification of
ER_ and ER_ mRNA with real-time RT-PCR", APMIS 109: 345-355, 2001.

• The study concerning screening water samples for estrogenic &androgenic anabolic
chemicals scientist has not yet indicated name of journal and publication date, partly
published in APMIS 109, suppl.103: 551-556, 2001.

• The study concerning endocrine disrupti ng effects of cattle farm effluent on
environmental sentinel species, publishe d as "A re-examination of variation
associated with environmentally stressed organisms", in Human Reproduction, update
vol. 7, no. 3: 265-272, 2001.

90. Moreover, concerning the assessment of the risk associated with residues in meat from cattle
treated with hormones for growth promotion purpo ses and the scientific studies on which it relies, the
1999 SCVPH opinion already refers to this issue, in particular at :
• Discussion on Susceptible populations (page 27)

• Exposure considerations upon misuse (at page 30)

• Exposure in relation to endogenous hormone production in humans at different stages
of life (page 34)

• Assessment of excess exposure to oestrogens from consumption of hormone-treated
beef (at page 36)

• Assessment of excess exposure to testosterone from consumption of hormone-treated
beef (at page 47)

• Assessment of excess exposure to progesterone from consumption of hormone-
treated beef (at page 52)

• Assessment of exposure to trenbolone from c onsumption of hormone-treated beef (at
page 57)

• Assessment of exposure to zeranol from consumption of hormone-treated beef (at
page 63)

• Assessment of exposure to melengestrol from consumption of hormone-treated beef
(at page 67)

• Executive summary (at pages 69 – 73) in particular second paragraph (at page 72).

91. The European Communities reserves the right to develop further with its rebuttal these
important issues and it will provide in particular specific evidence from misuse of these hormones that
has recently arisen in the territory of the defending Members.

Q18. What is the EC's response to the comments in paragraphs 155 and 156 of the US first
written submission on the EC's study of the carcinogenic effect of the oestradiol – 17 β to human
health? Does the European Communities agree that what is relevant is the risk resulting from
human consumption of meat from cattle treated with oestradiol – 17 β for growth promotion
purpose according to good veterinary practice?

92. Yes, the European Communiti es agrees that in principle the risk resulting from human
consumption of meat from cattle treated with oestradiol - 17 β for growth promotion purposes,
according to good veterinary practice, is releva nt. But there are a number of very important
qualifications.
93. First, this kind of risk, if this was a "real lif e" situation, then as JECFA has already pointed
out in its answer to the CCRDVF, it is very di fficult to estimate the GVP and the hormone uses " to a
precision that would be sufficient to estimate the intake".
94. In reality, however, human beings, including the populations at risks, are exposed to
cumulative and synergistic effects, as they may be exposed to multiple sources of hormone and
hormone residues, via several intake routes, as well as from endogenous production of some of these
hormones. Not only is it extremely difficult or impossible to assess accurately consumer exposure
patterns, or other exposures from other environmenta l or endogenous sources, but it is also virtually
impossible to assess all cumulative and synergistic e ffects that may arise from all potential exposure
patterns, including for simultaneous exposure to sev eral of these hormones. Therefore, the only
rationale that can be inferred from the available sci entific data is that the higher the exposure to
residues from these hormones, the greater the risk is likely to be.
95. Secondly, another important qualification comes from the proper implementation of GVP and
the possibilities available to control good veterinary practice, as discussed in the answer to the
previous question.
96. In summary, for the European Communities th e risk resulting from human consumption of
meat from cattle treated with oestradiol - 17 β for growth promotion purposes, according to good
veterinary practice, is " assessed in the real world " where "people live, work and die", or may be
suffering from clinical disorders, may be particularly vulnerable segments of the population (e.g. like
prepubertal children), etc.
97. More specifically, in paragraphs 155 and 156 of its first written submission the United States
claims that the European Comm unities assessment of the risk in relation to a carcinogenic hazard of
oestradiol - 17 β is based on studies on the use of oestrogens in contraceptives and hormone
replacement studies. This is partly correct. It should be added, however, something the USA does not
st written submission, that even JECFA for the first time in its 1999 re-
evaluation of oestradiol 17 β came to the conclusion that: " The Committee concluded that oestradiol
17β has genotoxic potential ". As said above, this was the first time JECFA made this finding –
compared to its previous 1988 evaluation – and this has inter alia led now, again for the first time, to
propose the definition of an Acceptable Daily Intake (ADI) for oestradiol 17 β, which was not the
situation before.
98. Moreover, what the USA also does not explain is that its own responsible health authorities
have, for the first time since 2002, declared that oestradiol 17 β is proven to be a human carcinogen
and it is now listed as such, since 2002, in the US A Annual Report on Carcinogenesis. This latest
report for instance states the following:

"Steroidal estrogens also occur naturally in plants. Currently, more than 360 plants
have been identified that have estrogenic activity. A few plants contain the principal
estrogens found in mammals, estradiol and estrone (Setchell 1985). Meat and milk
also may contain estrogens (Collins and Musey 1985). Veterinary use of steroidal
estrogens (to promote growth and treat illnesses) can increase estrogens in tissues of
food producing animals to above their normal levels."
34
99. On the basis of the most recen t evidence from all sources, the USA authorities concluded that
"steroidal estrogens are known to be human carcinogens based on sufficient evidence of
carcinogenicity in humans, which indicates a causal relationship between exposure to steroidal
estrogens and human cancer." For this reason, th e 2002 listing of steroidal estrogens as known to be
human carcinogens now "supersedes the previous listing of specific estrogens in the Report on
Carcinogens (RoC) and applies to all chemicals of this steroid class."
100. Equally, the United States argues against the European Communities assessment of risks by
stating inaccurate generalities on the comparison of doses and bioavailability/biological activity, for
different mode of intake and uses of the hormone . What is most importantly missing in the United
States reasoning is the intrinsic and significant variability of the biological activities of this hormone,
and its potential pathological consequences, according to individual sensitivity, stage of development,
etc. Furthermore, it claims that " oestradiol - 17 β is generally
 inactive when given orally " (emphasis
added), while this argument is well known to be s till controversial and not consensually accepted by
the scientific community. It also claims, in footnote 167, without providing any relevant and peer
reviewed scientific evidence to support its claim, how the results of some of the studies cited by the
European Communities should be interpreted.
101. Most importantly, carcinogenic activities of mo lecules can not be assessed with the reasoning
and the biological thresholds available to assess th eir acute or chronic toxicity, as does the United
States. This is particularly the case when compounds have genotoxic activity. The carcinogenic
activity of biologically active molecules, especia lly when their normal (as opposed to pathological)
activity is related to radical modifications of developmental phenotypes and of cellular growth and
development, indeed may often manifest itself at sub chronic level, with low doses under permanent
exposure or with delayed potential effect. This car cinogenic activity may only manifest itself after a
long period of time and it may even go unnoticed in classical acute, chronic or even sub chronic
studies. Finally, as noted by the United States itself, synthetic or naturally occurring molecules bear
different hazards, and contrary to the United Stat es claim, results obtained from studies on one or the
other are difficult to extrapolate to one another.
102. The European communities will provide more de tailed information and specific data on this
important issue with its rebuttal in this case.
Q19. Could the European Communities explain why the ban on testosterone, progesterone,
MGA, TBA and zeranol is now only provisional?

103. The reason, in summary, is that the most thorough and recent information obtained in the
latest assessments of the risk for each of these fi ve hormones has been found to be insufficient,
inconclusive and contradictory. Even if the insu fficiencies and contradictions amount to different
extents for each of the five hormones, they do not permit to reach firm conclusions and to perform a
definitive risk assessment. For instance, it is not possible to set acceptable thresholds for these
hormones as used in growth promotion or acceptable thresholds for their residues.

34 Available at http://ntp.niehs.nih.gov/index.cfm?objectid=72016262-BDB7-CEBA-
FA60E922B18C2540.

104. This is explained more specifically and in de tail in the assessment of risks performed by the
SCVPH, in particular in its opinion of 1999 (see also replies to questions 67 and 73), as well as in the
subsequent European Communities' new Directive 2003/74, in particular in its 7
th, 10 th and 13 th
recitals, as well as in its operative provisions. Recital 7 explains:
"As regards the other 5 hormones, the Scientific Committee on Veterinary measures
relating to Public Health (SCVPH) assessment is that, in spite of the individual
toxicological and epidemiological data ava ilable, which were taken into account, the
current state of knowledge does not make it possible to give a quantitative estimate of
the risk to consumers".
105. Consequently, as explained in the recital 10 of the said Directive:
"taking into account the results of the risk assessment and all other available pertinent
information, it has to be concluded that, in order to achieve the chosen level of
protection in the Community from the risks po sed, in particular for human health, by
the routine use of these hormones for growth promotion and the consumption of
residues found in meat derived from animals to which these hormones have been
administered for growth promotion, it is necessary to continue provisionally to apply
the prohibition to [these] five hormones. Furthermore, [ ] the provisional prohibition
of these five hormones should apply while the Community seeks more complete
scientific information from any source, which could shed light and clarify the gaps in
the present state of knowledge of these substances"
106. Finally, recital 13 concludes:
"The proposed amendments to Directiv e 96/22/EC are necessary to achieve the
chosen level of health protection from the residues in meat of farm animals treated
with these hormones for growth promotion purposes, whilst respecting the general
principles of food law set out in Regula tion (EC) No 178/2002 and the international
obligations of the Community. Moreover, there is no other means that is reasonably
available at present, taking into account t echnical and economic feasibility, which is
significantly less restrictive of trade and can achieve equally effectively the chosen
level of health protection. [ ] "
107. Furthermore, the operative provisions of the said Directive require that the ban on these
5 hormones be provisional (Article 3.1 of the amended Directive), and Article 9 of
Directive 2003/74/EC (article 11a of the amende d former Directive) requires that additional
information is sought and that the measures applie d be kept under regular review, with a view to
timely present any necessary amendments.
108. The prohibition on the use of these five hormone for animal growth promotion is now
provisional, while it was not so in the Directive 96/22/EC, for a number of reasons. First, the new
scientific studies that have been initiated sin ce the DSB recommendation in the hormone case, in
order to address the scientific information that was found by the panel and the Appellate Body to be
missing, have now identified new important gaps, in sufficiencies and contradictions in the scientific
information and knowledge now available on these hor mones, which have together reinforced the
need for even more studies. Second, the previous Directive 96/22/EC was drafted in 1995 and adopted
in 1996 as a codification of the pre-existing Eur opean Community measures in this area. This
happened at a time where international guidance on how to perform a risk assessment was not yet
available to tackle situations where scientific information was insufficient to conclusively assess a
particular risk, in accordance with a member's chosen level of health protection. For example, at that
time there did not exist standards nor guidelines from the Codex Alimentarius Commission on how to

perform a risk assessment and risk analysis. Moreover, the provisions of Article 5.7 have now been
clarified in a number of panel and Appellate B ody reports, starting with their reports in the hormones
case, which was not the legal situation before 1996.
109. Substantive international discussions have lead to the development of the Working Principles
for Risk Analysis for Application in the Framework of the Codex Alimentarius Commission
35 after
1996. This has only been adopted by the Codex Alimentarius Commission at the 26 th Codex
Alimentarius Commission meeting at Rome in July 2003. The relevant concepts developed there have
been taken into account by the European Communiti es and have now influenced the drafting of its
framework Food Law, namely Regulation 2002/178/EC. In the context of temporary measures,
articles 6 and 7 thereof are particularly relevant, and they read :
Article 6 - Risk analysis
1. In order to achieve the general obj ective of a high level of protection of
human health and life, food law shall be b ased on risk analysis except where this is
not appropriate to the circumstances or the nature of the measure.
2. Risk assessment shall be based on th e available scientific evidence and
undertaken in an independent, objective and transparent manner.
3. Risk management shall take into account the results of risk assessment, and
in particular, the opinions of the Authority referred to in Article 22, other factors
legitimate to the matter under consideration and the precautionary principle where the
conditions laid down in Article 7(1) are re levant, in order to achieve the general
objectives of food law established in Article 5.
Article 7 - Precautionary principle
1. In specific circumstances where, following an assessment of available
information, the possibility of harmful eff ects on health is identified but scientific
uncertainty persists, provisional risk ma nagement measures necessary to ensure the
high level of health protection chosen in the Community may be adopted, pending
further scientific information for a more comprehensive risk assessment.
2. Measures adopted on the basis of pa ragraph 1 shall be proportionate and no
more restrictive of trade than is required to achieve the high level of health protection
chosen in the Community, regard being ha d to technical and economic feasibility and
other factors regarded as legitimate in th e matter under consideration. The measures
shall be reviewed within a reasonable peri od of time, depending on the nature of the
risk to life or health identified and the type of scientific information needed to clarify
the scientific uncertainty and to conduct a more comprehensive risk assessment.
Q20. Could the European Communities ex plain why it has banned oestradiol 17 β treatments
of animals for growth promotion, and the meat derived from those animals, while allowing its
continued use for therapeutic and zootechnica l purposes (Canada's first written submission,
para. 104)?

110. The European Communities would like to recall that the Appellate Body has reversed the
panel's findings on the issue concerning the occasi onal use of the hormones for therapeutic or

35 See at ftp://ftp.fao.org/codex/Publications/ProcManuals/Manual_14e.pdf

zootechnical purposes.
36 Therefore, arguments of this kind by the defending parties in the context of
these proceedings attempt to reintroduce a debate that they have lost at the Appellate Body level. A
short reply to this question, therefore, is that this issue is now irrelevant.
111. Nevertheless, the European Communities will pr ovide again some information and reserves
the right to further develop its views on this issue in the remaining stages of these proceedings. First,
the new Directive 2003/74 does not allow all uses fo r therapeutic and zootechnical purposes, but only
a very few (Article 5a.1 and 5a.2 of the new Di rective), for which no viable effective medicinal
alternatives exist, and on a defined temporary basi s, pending availability of alternative treatment
methods, as follows :
Treatments:
– the treatment of foetus maceration or mummification in cattle, or
– the treatment of pyometra in cattle,
Zoo technical

– oestrus induction in cattle, horses, sheep or goats, until 14 October 2006.
112. Secondly, these treatments must be carried out under strict veterinary oversight, by the
veterinarian himself, on farm animals which have been clearly identified and documented, and under
strict conditions of control and holding of the hormone (article 5a.3 of the new Directive). This is in
striking contrast to the availability of this horm one in the United States and Canada, as an "over the
counter product" (OTCs) which are freely available to every lay person.
113. Why were these uses authorised, and how do they meet the chosen level of protection of the
European Communities? The difference between the risks from the use of this and the other hormones
as growth promoters and of other uses arises from th eir differential impact on consumer exposure to
the hormone, as well as from the different level of oversight of these different uses. Contrary to
Canada's view, the European Communities has b ased its new measure precisely on available risk
assessments, in particular the SCVPH opinion which has considered the use of hormones as growth
promoters. Here it is used systematically and freely in almost every animal produced, whereas the
treatments for therapeutic and zoo technical purpo ses allowed in the European Communities, are only
allowed in few animals and rare occasions, in orde r to treat particular conditions, and on animals
under strict veterinary control.
114. These temporary exemptions, based amongst others on animal health and welfare, are still
under consideration. Besides, these therapeutic or zootechnical treatments pose no risk because the
animals are intended to be slaughtered in the near future. In practice, therefore, there is a huge
difference between the systematic use of growth promoting hormones in animals intended for beef,
compared with the occasional use by a veterinarian fo r treating a sick animal. If at all, the consumer
exposure from this kind of use cannot be compared to that resulting from the systematic use of growth
promoting hormones in all beef producing cattle. If all hormonal growth promoters are used in the
same manner as they are in the United States, 96% of a ll beef cattle in feedlots are implanted at least
once37, leading to a much higher exposure.
115. The other two treatments allowed by the European Communities are rare occasions. Specialist
veterinary practitioners have generally not more than one case per year. It is moreover highly unlikely

36 See Appellate Body Report, EC – Hormones, at paras. 221-225.
37 See NAHMS, 2000, cited by Scheffler et al., 2003.

that animals treated with these are slaughtered. In must be reiterated that the use for these purposes is
supported by the report of the Veterinary Medicina l Products of the European Community (CVMP) in
December 1999. It must be stressed that the purpose of the CVMP evaluation was strictly limited to
this kind of use only and did not consider the use of the hormones for growth promotion purposes, as
both the USA and Canada wrongly argue.
116. Moreover, as laid out in Directive 2003/74, the uses for therapeutic and zootechnical purposes
are authorised under conditional and provisional terms, and the reasons for it are explained in Recitals
11 and 12, and in the operative provisions of article 5a of the new Directive. Recital 11 states :
"However, the use of certain of the above substances, where this is necessary, for
therapeutic purposes or zootechnical treatment may continue to be authorised as it is
not likely to constitute a hazard for public h ealth owing to the nature and the limited
duration of the treatments, the limited quantities administered and the strict conditions
laid down in Directive 96/22/EC in order to prevent any possible misuse."
117. Recital 12 states :
"However, in the light of the existing information it is appropriate to limit as far the
exposure to oestradiol 17 β and only authorise those treatments for which no viable
effective alternatives exist. In general, th ere are alternative treatments or strategies
available to replace most of the uses of oestradiol 17 β for therapeutic or zootechnical
purposes. Nonetheless, studies appear to s how that at present no viable effective
alternatives exist in all the Member States for certain treatments which are currently
authorised. In order to allow for the necessar y adjustments and in particular for the
authorisation or the mutual recognition of the pharmaceutical products needed, it is
appropriate to phase out the use of oestradiol 17 β for oestrus induction over a given
period. It is also appropriate to maintain the possibility of authorising, under strict
and verifiable conditions so as to prev ent any possible misuse and any unacceptable
risk for public health, its use for the treatment of certain conditions (foetus maceration
or mummification and pyometra in cattle ) which have serious consequences for
animal health and welfare. It is necessary to review this possibility within a given
time."
118. According to the amended Directive, the zootechnical treatment temporarily authorised will
be phased out in October 2006. The two other therap eutic treatments authorised will be phased out in
relation to the outcome of a report on alternative methods, which is to be presented in October 2005.
Q21. Is there a regulation restricting the residue levels of the relevant six hormones in meat in
the EC's health regulations or in any other countries' health regulations? If not, why would
such a regulation not be a reasonable alternative to the EC's current definite ban on the use of
oestradiol – 17 β for growth promotion purposes and to the provisional ban of the use of the
other five hormones for the same purpose? Does the present EC measure eliminate similar
risks to human health arising from these hormones when used for other purposes?

119. No, the European Communities' legislation does not lay down maximum residue limits
(MRL) or other thresholds of unacceptable residue le vels for the relevant six hormones in meat. The
Member States of the European Communities do not have their own legislation on these matters
because they are pre-empted by Community law.
120. There are several reasons why it is neither a r easonable nor a sustainable alternative to the
current Community measure prohibiting permanently oestradiol 17 B and the other five hormones
provisionally for growth promotion. First, as cited in our reply to question 17, the JECFA itself

indicates that it is not possible to estimate the hormone intake from meat, which would be a
prerequisite for the design of such thresholds. The European Communities' scientists and experts
concur with that view, and are of the opinion that one can not set thresholds in this instance. Second,
one other important reason why residues limits are not fixed is that these hormones are also produced
endogenously both by the animals and humans at di fferent levels which vary considerably, which
also impairs the setting of fixed threshold values. Third, different values might have to be set for
different populations, according to their varying susceptibility to these hormones and hormone
residues, or whether they would be populations at risk or not. It is well established that variable limits
of residue levels for different populations would be practically impossible to implement.
121. Accordingly, and with the main objective of limiting the risks imbedded with additive intakes
from cumulative and uncontrolled sources, the European Communities has adopted its new
implementing measure as it now stands, namely a provisional or definitive ban, depending on the
hormone, with a very limited number of highly c ontrolled exceptions, pending further assessment. As
a consequence, and for the reasons explained above, thresholds of residues from the banned hormones
could not and have not been set.
122. As regards the second part of the question (t hat is does the present EC measure eliminate
similar risks to human health arising from these hormones when used for other purposes), the short
answer is yes.
123. The relevant Community legislation allows, wh ere appropriate, to take into account and to
provide for measures adapted to the different levels of risks presented by different uses. However, a
proper answer to this last part of the question s hould also clarify that the risks arising from the uses
authorised for other purposes, such as therapeutic and zootechnical purposes, are in fact either not
present or are not similar, but distinctly lower in magnitude, as explained in detail in our answer to
question 20. This is precisely referred to in recital 11 of Directive 2003/74 cited above.
38
Q22. Does the European Communities agree th at JECFA conducted new safety assessments
for two of the five hormones (progesterone and testosterone) in 1999 and reaffirmed their
safeness when used according to good veterina ry practice? JECFA also conducted risk
assessments with respect to three hormones since the 1980s and concluded that they are safe
within the recommended ADIs. Do the conclusion s of JECFA constitute "available pertinent
information" that shall be taken into account by the EC in its risk assessment and in the context
of Article 5.7 of the SPS Agreement? What are the EC's comments to the conclusions of the risk
assessments by JECFA? (US first written submission, para. 127)?

124. The European Communities agrees that JECFA has conducted, incidentally without being
asked, a new safety assessment on the use of progesterone and testosterone for growth promotion in
1999. The European Communities has asked JECFA to provide it with the underlying scientific
evidence that claims to have considered but it ne ver saw the basic information and raw data on which
it is based. This information appears to have been provided directly only to JECFA, probably pursuant
to exchanges with the industry, but it was not accessible to the European Communities, as was not
accessible the detailed safety assessment of the United States and Canada, and in particular the
detailed data on which it might have based its assessment. The European communities would
welcome any further attempts this Panel may lik e to undertake in order to obtain this underlying
information and make it available to it and the other parties to this dispute.

38 Moreover, an example is provided by Commission Regulation (EC) No 1873/2003, amending Annex
II to Regulation (EEC) No 2377/90, OJ L 275, page 9, 2003, regarding the use of progesterone for therapeutic
or zootechnical uses, the recitals of which explain in detail the conditions under which such used is authorised.

125. Do the conclusions of JECFA constitute "availabl e pertinent information" that shall be taken
into account by the European Communities in its risk assessment? Yes, the conclusions of JECFA do
constitute part of the pertinent information, and they were actually taken into account both by the
SCVPH that has issued the three scientific opini ons on the same hormone and the same uses, and by
the European Communities authorities that have drafted the new Directive 2003/74.
126. To comment more specifically on the conclu sions of the JECFA's risk assessments, the
European Communities would like to refer first to extracts from its own SCVPH opinions which
specifically addressed the JECFA assessment. Fo r example, the 1999 opinion of the SCVPH
discussed at several places the re-evaluation made by JECFA, as follows:
• 1999 SCVPH opinion (page 9). In a three generation study of rats receiving zeranol
at levels up to 0.20 ppm throughout gestation, it has been concluded that the fertility
of the offspring is not affected (JECFA, 1988). However, male mice exposed in utero
to zeranol (150 μg/kg of body weight injected on da ys 9 and 10 of gestation) show
testicular abnormalities (regressive changes in the germinal epithelium and Sertoli
cells, and immature morphology of Leydig cells) when testes are examined at 45 days
of postnatal life (Perez-Martinez et al., 1997). Moreover, in a multi-generational
study, it has been shown that trenbolone acetate, administered to female rats at dietary
concentrations of 3 and 18 ppb between 2 w eeks before mating and 3 weeks delivery,
exert effects on reproductive performance which are more marked in F2 pups than in
F1 pups of a comparable age. Indeed, fema le F1 pups from F1-treated parents show
signs of virilization, a delay in the mean vaginal opening and the presence of
occlusive strands in the vagina or inco mplete vaginal opening. Male pups show a
delay in the occurrence of testicular d escent and a decrease in weights of seminal
vesicle, prostate, testes an epididymis. In addition, in F2 pups from both sexes the
adrenal weight was also decreased (JECFA, 1988).

• 1999 SCVPH opinion (page 15). Experiments in rats, mice, hamsters, dogs, pigs,
cattle, sheep or monkeys have shown that exogenous sex hormones, including natural
steroids as well as growth promoters (such as trenbolone acetate, zeranol or
melengestrol acetate), administered by ingestion, injections or implants, induce
dosedependent deleterious effects on re production in males and females (JECFA,
1988).

• 1999 SCVPH opinion (pages 20, 27/28). Since the years when preceeding reports
were written, such as the FAO/WHO or JECFA monographs knowledge has greatly
increased, in particular on oestrogens. Different types of hormonal receptors (α and β)
have been identified and their functions be tter defined. Also, steroid metabolism has
been better studied. Genotoxic effects, independent from the presence of hormonal
receptors, have been recognized for me tabolites of the parent compounds. These
concern essentially catechol-oestrogens and corresponding quinones, in particular 4
hydroxylated derivatives (Service, 1998). In addition, activation reactions during
oestrogen metabolism contribute by oxidative stress to genotoxic effects. The
possibility of synergism between the genotoxic activity of selected oestrogen
derivatives and the classical promotional effect of steroïds cannot be excluded. A
crucial question is whether consumption of meat from cattle treated with hormones
under conditions approved in the USA vs non hormone-treated cattle, causes
increased exposure to these hormones. The fi rst step in this determination is a
calculation of the theoretical increased daily hormone intake when consuming beef
from treated as opposed to untreated animal s. The recent JECFA report (of February,
1999) presented calculations of a theoretical excess maximum intake ( μg/person/day)

of oestrogen (E2 +oestrone [E1]), testosterone and progesterone (see table A3). From
this overview, referring to products presently licensed in the USA, it is obvious that,
with the exception of pregnant heifers, the use of these growth promoting hormones
will result in an additional excess daily intake of oestrogens of 1.1 to 83.9 ng/person
(E2 + E1), of progesterone of 64-467 ng/ person, and of testosterone of 5-
189 ng/person. It is worthwhile to indicat e that these data refer to the parent
compounds only and do not include contributi ons from metabolites. It should also be
noted that these hormone implant-induced increases in hormone levels result in
oestrogen and testosterone exposur es below that which would occur upon
consumption of beef from pregnant heifer s. However, meat from pregnant heifers
accounts for only a relatively small amount of the beef consumed, as these animals
are slaughtered only incidentally.

• 1999 SCVPH opinion (page 28/29). The data show that premenopausal women have
the highest levels of endogenous oestrogen (oestradiol and estrone) and progesterone.
Oestradiol and progesterone production ra tes in premenopausal women during the
follicular phase have been determined to be approximately 445 μg/day and
418 μg/day, respectively (JECFA, 1987). During pregnancy, oestradiol levels rise
dramatically to approximate values of 18,000 pg/ml (Goodman, 1996). Oestradiol and
progesterone production rates during late pr egnancy have been determined to be
approximately 13,800 μg/day and 94,000 μg/day, respectively (JECFA, 1987). In
men, daily production rates for oestradiol and progesterone are approximately
48 μg/day and 416 μg/day, respectively (JECFA, 1987). In prepubertal boys,
oestradiol and progesterone production rates have been reported as being 6 μg/day
and 150 μg/day, respectively (JECFA, 1987). T hus, prepubertal and postmenopausal
women and prepubertal and adult men ha ve the lowest levels of endogenous
oestrogens and progesterone and thus woul d represent the individuals most likely to
be at increased risk for adverse health eff ects that might be associated with exposure
to exogenous sources of oestrogens. As exp ected, men have the highest levels of
blood testosterone and the daily producti on rate has been determined to be
approximately 6,500 μg/day (JECFA, 1987). Testosterone levels are much lower and
similar in women and prepubertal men. It has been reported that daily production
rates of testosterone are between 140 to 240 μg/day in adult women and 32 and
65 μg/day in prepubescent girls and boys, respectively (JECFA, 1987). These data
suggest that all women and prepubertal men represent the individuals at greatest risk
for adverse health effects that might be associated with exposure to exogenous
sources of testosterone.

• 1999 SCVPH opinion (page 33/34). 4.1. 17 β-oestradiol. 17β-Oestradiol (E2), estra-
1,3,5 (10)-triene-3,17β-diol, is an 18-carbon steroid hormone and the most potent of
the naturally occurring oestrogens. This hormone is produced primarily by the
developing follicle of the ovary in adult fe males. E2 exerts its pleotropic biological
effects on cell growth and differentia tion largely through receptor-mediated
mechanisms. E2 binds with high affinity a nd high specificity to intracellular proteins
know as oestrogen receptors (JECFA, 1988; JECFA, 1999; Anstead et a., 1997). Two
subtypes of oestrogen receptor (ER) are known, ER- α and ER- β. It is known that
these proteins can form both homo- and heterodimer complexes, yet current
information about the ER- β subtype is limited. The value of the dissociation constant
of E2 for the ER- α is in the 0.1-1.0 nM range (Anstead et al., 1997; Giguere et al.,
1998). The aromatic A-ring and 3-OH group of E2 are known to be important
components of the ligand binding activity and receptor activation activities of E2.

• 1999 SCVPH opinion (pages 34, 37). 4.1.2. Oestradiol disposition in the target
animal. After administration of oestradiol benzoate, the major metabolites found in
muscle were 17 α-oestradiol (38-70% of extracted radioactivity) and E1 (17-45%).
The pattern of metabolites in fat was simila r to that in muscle. The highest residues
were found in kidney and liver. The major oestrogenic metabolites in kidney were
17α-oestradiol, 17α-oestradiol-glucuronide, E2 and E1. In liver, the major metabolite
could not be identified (40% of the extracted radioactivity). E2, E1, estriol, and
glucuronides accounted for the remaining radioactivity (JECFA, 1988; Dunn et al.,
1977). The nature of the unidentified polar metabolites from livers of steers was
investigated in another study using radiolabeled E2. The major polar metabolite was
the β-Dglucopyranoside of 17 α-oestradiol. The 3- β-D-glucuronate of 17 α-oestradiol,
and other 17-glycosides of oestradiol were also characterized (JECFA, 1988; Rao et
al., 1979). Recent studies have begun to consider the formation in cattle of the major
oestrogen metabolites found in humans, i.e. the 2-OH, 4-OH and 16 α-OH-oestrogens.
While it is likely that these routes of metabolism are present in cattle, quantitative
measures are not yet published. At its February, 1999 meeting, JECFA established the
ADI for 17 β-oestradiol as 0-50 ng/kg bw/day. This value is based on a study in
postmenopausal women where conjugated equine oestrogens at doses of 0.3, 0.62. 1.2
and 2.5 mg were administered for two weeks followed by no treatment for three
weeks. This regimen was repeated four times after which serum levels of
corticosteroid binding protein (CBG) were determined. No increase in CBG levels
was detected at the 0.3 mg dose (equivalent to 5 μg/kg bw/day) which was thus
considered to represent the no-observed-effect level (NOEL). In another analysis (it is
not clear if this was part of the same study or a different one), the dose of 0.3 mg of
conjugated equine oestrogen was determined to be the NOEL for induction of serum
concentrations of follicle-stimulating hor mone, angiotensinogen, SHBG and CBG. It
was stated that fine-particle 17ß-oestradi ol and the conjugated equine oestrogens
were equipotent for all four hormone-dependent end points. In a separate study, the
bioavailability of fine-particle 17 β-oestradiol administered orally was determined to
be 5% compared to a dose administered intravenously. Sixty percent of the
fineparticle 17β-oestradiol dose was determined to appear in the serum as estrone and
estrone sulfate. While the results of these studies would appear to indicate that the
maximum excess exposure level (84 ng/pers on/day) for oestrogen derived from
hormone-treated beef is below the NOEL, th ere are several concerns. First, neither
the actual data nor references to peerreviewed publication of this data were available.
Second, it is uncertain whether the use of fine-particle 17 β-oestradiol, and in
particular conjugated equi ne oestrogens, represents appropriate surrogates for
consumption of oestrogens in association w ith beef. The equine oestrogens consist
predominately of equilin and equilenin, which are chemically different from
oestradiol. In the USA, the FDA has estab lished an acceptable level of exposure for
oestradiol (Table 3). These values represen t parent hormone residue levels in
uncooked meat that are considered unlikely to produce any physiological effects in
individuals chronically ingesting animal tissues.

Table 3: Acceptable levels of oestradiol levels in beef (Ref.: Code of Federal Regulations
(CFR) 21, Part 556, Tolerances for residues of new animals drugs in food)

Tissues Oestradiol (ng/kg)
Muscle 120
Liver 240
Kidney 360
Fat 480

 The FDA guidelines state that: "… no physiological effect will occur in individuals
chronically ingesting animal tissues that contain an increase of endogenous steroid
equal to 1% or less of the amount in micrograms produced by daily synthesis in the
segment of the population with the lowest daily production. In the case of oestradiol
and progesterone, prepubertal boys synthesize the least, in the case of testosterone,
prepubertal girls synthesize the least" (taken from Andersson and Skakkebaek, 1999).

• 1999 SCVPH opinion (page 46). 4.2.1. Pharmacokinetics and Biotransformation of
Testosterone in animals. Testosterone or testosterone propionate is administered by
subcutaneous implantation in the ear. The ear, along with any residual drug, is
discarded at slaughter. The dosage of testosterone varies with the manufacturer of the
implant, but is most often 200 mg per animal (JECFA, 1988). In the circulatory
system of the animal, testosterone derived from the implant is indistinguishable from
endogenous testosterone, i.e. enzymatic tr ansformation of the biologically active
molecule into less active metabolites. Excretion is predominately via the biliary route,
and to a lesser extent via the urine. In gene ral, the fraction of the hormone eliminated
in the urine is in the conjugated form, wh ile the fraction found in the feces is in the
free form. For testosterone propionate, enzymatic cleavage of the ester produces
testosterone which, is again metabo lized as the endogenous compound (Hoffmann
and Karg, 1976; Hoffmann and Evers, 1986).

• 1999 SCVPH opinion (page 47/48). At its February 1999 Meeting, the JECFA
established for testosterone an ADI of 0.2 ug/kg bw (14 μg/70 kg person) on the basis
of a study in eunuchs. This value includes a safety factor of 1000 to protect more
sensitive populations and because of the small number of subjects in the study used to
determine the NOEL. In that study, oral administration of a dose of 100 mg/day
(equivalent to 1.7 mg/ kg bw/day) of fine-particle testos terone to five eunuchs had no
effect on sexual function indexes while a dose of 400 mg/day restored full sexual
function. The dose of 100 mg/day was taken as the NOEL in this study. In another
study in postmenopausal women, treatment with 10mg/day methyltestosterone was
found to induce signs of virilisation. The ADI for testosterone established by the
JECFA (14 μg/person) is greater than the highest excess exposure to testosterone
(189 ng/person) that could occur from ing esting hormone-treated beef. However,
there are concerns regarding the strength of the study that provided the data for
determination of the ADI. First, neither the actual data nor reference to a peer-
reviewed publication was provided. Sec ond, the dose-response was limited to two
doses and the ADI was estimated from ju st a single dose where no effect was
observed, rather than a curve derived from a ll the data available. The tolerance levels
for testosterone levels in uncooked tissu es of steers and calves established by the
FDA (Ref.: Code of Federal Regulations (CFR) 21, Part 556, Tolerances for residues
of new animals drugs in food) are:

Tissue Testosterone ( μg/kg)
Muscle 0.64
Liver 1.3
Kidney 1.9
Fat 2.6

 Based on these levels, consumption of 500 g/day of beef (300 g muscle, 100 g liver,
50 g each of kidney and fat) would r esult in exposure to approximately
0.6 μg/person/day. The maximum excess exposure to testosterone estimated to occur
upon consumption of meat from hormone treated cattle, 189 ng/person/day (Table
A3, Annex) represents 33% of the acceptable level established by the FDA
(0.6 μg/person/day) which also represents approximately 1-2% of the daily
production rate for testosterone of 32 μg/day estimated for prepubertal girls.
However, there is considerable uncertainty associated with the validity of the daily
production rate data. It is possible that this value has been over estimated by one to
two orders of magnitude, in which case excess testosterone intake from hormone-
treated beef could at best exceed the 1% FDA safety margin and at worst be greater
than that naturally present.

• 1999 SCVPH opinion. Testosterone Levels in Human Blood. As expected, men have
the highest levels of blood testosterone (Table 1, section 4.1) and the daily production
rate has been determined to be approximately 6,500 μg/day (JECFA, 1987).
Testosterone levels are much lower and sim ilar in females and prepubertal males. It
has been reported that daily production ra tes of testosterone are between 140 to
240 μg/day in adult women and 32 and 65 μg/day in prepubescent girls and boys,
respectively (JECFA, 1987). These data sugg est that all females and prepubertal
males represent the individuals are greatest ri sk for adverse health effects that might
be associated with exposure to exogenous sources of testosterone.

• 1999 SCVPH opinion (page 51) 4.3. Progesterone. Progesterone, pregn-4-ene-3,
20-dione, is a C-21 steroid hormone and the most potent endogenous progestogen.
This hormone is present in all steroid pr oducing organs, and its production rate varies
widely as a function of the phase of a woman's menstrual cycle and pregnancy. The
major physiologic function of progesterone is to prepare the uterus for implantation
and to maintain pregnancy. The production of progesterone in the corpus luteum of
the ovary in adult females is contro lled by pituitary luteinizing hormone.
Progesterone is essential for uterine development, implantation, blastocyst
development and maintenance of the fetu s and the uterus during pregnancy.
Progesterone opposes some of the effects of oestrogens, and in non-pregnant females,
this hormone inhibits the cyclic rel ease of luteinizing hormone and follicle
stimulating hormone. The actions of prog esterone require prior stimulation with
oestrogens, perhaps to increase expression of progesterone receptor (PR). The PR is a
member of the steroid hormone superfamily of receptor proteins and mediates the
biologic activity of progesterone through gene regulatory mechanisms (Mahesh et al.,
1996; Katzenellenbogen, 1996). In animals, progesterone is used primarily in
combination with oestrogenic compounds in order to improve their rate of weight
gain and feed efficiency, and to suppress oestrus in feedlot heifers.

• 1999 SCVPH opinion (page 51). Progesterone is administered by subcutaneous
implantation in the ear. The ear, along with any residual drug, is discarded at
slaughter. The dosage of progesterone is 200 mg per animal (JECFA, 1988). In the
circulatory system of the animal, progesterone derived from the implant is

indistinguishable from endogenous progesterone (Baird et al., 1969). The metabolism
of progesterone in cattle has been investigated using radiolabeled compound
(Estergreen et al., 1977; Purdy et al., 1980; Lin et al., 1978). Animals were
administered progesterone, 50 μg/kg twice daily for 15 days. Each of the last three
injections contained 0.9 mCi [14C]-prog esterone and the animals were killed 2-3
hours after the final treatment. Most of the radioactivity in all extracts corresponded
to the parent compound (54% of the free radioactivity in muscle and 69 and 73% of
the free and conjugated radioactivity, respectively in fat), (Lin et al., 1978). The
major metabolites detected in muscle (16% of total radioactivity) included:
5α-pregnane-3, 20-dione (9%); 20-β-hydroxy-4-pregnen-3-one (8%); 3α-hydroxy-5β-
pregnan-20-one (13%); and 3 α-hydroxy-5α-pregnan-20-one (3%). The major
metabolite detected in fat (62% of the total radioactivity) was 20- β-hydroxy-4-
pregnen- 3-one (11%), (Estergreen et al., 1977). Little is known about the specific
enzymes in cattle that metabolize progesterone, although hepatic cytochrome P450
enzymes are likely involved in the metabolic clearance of this hormone.

• 1999 SCVPH opinion (page 52/53/54). 4.3.4. Assessment of excess exposure to
progesterone from consumpti on of hormone-treated beef. Table A3 (Annex) shows
that consumption of beef from hormone treated vs non-treated non-pregnant cattle
results in exposure to excess levels of progesterone ranging from 64 to
467 ng/person/day, depending upon the implant used. At its February 1999 Meeting,
the JECFA established for progesterone an ADI of 0-30 μg/kg bw (0-2,100 μg/70 kg
person). This value was based on studies where a lowest-observed-effect level
(LOEL) of 200 mg fine-particle progester one (equivalent to 3.3 mg/kg bw) was
determined and includes a safety factor of 100 to allow for extrapolation from the
LOEL to a NOEL. In one study, designed to explore anti-proliferative and secretory
endpoints in the endometrium, women were treated with 300 or 600 mg/day of fine
particle progesterone for two weeks following a thirty day pretreatment with
oestrogen. The group treated with the 300 mg dose showed incomplete conversion of
the uterus to full secretory activity whilst the group receiving the 600 mg dose did. In
an additional studies using 200 or 300 mg oral doses of progesterone for one or five
years, there was no evidence of endometrial hyperplasia or carcinoma. In addition, it
was stated that a single oral dose of 200 mg fine-particle progesterone produced
concentrations of progesterone in blood similar to those found during the luteal phase
of the ovulatory cycle. While these data indicate that the daily exposure from
consuming hormonetreated beef is well below the ADI, there is some concern
regarding determination of the ADI. First, neither the actual data nor reference to a
peer-reviewed publication was provided. Second, the dose-response was limited to
two doses and the ADI was estimated from ju st a single dose rather than a curve
derived from all the data available. The to lerance levels for progesterone levels in
uncooked tissues of steers and calves established by the FDA (Ref.: Code of Federal
Regulations (CFR) 21, Part 556, Tolerances for residues of new animals drugs in
food) are:

Tissue Progesterone ( μg/kg)
Muscle 3
Liver 6
Kidney 9
Fat 12

 Based on these levels, consumption of 500 g/day of beef (300g muscle, 100g liver,
50g each of kidney and fat) would r esult in exposure to approximately

2.6 μg/person/day. This amount represents approximately 1-2% of the daily
production rate for progesterone of 150 μg/day estimated for prepubertal boys, and
approximately 0.3% of the maximum excess exposure to progesterone estimated to
occur upon consumption of meat from horm onetreated cattle (Table A3, Annex).
However, there is considerable uncertainty associated with the validity of the daily
production rate data. It is possible that this value has been over estimated by one to
two orders of magnitude, in which case excess progesterone intake from hormone-
treated beef could at best exceed the 1% FDA safety margin and at worst be greater
than that naturally present.

• 1999 SCVPH opinion. Progesterone Levels in Human Blood: The data show that
premenopausal women have the highest leve ls of endogenous progesterone (Table 1,
section 3.1). Progesterone production rates in premenopausal women during the
follicular phase have been determined to be approximately 418 μg/day (JECFA, 1987
monograph). During pregnancy, progesterone production rates during late pregnancy
have been determined to be approximately 94,000 ug/day (JECFA, 1987 monograph).
In men, the daily production rate fo r progesterone is approximately 416 μg/day,
respectively (JECFA, 1987). In prepubertal boys, the progesterone production rate
has been reported to be 150 μg/day (JECFA, 1987). T hus, prepubertal and
postmenopausal females and prepubertal and adult males have the lowest levels of
endogenous progesterone and thus would represent the individuals most likely to be
at increased risk for adverse health effects that might be associated with exposure to
exogenous sources of oestrogens.

• 1999 SCVPH opinion (page 55-56). 4.4. Trenbolone. Trenbolone acetate (TBA),
17β-hydroxyestra-4,9,11-triene-3-one, is a synt hetic steroid with anabolic properties.
It is 8 to 10 times as potent as testosterone (Bouffault and Willemart, 1983). In
animals, TBA, alone or in combination with 17ß-ooestradiol, is used to improbe
weight gain and feed efficiency. This e ffect is most likely a consequence of the
anabolic acion of this androgen. The various TBA-containing implants, their
composition, and target animal are shown in Tables A1 and A2.

 4.4.1. Pharmacokinetics and biotrans formation of trenbolone in animals. TBA is
administered by subcutaneous implantation in the ear. The ear, along with any
residual drug, is discarded after slaughter. The dosage of TBA varies with
manufacturer of the implant, ranging between 40 and 300 mg per animal (JECFA,
1988). TBA upon entering the circulatory system is rapidly hydrolyzed to its active
free form, 17β-trenbolone (TBOH). In the bovine species, the 17α-epimer is the major
metabolite occurring in the excreta, bile and liver; the 17 β-epimer is the major
metabolite occurring in muscle (Jouquey et al., 1983). Elimination in the bile and
urine occurs following conjugation, predominately to glucuronic acid (Pottier et al.,
1979; Pottier et al., 1981). Also in blood plasma, conjugated TBOH has been
determined; 56 concentrations were 13% of those of free TBOH. In addition a
number of other metabolites have been id entified in bile. However, only trendion
seems to occur in some qualitative amounts. In 1978, Ryan and Hoffman (Ryan and
Hoffman, 1978) reported remarkable discrep ancies in residue concentrations as
determined by radiotracer studies and RIA; they concluded that the much lower
values obtained by RIA were due to the formation of covalently bound nonextractable
residues. This observation was further s ubstantiated (Evrard and Maghuin-Rogister,
1988), and in vitro studies (43) have dem onstrated the involvement of hepatic
cytochromes P450 in the formation of these type of residues. The metabolism of TBA
appears complex and species dependent. Furthe r investigations of both the metabolic

fate and the chemical nature of the cova lently bound residues is warranted (Metzler,
1999).

• 1999 SCVPH opinion. 4.4.2. Trenbolone disposition in the target animal. TBA is
rapidly metabolised to its free active form, alpha and beta TBOH. In cattle, the
β-epimer is the major metabolites in muscle. The concentrations of α- and β-TBOH,
free and conjugated have been measured in muscle, liver, kidney and fat of treated
cattle at various times after implantation. Table 8 shows the residue values for these
tissues at the time after implantation where the highest level of ß-TBOH was detected
in muscle. (Table 8: Residue Levels (ng/kg) of α- and β-TBOH (free + conjugated) in
tissues of treated cattle *30 days post implant; + free + conjugate; Data from
JECFA, 1987).

• 1999 SCVPH opinion. 4.4.3. Pharmacokinetics and biotransformation of trenbolone
in humans The metabolism of trenbolone in humans has not been extensively studied.
In one study, Spranger and Metzler (Spr anger and Metzler, 1991) examined the
disposition of 17- β-trenbolone in a single human subject administered 0.04 mg/kg
body weight. Urine was collected in fractions for 72 hours after ingestion. The
fraction of the first 3-h urine contained the highest concentration of radioactivity and
was used for the analysis of metabolites. Of the urinary material, 54 % was present as
glucuronides, which contained mostly 17 α-trenbolone, 17β-trenbolone and trendione.
At least five other polar metabolites, presumably hydroxylated products, were
detected in smaller amounts. A total of 54% of the administered radioactivity was
found in the urine after 26 hours, and 63% after 72 hours (Spranger and Metzler, 57
1991). Further analyses of the formation of polar metabolites of trenbolone is
essential to the assessment of the risk of rep eated dietary exposure of humans to this
compound.

• 1999 SCVPH opinion. 4.4.4. Assessment of exposure to trenbolone from
consumption of hormone-treated beef. Since TBA does not occur naturally, by
definition endogenous levels in humans should be zero. Thus, any residues detected
in the meat of treated cattle represent excess exposure to individuals consuming the
meat. The ADI for trenbolone acetate recommended by the JECFA(1987) for humans
was 0-0.1 µg/kg body weight based on a non-hormonal effect level of 2 µg TBA/kg
in a study in pigs. In 1988 the Expert Committee on Food Additives (JECFA), using
this same non-effect level established a temporary ADI of 0.01 µg TBA/kg body
weight (0.7 µg/70 kg person), and reco mmended a temporary Acceptable Residue
Level of 1.4 µg/kg bovine meat for β-TBOH on the basis of consumption of 500 g
meat by a 70 kg person. The FDA ( CFR 21, Part 556, Tolerances for residues of new
animals drugs in food ) has set tolerance limits for TBA levels in uncooked tissues of
cattle.

Tissue TBA ( μg/kg)
Muscle 50
Liver 100
Kidney 150
Fat 200

 Based on these levels, consumption of 500g of meat/person/day (comprised of 300g
muscle, 100g liver, 50g kidney and 50g fat) the acceptable daily consumption of TBA
could reach 43 µg/person/day, an amount considerably greater than recommended by
the JECFA. This value greatly exceeds the recommended ADI. The toxicological

issues of concern include endocrine, deve lopmental, immunological, neurobiological,
immunotoxic, genotoxic and carcinogenic effects. Specific hazardous effects are
detailed below.

• 1999 SCVPH opinion. 4.4.5. Mutagenicity and genotoxicity 17β-Trenbolone
(β-TBOH) is a synthetic androgen. 17 α-trenbolone (α-TBOH) is a metabolite formed
in cattle. Both, the parent compound and its metabolite ( α-TBOH), have been
extensively tested for their mutageni c/genotoxic potential. The results are
summarized as follows (table 9).

• 1999 SCVPH opinion. ( Table 9: Mutagenicity testing of trenbolone and its
metabolite). Both 17α- and 17β- TBOH gave the same results. As the 17 α-metabolite
is more weakly androgenic, it might be concluded that the genotoxic effects of TBOH
are not related to their hormonal activity. The ability of 17 β-TBOH to transform
Syrian hamster embryo cells has to be noted (Lasne, et al., 1990), although another
laboratory found negative results at all concentrations tested (Tsutsui, et al., 1995).

• 1999 SCVPH opinion. 4.4.6. DNA adducts and DNA damage. Covalent binding of
[3H]17β-TBOH to DNA was observed after incubation with rat liver
postmitochondrial supernatant in vitro and in rats in vivo after oral or i.p.
administration (Lutz et al., 1988). Binding of TBOH to rat liver DNA was also
observed by Barraud et al. (1984) and Petit et al. (1989). Formation of DNA adducts
is also observed in rat hepatocytes cultured with 30 μM β-TBOH (Metzler, 1999).

• 1999 SCVPH opinion. 4.4.7. Carcinogenicity. Feeding of high doses of Trenbolone
acetate (TBA) to mice induced a significant amount of liver hyperplasia and tumors;
in rats a slight increase in islet-cell tumors of the pancreas was observed (WHO
Technical Report No. 696, 1983). A 2-year carcinogenesis bioassay in male and
female rats and mice did not provide de finitive results on the carcinogenicity of
β-TBOH (mentioned in Schiffman et al., 1988). In humans, no data are currently
available to assess the carcinogenicity of tre nbolone. In conclusion, in consideration
of the lack of in vitro short-term assays on mutagenicity and genotoxicity of other
TBOH metabolites other than α-TBOH, and in consideration of the equivocal results
of cell transformation assays and the in vivo studies, the available information is
insufficient to complete a quantitative risk assessment. It has also to be noted that a
considerable fraction of TBOH residues seems to be covalently bound to tissues.

• 1999 SCVPH opinion. 4.4.8. Effect of trenbolone on growth and reproduction.
Deleterious effects of trenbolone acetate exposure were reported in the reproduction
of both male and female mammals of va rious species (JECFA, 1988). In the adult
male, trenbolone acetate administered by ingestion, injections or implants induces a
decrease in testis, seminal vesicle and prostate weights and alterations in
spermatogenesis. In the adult female, such treatments induce virilization and
alteration or suppression of ovarian cycles. In a study involving women volunteers
given i.m. doses of 10 mg trenbolone acetate every-other-day during 14 days,
disturbances of the menstruation cycle have been reported. Some data in rodents
indicate that administration of trenbolone acetate during the intrauterine or/and
perinatal period alters the reproductive function in adults. In a multi-generation study,
it has been shown that trenbolone acetate, administered to female rats at dietary
concentrations of 3 and 18 ppm between 2 weeks before mating and 3 weeks after
birth of youngs exerts effects on reproductive performance which are more marked in
F2 pups than in F1 pups of a comparable age. Indeed, female F1 pups from F1-treated

parents show signs of virilization, a de lay in the mean vaginal opening and the
presence of occlusive strands in the vagina or incomplete vaginal opening. Male pups
show a delay in the occurrence of testic ular descent and a decrease in weights of
seminal vesicles, prostate, testes and epid idymis. In addition in F2 from both sexes,
the adrenal weight is also decreased (JECFA, 1988). These data do not allow a
realistic assessment of a dose response relationship.

• 1999 SCVPH opinion. 4.4.9. Effects of trenbolone on the immune system.
Investigations on the effects of trenbolone on the immune system are very limited. A
slight, but non statistically significant, immuno depression was seen in male calves
given SC implants of trenbolone acetate (140 mg). A statistically significant change
was observed when a combination of trenbolone acetate and oestradiol (20 mg) was
used. No such change was seen with oestradiol alone. In female calves no such effects
were observed (Gropp et al., 1975). In conclusi on, this information is insufficient to
assess the possible impacts of low levels of trenbolone in meat and meat products on
consumers.

• 1999 SCVPH opinion. 4.5. Zeranol. Zeranol ( α-zearalanol) is an oestrogenic
derivative of the mycooestrogen zearalenone. This oestrogen depresses the
endogenous gonadotropins, lute inizing hormone and follic le stimulating hormone.
Zeranol binds to the oestrogen receptor in swine, rats and chickens with a binding
affinity similar to that of DES, which is much greater than that of oestradiol
(Fitzpatrick, et al., 1989). In rat liver, zer anol was shown to bind to the oestrogen
receptor and to DNA in a manner similar to that of oestradiol (Mastri, et al., 1986).
Dietary administration of castrate female Rhesus monkeys for two consecutive days
provided a no-effect level of 1 mg/kg/ day (Fuller, et al., 1982). The zeranol-
containing implants and target animals are summarised in Table A2 of the Annex.

• 1999 SCVPH opinion. 4.5.1. Pharmacokinetics and biotransformation of zeranol in
animals. The half-life of zeranol plus its metabolites in the blood was 26 h in New
Zealand rabbits and 18 h in Rhesus monkeys (Migdalof, et al., 1983). Glucuronide
and sulfate conjugates were found in the urine. Both zearalenone and taleranol
(isomeric β-zearalanol) have been found as metabolites of zeranol in cattle (Sharp and
Dyer, 1972; Duchatel and Maghuin-Rogister, 1985; Jansen, et al., 1986; Kim, et al.,
1986). When zeranol was metabolized by uninduced or Arochlor-induced rat liver
microsomes, five new metabolites, te ntatively identified as monohydroxylated
derivatives, and small amounts of taleranol and zearalenone were observed (Metzler,
1999). Three of the five monohydroxylated de rivatives of zeranol were also observed
with bovine liver microsomes.

• 1999 SCVPH opinion. 4.5.2. Zeranol disposition in the target animal. In a study of
cattle implanted in the ear with 30 mg of tritium-labeled zeranol, the tissue residues
peaked at 5-15 days and then slowly decreased (Tarr, et al., 1984). At 65 days,
approximately 60% of the initial dose remained at the implant site. The maximum
residue level occurred in the liver and never exceeded 10 μg/kg, whereas the residue
level in muscle did not exceed 0.13 μg/kg. In cows implanted with Ralgro (36 mg)
and slaughtered 70 days later, the average values of zeranol determined by a
radioimmunoassay were 0.127 μg/kg in muscle, 0.184 μg/kg in fat, 0.299 μg/kg in
liver and 0.157 μg/kg in kidney (Dixon and Mallinson, 1986). In steers implanted
with Ralgro (36 mg) and slaughtered 70 days later, the levels of zeranol in liver,
kidney, muscle and fat were 0.200, 0.126, 0.725 and 0.073 μg/kg (Dixon, et al.,
1986).

• 1999 SCVPH opinion (page 60). Male pups show a delay in the occurrence of
testicular descent and a decrease in weights of seminal vesicles, prostate, testes and
epididymis. In addition in F2 from both sex es, the adrenal weight is also decreased
(JECFA, 1988). These data do not allow a realistic assessment of a dose response
relationship.

• 1999 SCVPH opinion. The convention used by JECFA as the basis for determination
of daily consumption of hormones is b ased on eating 500 g of meat per day (300g
muscle, 100g liver, 50g kidney and 50 g fat). Based on this and the acceptable
oestradiol levels in beef shown in Tabl e 3, total daily consumption of currently
acceptable levels of oestradiol would be 102 ng. This value represents approximately
1-2% of the currently used calculated daily production rates for oestradiol in
prepubescent children. As mentioned previously in the Exposure Considerations
Section, the daily production rate for oestradiol was estimated to be 6 μg/day
oestradiol in boys. These daily production rate (PR) values are determined by the
formula: PR ( μg/day) = plasma concentration ( μg/ml) x metabolic clearance rate
(MCR, ml/day). However, there are two pot ential problems with these values. First,
as mentioned previously (Exposure Considerations Section), determination of plasma
concentrations of oestradiol is subject to considerable variability, relative insensitivity
given its low levels in children, and in terference. A new, highly specific, more
sensitive assay for oestradiol indicated that blood oestradiol levels in girls may be as
much a 13 fold less and in boys 100 fold less than previous determinations using
RIAs indicate. Second, it does not appear that MCRs have ever been determined
directly in children. Rather, it appears as if MCR values from adult women were used
in the calculations of the PRs for child ren (Andersson and Sk akkebaek, 1999). This
approach may or may not be valid given the known differences in levels of SHBG
(higher in children, which would reduce clearance), and likely differences in uptake
and metabolism, etc. Given these issues, it is possible that the safety margin for
oestradiol exposure used by the FDA may be in error and that acceptable levels of
hormone residues in beef could be much lower. (Similar concerns apply to
progesterone and testosterone). The median level of excess exposure to oestradiol
from consuming meat from hormone-treated cattle is 6.8 ng/person/day (calculated
from Table A3, Annex, range 1 to 84 ng/ person/day). For comparative purposes,
assuming 100% absorption and a whole blood volume of 78ml/kg body weight, for a
40 kg child, based on the median value for excess oestrogen exposure, the blood
concentration calculates to be 2.2 pg/ml (1 to 26 pg/ml). If the blood oestrogen levels
are 100 fold lower than previously determined and the MCR too high by a factor of
10, the oestradiol daily production rate coul d be as low as 6 ng, and 1% of this would
be 60pg. Thus, the FDAs acceptable daily intake (102 ng/person/day, see above)
could exceed the daily production rate of o estradiol by 1,700 fold. While there is
some experimental evidence in support of the currently used blood levels of
oestradiol being 100 fold too high (Klein et al., 1994), the other assumptions used in
coming to this conclusion may be too conser vative. Thus, if absorption is reduced to
10% and the MCR for children is only 1/2 that of adults, the FDA acceptable daily
intake could still be 85 fold too high. Give n all of the uncertainties in these estimates,
it appears that the data are insufficient to form the basis of a sound risk assessment.
Clearly, this is an important area for additional research.

• The question is whether the risk assessments of the five hormones by JECFA in
1987/1989 and of MGA by the US and Canadian authorities were based on evidence
focusing specifically on the lack of carcinogenic, genotoxic, or endocrine effects of

the residues of these hormones in bovine meat and meat products? The risk
assessment by JECFA in 1987/1989 was based on hormonal effects only and no
excess exposure was envisaged, the genotoxic and carcinogenic potential of residues
in meat and meat products was not considered. More recent work on
biotransformation mediated genotoxicity (c ited also in the JECFA 199 report) shows
that no threshold can be defined eith er for the endocrine, developmental,
immunological and neurobiological effects or for their potential immunotoxicity and
carcinogenicity. This statement is also made in the light of the emerging concerns of
the effects of hormones at different stages of life and the accumulating
epidemiological findings on tumor inciden ce as summarized by IARC. The SC also
acknowledged that recent findings on the metabolism based genotoxicity of 17-ß
oestradiol (see chapter 2.5 of the 1999 report) it has to be stated that the assumption
that the carcinogenic potential is exclusivel y related to the hormonal activity is no
longer valid. In addition it is worthwh ile mentioning recent improvements in
analytical techniques applied in the measurement of physiological hormone levels.
The introduction of more sensitive and sp ecific bioassays/oestrogen receptor assays
(as outlined in detail in the text of the repor t) indicated that a critical reappraisal of
the endogenous hormone levels in certain segments of the human population, such as
prepubertal boys and girls is required.

127. The 2002 opinion of the SCVPH moreover considered the report on melengestrol acetate
prepared by the 54th meeting of JECFA.
128. In summary, the European Communities consid ers that the assessments of JECFA mentioned
above have suggested that it is unnecessary to set maximum residue limits (MRLs) for oestradiol 17ß,
testosterone and progesterone because they consid ered that residues resulting from the use of these
substances as a growth promoter in accordance w ith good animal husbandry practice are unlikely to
pose a hazard to human health. But for zeranol a nd trenbolone acetate MRLs have been proposed by
JECFA.
129. However, as already explained the above-menti oned JECFA reports found that oestradiol 17ß
"has genotoxic potential " and that the evidence for progesterone was interpreted " on balance" as not
having genotoxic potential. On the basis of these findings, JECFA did consider for the first time that
ADIs were necessary to be fixed but not MRLs , because of the endogenous production of these
natural hormones and the difficulties in applying the available detection methods in order to
determine the origin of any residues in meat. But the European Communities could not adopt the risk
management options proposed by JECFA, because the scientific risk assessment of the SCVPH did
not come to the same conclusions as those of JECFA (see the passages from the SCVPH opinion
listed above). One of the difficulties of the JECFA reports, for instance, is that JECFA's traditional
mandate does not allow it to examine all risk mana gement options but restricts it to either propose
MRLs or not. Therefore, after the examination of the full range of risk management options and
taking into account the potential advantages and disadvantages as well as consequences and feasibility
of risk management options (in particular that of control), the European Communities regulatory
authorities concluded that the prohibition of the u se of hormones for growth promotion within the
European Communities and the exclusion of import of meat derived from animals treated with
hormonal growth promoters was the most appropriate measure in order to protect its consumers from
the risks identified from excess intake of hormone residues and their metabolites and the potential for
abuse, inter alia, through non-observance of good husbandry practices. In other words, the European
Communities came to the conclusion that the JECF A's recommendations could not achieve the level
of health protection considered appropriate by the European Communities in its territory from
residues of these hormones under realistic conditions of use for animal growth promotion.

Q23. Does the European Communities agree th at the re-evaluation of the risks of
progesterone by the Committee for Veterinary Me dical Products in 1999 concluded that this
hormone is safe when used according to good ve terinary practice? If so, has the European
Communities taken this conclusion into account in its overall risk assessm ent process? If not,
why has this conclusion not been considered? Wh at are the arguments that have precluded this
conclusion from being used as the basis of th e EC's measure for progesterone (US first written
submission, para. 128)?

130. The European Communities would like to recall that the Appellate Body has reversed the
panel's findings on the issue concerning the occasi onal use of the naturally occurring hormones for
therapeutic or zootechnical purposes.
39 Therefore, arguments of this kind by the defending parties in
the context of these proceedings attempt to reintroduce a debate that they have lost at the Appellate
Body level. A short reply to this question, therefore, is that this issue is now irrelevant.
131. However, the European Communities will provide some information on this question. Indeed,
the SCVPH opinions, and in particular the opinion of April 2002, have indeed taken the CVMP's
1999 assessment on progesterone into account, notably in the light of the new scientific studies
available by 2002. Hence, the European Commun ities' overall risk assessment of progesterone use as
growth promoter in cattle has duly taken this opi nion into account, as evidenced in recital 7 of the
new regulation on progesterone (Commission Re gulation (EC) no 1873/2003/EC mentioned above),
40
which explicitly cites the CVMP conclusions and e xplains how they are taken into account, as a basis
for the new provisional ban on progesterone.
132. The arguments that have precluded the conclusion of the CVMP's from being used as the only
basis of the EC's measure for progesterone as a growth promoter are the following : First, new
scientific evidence had appeared since, and the SCVPH opinions, within their own assessment for its
use as a growth promoter, had identified risks, whic h were incompatible with the level of health
protection which the European Communities applies to these hormones when intended to be used for
animal growth promotion purposes.
133. Secondly, it would be more correct to states that the "qualifier" of the CVMP conclusion
would rather be when progesterone is used in veterinary medicinal products authorised in accordance
with the relevant Community legislation, whic h would exclude "over the counter" products freely
available to a layman, outside any veterinary c ontrol. In reality, the CVMP risk assessment on the
possible need to establish MRLs for progesterone w as evaluated only for therapeutic or zootechnical
purposes and not for animal growth promotion purposes, as the defending parties wrongly argue. The
assessments of the risks from the CVMP and from th e SCVPH were, therefore, for different purposes
and it is not possible to extrapolate the conclusi on of one Committee made for one specific use, as
explained above.
Q24. Does the European Communities agree with the United States that a risk assessment
includes four steps: (i) hazard identification , (ii) hazard characterization, (iii) exposure
assessment, and (iv) risk characterization? What is the EC's response to the US argument that
the EC failed to proceed from identifying hazards to characterizing hazards and to assessing the
exposure in order to demonstrate a specific ri sk to consumers (first US written submission,
para. 42)?

39 See Appellate Body Report, EC – Hormones, at paras. 221-225.
40 Commission Regulation (EC) No 1873/2003 of 24 October 2003 amending Annex II to Council
Regulation (EEC) No 2377/90 laying down a Community procedure for the establishment of maximum residue
limits of veterinary medicinal products in foodstuffs of animal origin.

134. The European Communities does not agree with the United States unfounded claim that the
EC would not have followed intern ationally recognized standards of risk assessment (in the narrow or
strict sense mentioned in the Codex Alimentarius Commission principles on risk analysis, as
explained with the reply to Question No 16 a bove), and find this kind of criticism unfounded and
irrelevant.
135. First, it has to be clarified that, as defined by the Codex Alimentarius Commission, risk
assessment is normally considered to be only the first component of a three part process, known as
risk analysis. It is the scientific process which is intended to provide the competent regulatory
authority with the information required to allow it to decide on the measures necessary to reduce the
risk from a particular hazard to a level that is considered acceptable in its territory and under the
conditions prevailing therein.
136. The United States and Canada make little or no re ference to risk management, which is the
second component and an integral part of the intern ationally agreed process of risk analysis, which
has to be completed after the completion of the four steps of risk assessment.
137. This second part of risk management is the process "of weighing policy alternatives in the
light of the results of risk assessment and, if requi red, selecting and implementing appropriate control
options, including regulatory measures". And as the Appellate Body indicated in its report, in
agreeing with the European Communities, setting th e level of health protection is the autonomous
right of the authority responsible for risk management.
138. For instance, as regards the use of these horm ones for animal growth promotion in the
circumstances prevailing in the European Communities, its authorities have determined at the risk
management stage of the risk analysis, on the basi s of the scientific risk assessments that the SCVPH
had performed on its behalf, that the addition to the food chain, whether of naturally occurring or
synthetic hormones, is an avoidable risk, which need s to be prevented in order to meet the chosen
level of health protection.
139. But to come back to the scientif ic assessment of the risks itself, as the first component of risk
analysis, it is performed in the European Commun ities by advisory bodies composed of independent
experts, such as the SCVPH, as it is laid down in the relevant legislation that is generally applicable.
The United States cites four general steps which are identified internationally (albeit not always with
the name cited by the United States), as being relevant for the risk assessment (at the first stage in risk
analysis), but not the risk analysis itself.
140. The European Communities of course follows these four components or steps, as does all
advisory bodies performing internationally recognised assessments of risks.
41 It has to be noted,
however, that which ever approach is followed, they are all based on a deterministic approach to risk
characterisation (the level of exposure amounts proporti onally to the level of risk for a given hazard),
have serious limitations in non-linear situations, su ch as in the current case regarding these hormones.
Here, the risks are embedded in changes in expos ure to biologically active molecules which may,
within minute differences in their bioavailability, ha ve dramatic effects, such as turning on or off
complete developmental programs of the human genom e, or inducing pathological conditions. This is
a classical non linear situation, which is poorly addressed by the risk assessment guidance currently
available from the Codex Alimentarius Commission.

41 For instance, another internationally recognised approach for risk assessment is made of three steps:
hazard characterisation (in fact the se verity of each identified hazard), proba bility of occurrence, and the risk
being then conceptually characterised as the product of the hazard (danger) by its probability of occurrence.

either the parent compound or the metabolit es. Residue analysis has focussed in the
past on the quantification of the amounts of residues of the parent compounds and
those metabolites exerting hormonal activity. Recent data indicate that other
metabolites occur additionally which have genotoxic activity. For example, 17-ß
oestradiol can be metabolized to 2-OH, 4-OH and 16 α-OH oestrogens. Particular the
2-OH, and 4-OH oestrogens have been found to be directly or indirectly genotoxic.
This implies that 17-ß oestradiol may act as tumor initiator as well as tumor promoter.
These findings are in agreement with epid emiological data and resulted in the
classification of 17-ß oestradiol as human carcinogen (Group 1 according to the
IARC classification). This implies that an y excess exposure towards 17-ß oestradiol
and its metabolites resulting from the cons umption of meat and meat products
presents a potential risk to public health in particular to those groups of the
population which have been identified as pa rticularly sensitive such as prepubertal
children. It should be noted that for these genotoxic metabolites in bovine tissues, no
threshold level can be established. In add ition, no threshold level can be established
for any of the hormonally active compounds and metabolites which might exert
endocrinal, developmental and neurobiological, immunological or
immunotoxicological effects.
With the exception of 17-ß oestradiol, th e currently available information for
testosterone, progesterone and the synt hetic hormones zeranol, trenbolone and
particularly MGA has been considered inadequate to complete an assessment.
This conclusion is based upon:
– incomplete data on the biotranfor mation pathways of these compounds and
the possible biological activity of the metabolites formed in bovine tissues as,
for example, testosterone might be aromatized to oestradiol.
– lack of data on the potential genotoxicity of these metabolites in
consideration of the current state of the art for genotoxicity testing as
indicated in the answer to question 2 (a).
– insufficient data on immunological and immunotoxical effects.
Based on experimental and epidemiological data, testosterone and progesterone have
been classified by IARC as Group 2 substances - probable/possible carcinogens in
humans. No epidemiological data are available for zeranol, trenbolone and MGA
(melengesterol acetate) although residues of hormonally active compounds in
(poultry) meat have been shown to exert an oestrogenic response in prepubertal
children in certain countries.
Thus, no final conclusions can be drawn with respect to the safety of at least five out
of the six substances under consideration, until the above described issues have been
clarified. For oestradiol genotoxicity has already been demonstrated explicitly."
148. Moreover, it has done this hazard characterisati on as regards also the particularly vulnerable
segments of the population that may be exposed to these identified hazards, that is prepubertal
children. The 1999 SCVPH states, inter alia, on this issue:
"In acknowledging the recent findings on the metabolism based genotoxicity of 17-ß
oestradiol (see chapter 2.5 of the report) it has to be stated that the assumption that the
carcinogenic potential is exclusively relate d to the hormonal activity is no longer

valid. In addition it is worthwhile mentioning recent improvements in analytical
techniques applied in the measurement of physiological hormone levels. The
introduction of more sensitive and specifi c bioassays/oestrogen receptor assays (as
outlined in detail in the text of the report) indicated that a critical reappraisal of the
endogenous hormone levels in certain seg ments of the human population, such as
prepubertal boys and girls is required."
Q26. Is "exposure assessment" a necessary element of the risk assessment? Please explain the
EC exposure assessment in terms of the Opinio ns? Has the European Communities conducted
an analysis comparing the actual residues of the hormones in meat from cattle not treated with
growth-promoting hormones with those in meat from cattle treated with hormones according to
good veterinary practice? What is the health ri sk to humans associated with the pathway of
oestradiol 17 β used in animals for therapeutic and zootechnical purpose?

149. The last part of the question on therapeutic and zootechnical purposes, apart from being
legally irrelevant in view of the Appellate Body findings mentioned above, has been largely addressed
in the replies to the previous questions, in par ticular question 20, and will not be addressed here
anymore.
150. This being said, in the case of the six horm ones, the European Co mmunities has performed
exposure assessments systematically when it was ab le to do so, as detailed in the three SCVPH
opinions.
151. As regards the question whether the European Communities has performed an "analysis of
comparing the actual residues of the hormones in m eat from cattle not treated with growth-promoting
hormones with those in meat from cattle treat ed with hormones according to good GVP", the
European Communities has already explained with its reply to Question 17 above, that it considered
in its assessment the potential risks resulting fro m the actual residues from non-treated as well as
treated animals for growth promotion, and came to the conclusion that under realistic conditions of
use such residues from treated animals for growth promotion do pose a higher risk and could not
achieve the level of protection it has considered a ppropriate in its territory. As discussed before, for
the purposes of exposure assessment from the residues of these hormones, it is not so much necessary
to compare (if it were only possible! ) the two situ ations and then try to quantify how much one is
more risky than the other and to what measurable level the risk is likely to occur, but rather to assess a
situation of additive risks arising from the cumu lative exposures of human to multiple hazards, in
addition to the endogenous production of some of these hormones by the animals and the human
beings. For those reasons, the European Communities has determined, at the risk management stage
of the risk analysis, on the basis of the scientific risk assessment that the SCVPH had performed on its
behalf, that the addition to the food chain of an y level of residues from the exogenous administration
of these hormones to animals for animal growth promotion purposes is an avoidable risk, which needs
to be prevented in order to meet its chosen level of protection.
152. Furthermore, one would also like to know what exactly the defending members have done in
this respect, since the risk assessments they claim to have performed are very old by today's standards
(dating from the 70's in most cases). Have the Unite d States and Canada, or any other WTO member,
actually done this kind of exposure assessment, when they decided to authorise these hormones for
animal growth promotion purposes? Could they communicate the results of their assessment on this
specific point to the Panel and other parties to this dispute?
153. Finally, it should again be clarified that whereas the original Panel concluded that "potential"
means "probable", the Appellate Body concluded (at para. 184) that the use of this term gave cause
for concern, noting that this introduces a quantitative dimension to the notion of risk, also noting that

the ordinary use of "potential" relates more to th e word "possible". Otherwise, it argued, there would
be an implied need for a quantitative assessment of risk. The Appellate Body clearly judged that a risk
assessment can be either qualitative or quantitative. Thus, the panel implication in the hormones case
that there must be a minimum magnitude of risk was rejected by the AB (at para. 186). The
submissions from US and CAN in the context of the present dispute, however, seek again to impose
the need for a quantitative assessment and a minimum level of risk. This has failed once and should
fail again. The US and CAN submissions misrepresent certain other elements of a risk assessment. For
example, the US 1st written submission (at para. 143) equates hazard characterisation with dose
response. Although the Codex Alimentarius recomme ndations on risk analysis urge that a dose
response assessment should be carried out where possibl e, this is not the central issue in hazard
characterisation. According to Codex Alimentari us, the central element is "---a qualitative or
quantitative description of the severity and duration of adverse effects ---". The EU has demonstrated
the potential adverse effect, but has been unable to quantify it in a precise manner. No one, on the
other hand, can doubt the severity of a carcinogenic effect, both pathologically and psychologically.
It is quite clear that the potential effect of a car cinogenic substance is substantially greater than, for
example, the effects of most microbiological agents. It is clear that this risk can be avoided or at least
not added to the burden resulting from the naturally-occurring hormones and residues from other
sources. There is no good reason to deny the consumer in the European Communities this higher level
of protection.
Q27. Could the European Communities provide the Panel with the relevant data and analysis
leading to the conclusion that "misplaced im plants and repeated implanting seem to occur
frequently, represent a considerable risk that high ly contaminated meat could enter the food
chain" in the SCVPH's 2002 review Opinions (US first written submission, para. 145)?

154. There was indeed a specific study taken in to account in the SCVPH 2002 opinion that has
addressed this issue. The European Communities provi ded it to the Panel with the exhibits attached
with its reply to question no 16 (as Exhibit EC-6 (U S) and Exhibit – EC 4 (CAN)). It is the study
concerning the application of anabolic agents to food producing animals - health risks through
disregard of requirements of good veterinary practice. This multifaceted study has given rise to a
number of scientific publication in peer reviewed journals. They are the following:
(1) "Detection of melengestrol acetate residues in plasma and edible tissues of heifers",
The Veterinary Quarterly 21: 154-158, 1999.

(2) "Detection of anabolic residues in mispl aced implantation sites in cattle", Journal of
AOAC International 83(4); 809-819, 2000.

(3) "Suppression of androstenone in entire ma le pigs by anabolic preparations",
Livestock Production Science- 69: 139-144, 2001.

(4) "A sensitive enzyme immunoassay (EIA) for the determination of Melengestrol
acetate (MGA) in adipose and muscle ti ssues", Food Additives and Contaminants
18(4):285-291, 2001.

(5) "Characterisation of the affinity of diffe rent anabolics and synthetic hormones to the
human androgen receptor, human sex hormone binding globulin and to the bovine
progestin receptor", APMIS 108: 838-846, 2000.

(6) "Dose-dependent effects of melengestrol acetate (MGA) on plasma levels of
estradiol, progesterone and luteinizing horm one in cycling heifers and influences on
oestrogen residues in edible tissues", APMIS 108: 847-854, 2000.

(7) "Hormone contents in peripheral tissues after correct and off-label use of growth
promoting hormones in cattle: Effect of the implant preparations Finaplix-H®,
Ralgro®, Synovex-H® and Synovex Plus®", APMIS 109: 53-65, 2001.

(8) "Tissue-specific expression pattern of estrogen receptors (ER): Quantification of ER_
and ER_ mRNA with real-time RT-PCR", APMIS 109: 345-355, 2001.

Q28. Has the European Communities considered the general low bioavailability of the six
hormones at issue in its risk assessment? What is the EC's response to the US argument that
JEFCA's risk assessment has indicated that oestradiol is generally inactive when given orally to
humans (5% bioavailability)? In what way does this factor of low bioavailability affect the
exposure assessment? Could the European Communities point out its analysis concerning the
occurrence of health risk to consumers via the specific pathways at issue?

155. Yes, the general bioavailability of the six hor mones at issue was considered in the risk
assessment of the European Communities. The 1999 opi nion of the SCVPH explains for each of the
six hormones the evidence relating to their bioava ilability. For instance, as regards oestradiol, the
1999 opinion states (on page 36) that:
"4.1.4. Pharmacokinetics and biotransformation of 17β-oestradiol in humans.
The oxidative metabolism of endogenous oest rogens is known to occur at several
positions including carbons C-1, C-2, C-4, C- 6, C-7, C-11, C-14, C- 15, C-16, and
C-18. The major oestrogens detected in serum and urine are the 2-hydroxylated
metabolites. The liver is the primary site of oestrogen metabolism, where rates of 2-
and 16 α-hydroxylation, catalysed by P4501A2, P4503A3 and P4503A4, greatly
exceed that of 4-hydroxylation. Because 4- hydroxylated metabolites represent only a
small percentage of the total amount of oestrogens detected in the urine,
4-hydroxylation has been considered a minor metabolic route of metabolism.
However, it is now understood that extrah epatic tissue 4-hydroxylation of E2 may
play a significant role in oestrogen homeostasi s. In several organs which are sites of
oestrogen-induced tumours, the rate of E2 4-hydroxylation equals or exceed the rate
of 2-hydroxylation, and in comparison to normal tissue, elevated E2 4-hydroxylase
activity has been observed in samples prepar ed from breast and uterine tumours. In
humans, cytochrome P4501B1 has been identified as the most significant E2
4-hydroxylase. This enzyme is expressed primarily in extra-hepatic tissues (reviewed
in Zhu and Conney, 1998, Martucci and Fishman, 1993).
Specific information about the absorption, biotransformation and elimination of E2,
E1 and 17 α-oestradiol from meat and meat-product is not available. The effects of
cooking and other processing on the bioava ilability of such compounds is also
lacking. Based on the lipophilicity of oestradiol, there is no reason to assume that
such compounds will be poorly absorbed. Metabolic studies of orally administered
17ß-oestradiol indicate that as much as 20 percent of a 2 mg dose of micronized E2 is
absorbed, with a serum half-life in the range of 2 to 16 hours (Zimmermann et al.,
1998; Vree and Timmer, 1988: Ginsburg et al., 1998). In a 1998 study (Lippert et al.,
1998) of oestradiol metabolism in postmenopausal woman orally administered
oestradiol valeriate, 2 mg/day for 2 weeks, it was shown that along with the increased
serum concentrations of oestradiol, there was a proportionate increase in the level of
estrone, 2-hydroxyestrone and 16 α-hydroxyestrone. Thus exposure to exogenous

oestrogens leads to increased levels of the parent oestrogen compounds and their
metabolites."
156. Moreover, as regards the young children – which is most vulnerable segment of the
population - the 1999 opinion states (on pages 38-39) on this point the following:
"However, there are two potential problems with these values. First, as mentioned
previously ( Exposure Considerations Section) , determination of plasma
concentrations of oestradiol is subject to considerable variability, relative insensitivity
given its low levels in children, and in terference. A new, highly specific, more
sensitive assay for oestradiol indicated that blood oestradiol levels in girls may be as
much a 13 fold less and in boys 100 fold less than previous determinations using
RIAs indicate. Second, it does not appear that MCRs have ever been determined
directly in children. Rather, it appears as if MCR values from adult women were used
in the calculations of the PRs for child ren (Andersson and Sk akkebaek, 1999). This
approach may or may not be valid given the known differences in levels of SHBG
(higher in children, which would reduce clearance), and likely differences in uptake
and metabolism, etc. Given these issues, it is possible that the safety margin for
oestradiol exposure used by the FDA may be in error and that acceptable levels of
hormone residues in beef could be much lower. (Similar concerns apply to
progesterone and testosterone). The median level of excess exposure to oestradiol
from consuming meat from hormone-treated cattle is 6.8 ng/person/day (calculated
from Table A3, Annex, range 1 to 84 ng/ person/day). For comparative purposes,
assuming 100% absorption and a whole blood volume of 78ml/kg body weight, for a
40 kg child, based on the median value for excess oestrogen exposure, the blood
concentration calculates to be 2.2 pg/ml (1 to 26 pg/ml). If the blood oestrogen levels
are 100 fold lower than previously determined and the MCR too high by a factor of
10, the oestradiol daily production rate coul d be as low as 6 ng, and 1% of this would
be 60pg. Thus, the FDAs acceptable daily intake (102 ng/person/day, see above)
could exceed the daily production rate of o estradiol by 1,700 fold. While there is
some experimental evidence in support of the currently used blood levels of
oestradiol being 100 fold too high (Klein et al., 1994), the other assumptions used in
coming to this conclusion may be too conser vative. Thus, if absorption is reduced to
10% and the MCR for children is only 1/2 that of adults, the FDA acceptable daily
intake could still be 85 fold too high. Give n all of the uncertainties in these estimates,
it appears that the data are insufficient to form the basis of a sound risk assessment.
Clearly, this is an important area for additional research."
157. It has to be pointed out, however, that there is significant disagreement among scientists on
the bioavailability of oestradiol in the specific or al pathway considered here, where the level of
bioavailability cited in peer reviewed scientific literature ranges from 5% to 20%.
158. Moreover, similar finding are made for all the other five hormones. In addition, the 2002
opinion of the SCVPH further explained that the aim of one study ( study no 10 by Dr. Florence Le
GAc) was in particular to determine whether anabo lics and their metabolites compete with natural sex
hormones for binding to sex hormone binding globulin (SHBG / SBP). Theoretically, if this were
indeed the case, tissues would be deprived of natu ral hormones that affect the development of sex
hormone target organs during diverse stages of deve lopment. The data collected, shows a pattern of
binding to SHBP and competition with
3H-testosterone by ethynyl oestradiol, zearanolol alpha and
beta, 19-nortestosterone, trenbolone acetate and 17 β - trenbolone, and other natural androgens, not
much different from those reported by others. Th e synthetic compounds did not bind to SHBG in
blood plasma with high affinity. This study conclude d that the lack of significant binding of zeranol

and its metabolites to SHBG suggest that when pr esent in plasma their effect in brain and other
oestrogen target organs is not neutralized by their weak binding to this plasma-borne protein.
159. Furthermore, the 2002 opinion considered (on page 12, section 4.1.5) the results of one more
study (the study no 3) which found inter alia that:
"The obtained results indicate that the potency of 17 α-E2 is approximately 10% of
17β-E2. However, the potency of the li poidal esters exceeded the effect of 17 β-E2 in
the in vivo assay by approximately a factor of 10 (Paris et al., 2001). Furthermore,
lipoidal esters appear to have an even higher effect on the mammary gland in
experimental animals (Mills et al., 2001). The high potency of lipoidal esters after
oral applications might be explained by the fact that they reach systemic circulation
via the lymphatic system, as suggested by preliminary data. These findings warrant
further investigation, as a high bioavailability of biologically active lipoidal esters
and the possibility of accumulation (Zarner et al., 1985) might contribute
significantly to an undesirable exposure to oestrogenic substances. The impact of
residual protein bound non-extractable oestrogen remains to be elucidated. In
conclusion, it has to be stated that lipoidal esters of oestradiol add to the oestrogen
exposure, as mentioned above. While the oral bioavailability of these metabolites was
high in animal experiments, no information is available on the oral bioavailability in
humans following dietary exposure via contaminated meat products."
Q29. Is the relatively low dose used for anim al growth promotion purposes relevant for the
risk assessment at issue? In what manner has th is factor affected the result of the EC's risk
assessment?

160. It should be clarified first that it is genera lly recognised that for substances which have
genotoxic potential (as is the case with oestradiol 17 β) the low dose used in animal growth promotion
is not relevant, precisely because the possible genotoxi c risks may arise at any dose. This being said,
generally speaking, yes it is a relevant factor and the relative doses of hormones used for animal
growth promotion purposes and the level of residues th ey give rise to in the different animal tissues
has been taken into account in the European Communities' risk assessment. This is explained in detail
for each of the six hormones in particular in the 1999 opinion of the SCVPH, which discusses this
issue in several places. See, for example, table 2 on page 35 as regards oestradiol and the ensuing
discussion; table 5 on page 47 as regards testoster one and the ensuing discussion; table 7 on page 52
as regards progesterone and the ensuing discussion; table 8 on page 56 as regards trenbolone acetate
and the ensuing discussion; tables 10a and 10b on page 63 as regards zeranol and the ensuing
discussion; and pages 66-68 as regards melengestrol acetate. As regards melegenstrol acetate, the
2002 opinion also analysed the more recent data resulting from the studies nos 5 and 10 (see section
4.5.2, pages 17-18 of the 2002 opinion).
161. The 1999 opinion concluded on this point that:
"Endogenous hormones and their metabolites are present in measurable amounts in
various animal tissues including meat (Section 3.1. and 4.1.5., 4.2.4., 4.3.4., 4.4.4.,
4.5.4., 4.6.4.). The concentrations found, reflect different stages of the animals life
cycle as exemplified by the high levels of testosterone in tissues of male cattle (bulls)
or oestrogen and progesterone levels in ti ssues of young females (heifers) at a late
stage of pregnancy (240 days gestation). Heifers are slaughtered and enter the food
chain only exceptionally. It is therefore ques tionable whether levels in such animals
should be included in estimates of the upper range of hormonal levels in meat and
edible tissues. In contrast, for pharmaceutical products containing one or more of the

three natural hormones, it is estimated that the use of these growth promoting agents
will result in an additional excess daily intake of oestrogens in the range of 1 to
84 ng/person (17-β oestradiol + estrone), of prog esterone of 64 to 467 ng/person, and
of testosterone of 5 to 189 ng/person. As the levels of the synthetic compounds used
as growth promoting agents are virtually zero in untreated animals, any residual
amount in edible tissues must be regard ed as excess exposure (see section 3.1). No
validated data exists on the bioavailability of hormones and their metabolites after
oral ingestion with meat."
Q30. Regarding the potential risks to consum ers from the consumption of beef from cattle
treated with testosterone, progesterone, z eranol, TBA and MGA, could the European
Communities explain why, in the light of the available evidence, the European Communities has
determined that the relevant scientific evidence is insufficient to permit the assessment of risks
in a manner consistent with Article 5.1 and Annex A(4) of the SPS Agreement? With respect to
what elements of risks does the European Co mmunities believe that the available scientific
evidence is insufficient?

162. As explained in the Recital 7 of Directive 2003/74 EC:
"the SCVPH assessment [of 1999] is that, in spite of the individual toxicological and
epidemiological data available, which were taken into account, the current state of
knowledge does not make it possible to give a quantitative estimate of the risk to
consumers."
163. This assessment has not been reversed by the new scientific evidence available after 1999 and
later assessed by the SCVPH, as explained in the Recital 10 of the said Directive (see reply to
question 19).
164. Specific assessments have been conducted regarding the potential risks to consumers from the
consumption of beef from cattle treated with each of these five hormones for growth promotion
purposes. These assessments have identified that, for each hormone, the level of information missing
or contradictory was variable, at each individual step of the risk assessment.
165. The SCVPH has itself, in answering the questions of its mandate to perform the assessment of
risks at stake, identified clearly where the info rmation was felt insufficient. Question 1 (b) of
SCVPH's mandate was formulated as follows:
To what extent is the currently availabl e information (clinical and epidemiological
evidence included) sufficient to allow th e SCVPH to complete its assessment, in
particular for melengestrol acetate (MGA)?
166. In its reply, the SCVPH stated for all the six hormones the following:
ad 1 (b): With the exception of 17-ß oestradiol, the currently available information
for testosterone, progesterone and the sy nthetic hormones zeranol, trenbolone and
particularly MGA has been considered in adequate to complete an assessment. This
conclusion is based upon:
– incomplete data on the biotranfor mation pathways of these compounds and
the possible biological activity of the metabolites formed in bovine tissues as,
for example, testosterone might be aromatized to oestradiol.

– lack of data on the potential genotoxicity of these metabolites in
consideration of the current state of the art for genotoxicity testing as
indicated in the answer to question 2 (a).
– insufficient data on immunological and immunotoxical effects.
Based on experimental and epidemiological data, testosterone and progesterone have
been classified by IARC as Group 2 substances - probable/possible carcinogens in
humans. No epidemiological data are available for zeranol, trenbolone and MGA
(melengesterol acetate) although residues of hormonally active compounds in
(poultry) meat have been shown to exert an oestrogenic response in prepubertal
children in certain countries. Thus, no final conclusions can be drawn with respect
to the safety of at least five out of the six substances under consideration, until
the above described issues have been clarif ied. For oestradiol genotoxicity has
already been demonstrated explicitly. (emphasis added)
Q31. The Panel is aware that the FAO/WHO Codex Alimentarius Commission has adopted
standards with respect to five of the hormones at issue. For TBA and zeranol, the Codex has
established MRLs; for oestradiol, testosterone and progesterone, the Codex decided that no
MRLs were necessary. Please explain whether the European Communities believes that the
Codex standards have been developed without "s ufficient scientific evidence". With respect to
what elements of risks do you believe that the available scientific evidence is insufficient?

167. For the reasons explained with its reply to question no 22, the European Communities
considers that the standards adopted by the Codex Alimentarius Commission cannot achieve its
chosen level of protection. The Codex Alimentari us standards are based on the assessments of JECFA
mentioned above, which have suggested that it is unnecessary to set maximum residue limits (MRLs)
for oestradiol 17ß, testosterone and progesterone because they considered that residues resulting from
the use of these substances as a growth promoter in accordance with good animal husbandry practice
are unlikely to pose a hazard to human health and also because it is impossibl e to identify the real
origin of any residues in meat (i.e. wh ether it is from endogenous production or exogenous
administration), since the available detection methods are not capable of performing this kind of
analysis. But for zeranol and trenbolone acetate MRLs have been proposed by JECFA.
168. However, as already explained the above-menti oned JECFA reports found that oestradiol 17ß
"has genotoxic potential " and that the evidence for progesterone was interpreted " on balance" as not
having genotoxic potential. On the basis of these findings, JECFA did consider for the first time
 that
ADIs were necessary to be fixed but not MRLs , because of the endogenous production of these
natural hormones and the difficulties in applying the available detection methods in order to
determine the origin of any residues in meat. But the European Communities could not adopt the risk
management options proposed by JECFA, because the scientific risk assessment of the SCVPH did
not come to the same conclusions as those of JECFA (see the passages from the SCVPH opinion
listed above). One of the difficulties of the JECFA reports, for instance, is that JECFA's traditional
mandate does not allow it to examine all risk mana gement options but restricts it to either propose
MRLs or not. Therefore, after the examination of the full range of risk management options and
taking into account the potential advantages and disadvantages as well as consequences and feasibility
of risk management options (in particular that of control), the European Communities regulatory
authorities concluded that the prohibition of the u se of hormones for growth promotion within the
European Communities and the exclusion of import of meat derived from animals treated with
hormonal growth promoters was the most appropriate measure in order to protect its consumers from
the risks identified from excess intake of hormone residues and their metabolites and the potential for
abuse, inter alia, through non-observance of good husbandry practices. In other words, the European

Communities came to the conclusion that the JECF A's recommendations could not achieve the level
of health protection considered appropriate by the European Communities in its territory from
residues of these hormones under realistic conditions of use for animal growth promotion.
169. Moreover, the JECFA evaluations date of 1999 for the three natural hormones. It follows that
they did not take into account the most recent data generated by the 17 studies initiated by the
European Communities, upon which the three opinions of the SCVPH are also based. Consequently,
it appears that the Codex Alimentarius standards have indeed been adopted on previous evidence,
which by today's standards must be considered to be old. It is also generally accepted that evidence
which is old becomes scientifically and legally "ins ufficient" when more recent information and data
put into question its evidentiary value for the pur poses of a risk assessment. Moreover, to the extent
both JECFA and the relevant scientific committees of the European Communities considered partly
the same evidence, they arrived at different results.
170. Finally, the elements of risks for which th e JECFA assessment must be considered to be
"insufficient" are explained, inter alia, with the reply to Question No 30 above.
171. Moreover, the European Communities has carried over a number of years several inspection
mission in the USA and Canada in order to review and verify the respect of GVP and the extent of
residue monitoring and control by the defending memb ers. From these reports it is clear that there
were a number of serious irregularities in the resi due monitoring both in the USA and Canada (farm
level as well as the laboratory testing itself). For in stance, the results from the 2000 mission reports to
USA and Canada can be found at the following website of the European Commission:
• http://europa.eu.int/comm/food/fs/inspections/vi/reports/usa/index_en.html

 and
• http://europa.eu.int/comm/food/fs/inspections/vi/reports/canada/index_en.html.

172. The above were further considerations that have led the responsible risk management
authorities of the European Communities to conclude that under the realistic conditions of use, the
standards recommended by Codex Alimentarius are not capable of achieving the chosen high level of
protection by the European Communities from resi dues resulting from the consumption of meat from
animals to which these hormones have been administered for growth promotion purposes.
Q32. Can the European Communities provide th e Panel with a copy of the requests for
information made to the United States, Cana da and New Zealand in relation to scientific
studies?

173. The European Communities will provide the Pane l with the requested copies of these letters,
which date back to April 1998. In fact, they ha ve been archived in storage facilities outside the
headquarters of the European Commission and are th erefore difficult to retrieve. The European
Communities apologizes for the delay. It will submit the copies as soon as it has retrieved them from
the archives.
Q33. With respect to the written request ma de by the United States to the European
Communities under Article 5.8 of the SPS Agreement for an explanation on the consistency of
the EC's implementing measure, could the European Communities provide the Panel with a
copy of its written response of 19 May 2005 (US first written submission, para. 194)? Could the
EC explain why it replied to the US request fo r information pursuant to Article 5.8 of the SPS
Agreement only after having requested the establishment of a panel?

174. The European Communities provides its written responses to the United States request under
Article 5.8 of the SPS Agreement as Exhibit EC-7 (US) and Exhibit EC-5 (CAN)
175. Regarding the second part of the question, the United States, after not requesting anything for
one and a half year since the notification of th e new Directive to the WTO, or even having not
commented to any of the earlier European Commun ities' calls for scientific input in its risk
assessment, sent this request some time after the Eu ropean Communities requested consultations in
the present case: its request came on 13 December 2004, at the same time the consultations under
these proceedings were held (16 December), wh ich means more than one month after these
consultations were requested by the EC.
176. It is a fact, therefore, that the United States' request came after these proceedings have started
by the European Communities. The European Comm unities believes that the United States' request
was in fact stemmed by our request for consulta tions, when they realised that the European
Communities was serious about this issue and would certainly request the establishment of a Panel, as
they had already then no intention to suspend their sanctions against us.
177. Their request was, therefore, part of the prep aration of their defence strategy in this case,
namely that they are now claiming to still "consider" our measure to comply, despite the many
bilateral exchanges and requests for information which they had systematically denied before.
178. The exact date of the United States' re quest was 13 December 2004 and the European
Communities requested the establishment of this Panel in 13 January 2005. With the standard
administrative procedure to handle such request s, the European Communities took approximately
5 months to reply to the United States' request on 19 May 2005, a perfectly reasonable period of time,
which should not come as a surprise, in the light of the internal institutional consultations required
within the European Communities on issues of such a nature, and taking into account that Christmas
and Eastern breaks had intervened in the meantime.
179. It would certainly be absurd to assume that such a reply could have been ready right after the
Christmas break, before the request to establish the Panel, which had to follow naturally in the light of
the lack of willingness of the United States to cons ider interrupting their sanctions in the preceding
consultations.
180. Nevertheless, already at the time of its notification according to the SPS Agreement, the new
Directive, and the risk assessments requested by th e United States and which are provided for by the
opinions of the SCVPH, were all publicly availa ble through internet, as well as the scientific studies
on which these assessments were based.
181. Finally, the European Communities would note th at Canada never made any similar request
under Article 5.8 of the SPS Agreement.
Q34. With reference to the EC statement in paragraph 102 of the EC's oral presentation that
the European Communities "would have lifted the ban for these hormones if their use for
growth promotion purposes were proven to be safe for the public health and would have met its
chosen level of protection", please explain how the safety of the hormones could be proven?

182. The safety would have to be proven to the requis ite legal standard by a state-of-the-art risk
assessment taking into account the latest scientific info rmation and data available. More importantly,
the information and data gaps identified in th e recent risk assessments and in particular those
identified in the three opinions of the SCVPH would have to be clarified and properly addressed. This
would require a lot of new information to be brought forward on all the crucial questions identified in
the 1999 SCVPH opinion. It would in particular have to be shown that human exposure to residues of

hormonally-active substances contained in growth promoters used for meat production does not exert
or has not the potential of exerting the harmful biological effects identified in the 1999 SCVPH
opinion (e.g. cancer, on prepubertal children, etc.). This assessment would have to be performed on
the basis of real situations of use, if authori sed, so as to avoid the potential problems of misuse or
abuse in order to achieve the high level of protection of no additional risk from the residues in meat of
animals to which these hormones have been admi nistered for growth promotion purposes. For
instance, a group of independent USA scientists has recently published in a peer reviewed scientific
journal that:
"Zeranol (Ralgro) is a nonsteroidal agent with estrogenic activity that is used as a
growth promoter in the US beef and veal industry. Thus zeranol is not an
environmental contaminant per se. Rather, people are exposed to zeranol as a result of
introduction of the compound into food animal s by veterinary professionals on behalf
of beef industry farmers. We have shown that meat and serum from zeranol-
implanted cattle possess heat-stable mitogeni city for cultured breast cells, and that
both normal and cancerous human breast cells exhibit estrogenic responses to zeranol
(6-8). Evidence indicates potential tumorige nic mechanisms for estrogen, such as
direct genotoxic effects of estrogen metabolites and estrogen-induced expression of
genes encoding growth and transcription factors . However, despite the clear
importance of estrogens in the etiology of breast cancer, the mechanisms responsible
for estrogenstimulated carcinogenesis remain undefined."
42
183. The research for this study was supported by Oh io State University, the US National Cancer
Institute and the US Department of Defence Breast Cancer Research program. This paper is appended
as Exhibit EC-6 (US) and EC-8 (CAN). The Eu ropean Communities would expect that the USA
competent authorities will take the necessary steps to tr y and clarify the issues raised in this study and
that other cautious WTO members would be entitled to take into account this kind of evidence, and
many more which the European Communities will pr ovide with its rebuttal, when assessing the safety
of these substances.
[Questions 35 through 49 – Questions to US and Canada]

Q50. Could each party provide the Panel with a detailed account of the efforts it has made to
solve this dispute since the notification by the European Communities of its implementing
measure in 2003?

184. The European Communities undertook repeated e fforts with the United States and Canada
with the aim of agreeing on a procedure through which the existing disagreement over compliance
could be resolved in accordance w ith the DSU, i.e. multilaterally. To this effect, discussions were
held at the technical level from fall 2003 on the following possibilities: (i) a compliance review under
Article 21.5 of the DSU, possibly with agreed terms of reference, or (ii) an agreed arbitration under
Article 25 of the DSU, also with agreed terms of reference. The European Communities also made
clear that, in the absence of the United States' and Canada's action according to options (i) or (ii), it
would have no other choice than to launch an inde pendent dispute against the continuation of the
United States' and Canadian suspension of obligati ons. These discussions continued at the technical
level into the beginning of the year 2004 and covere d specific aspects of the terms of reference that
could be agreed, in particular for an arbitration under Article 25 of the DSU.

42 Suling Liu, and Young C. Lin: Transformation of MCF-10A Human Breast Epithelial Cells by
Zeranol and Estradiol-1 7ß, The Breast Journal, Volume 10, Number 6, 2004 514-521 ( 2004). Exhibit EC-8
(US), 6 (CAN).

185. In January and February 2004, the issue of an agreed procedure for the review of the new
Hormones Directive's WTO-compliance was also on th e agenda of several meetings and phone calls
which Commissioner Pascal Lamy had with Trade Re presentative Robert Zoellick and with Minister
Jim Peterson. The last contact at ministerial level was a discussion between Commissioner Pascal
Lamy and Ambassador Robert Zoellick in October 2004 shortly after the adoption by Congress of the
American Jobs Creation Act of 2004. Mr. Lamy conveyed the European Communities' intention to
initiate a procedure under Article 21.5 of the DSU against the WTO-inconsistent implementation in
US – FSC . He also indicated the intention to propose to the Council of the European Union that the
European Communities' countermeasu res against the United States in FSC be suspended during the
Article 21.5 review. He added that the European Communities expected the United States to proceed
in the same manner as regards its suspension of obligations in EC – Hormones . Unfortunately, all
these efforts have not borne fruit. In the absen ce of a positive reply, the European Communities
decided to initiate the present dispute against th e United States' and Canada's ongoing suspension of
obligations. During the consultations in this dis pute, the European Communities reiterated to the
United States and Canada its offer not to pursue th is case if the United States and Canada suspended
their sanctions and initiated Article 21.5 proceedings.
Q51. Having regard to the first claim of the European Communities, in a post-retaliation
phase, if a suspension of concessions is consiste nt with Article 22.8, can it nevertheless be
inconsistent with Article 23 of the DSU? Under what circumstances? Please elaborate.

186. Yes, it can be inconsistent with Article 23 wh ile being consistent with Article 22.8. The
difference lies in who determines whether the measu re has been "removed" within the meaning of
Article 22.8. A Member who unilaterally determin es that the inconsistency of the measure has not
been removed and continues to apply sanctions on that b asis, is in violation of Article 23, even if later
it is multilaterally established that the measure had ind eed not been removed and, therefore, that there
is no violation of Article 22.8. The European Communities refers also to its answer to Question 13.
Q52. In the US – FSC case, the European Communities suspended the application of its
suspension of concessions and then initiated an Article 21.5 procedure because it considered
that the US implementing legislation was inconsistent, inter alia , with the SCM Agreement.
Please give your views on whether it would also be possible to request the establishment of an
Article 21.5 panel while continuing to apply th e suspension of concessions pending the outcome
of the Article 21.5 procedure?

187. The European Communities understands this ques tion to inquire whether the suspension of
concessions may continue while an Article 21.5 pro cedure is ongoing. In the European Communities'
view there is no need for the Panel to give a general response to this question in the present
proceeding. In the present case, the United States and Canada have violated Article 23 read together
with Article 21.5 because they failed to initiate a co mpliance review for nearly one and a half years
when this panel was established while continuing to apply sanctions. Accordingly, if the Panel agrees
with this proposition, the United States and Canada will have to end their sanctions once the DSB has
adopted the recommendations and rulings in this case. They cannot then initiate a compliance review
and maintain the sanctions because this would defy th e logic of the finding of a violation that consists
of the application of sanctions and the non-initia tion of the compliance review over a protracted
period of time. Under these circumstances, there is no need to decide on the principle of whether the
sanctions must be lifted (suspended) in a different case, where the original complainant initiates an
Article 21.5 procedure in a timely fashion.
Q53. Are the parties of the view that, in the absence of a challenge by the implementing party
against the continued suspension of concessions, su ch suspension can continue for an indefinite
period of time, even though they are supposed to be only temporary. If not, what provision of

the DSU can serve as a legal basis for preventing the suspension of concessions for an indefinite
period of time?

188. In the European Communities' view, where an implementing measure has been adopted,
Members are prevented from suspending concessions for an indefinite period of time through
Article 23 in conjunction with Article 22.8. Th ese provisions read together require Members to
challenge another Member's implementing measure if they consider it to be WTO inconsistent and
thus prohibits them to simply continue to apply sanctions.
189. By contrast, while it is true that the suspen sion of concessions, according to Article 22.8 is
only temporary, a Member would not be prevente d from continuing to suspend concessions for an
indefinite period of time in the absence of any implementing measure, i.e. where another Member
would simply refuse to remove the measure that h as been found to be inconsistent with a covered
agreement.
Q54. Could the parties provide the Panel with their understanding of the meaning of the term
"measure" in Article 19.1 of the DSU and of the term "measures taken to comply with the
recommendations and rulings [of the DSB]" in Arti cle 21.5 of the DSU? More particularly, do
the parties consider that a measure taking, e.g., the form of a ban remains the same measure,
irrespective of the change in supporting legislation, as long as it is a ban? If not, what makes a
"measure taken to comply" different from th e measure which had to be brought into
conformity?

190. The "measure" within the meaning of Article 19. 1 of the DSU is the measure that has been
found to be inconsistent with a covered agreem ent. The findings identify the reasons for the
inconsistency. The recommendation to bring the measu re into conformity, in turn, must be read in
light of these findings.
191. The "measure taken to comply" within the meaning of Article 21.5 of the DSU, is the measure
that has been (or should be) taken to bring about compliance with the above recommendation.
43
Compliance depends on the reasons for inconsistency as they have been identified in the findings.
192. How to distinguish the two measures is a qu estion that can be asked on two levels: on a
formal/procedural level (has a Member adopted a ne w measure in order to bring about compliance?)
and on a substantive level (has the Member actua lly achieved compliance?). The assessment on the
latter level is clearly the task of a compliance panel.
193. In the present case, a new measure has been adopted to bring about compliance (a new
Directive adopted by the Council and the European Parliament). Formally, therefore, there is a
measure distinct from the original measure. Whethe r that measure is distinct also on a level of
substance is a question of what compliance is about in this case. The reasons of inconsistency of the
old Hormones legislation have been identified by the Pa nel and Appellate Body in their respective
findings. They all relate to the risk assessment underlying the import prohibition. That risk
assessment was essentially found not to sufficiently warrant a measure consisting in an import
prohibition. Thus, it was not an import prohibition as such, that was found to be inconsistent with the
SPS Agreement , but the particular import prohibition as based on the (deficient) risk assessment in
question.
194. The new measure addresses these reasons for incons istency in that it is based on a new risk
assessment. The new risk assessment fully warrants a (definitive) import prohibition on one hormonal

43 See also Appellate Body Report, Canada – Aircraft (21.5 – Brazil), at para. 36.

substance in question and yields enough available pertinent information to support a provisional
import prohibition on the other five substances. Therefore, also on the level of substance, the measure
taken to comply is a different one from the original measure found to be inconsistent irrespective of
the fact that, in form, it remains an import prohibition.
44
Q55. When does the legal effect of the DSB au thorization lapse and by what procedures?
Where parties disagree on the consistency of a noti fied implementing measure effected after the
DSU retaliation authorization, does the DSU auth orization lapse at the time when (i) the DSB
makes a decision of compliance with respect to the implementing measure, or (ii) the
implementing measure is in actual complia nce regardless of whether the DSB has made a
determination of compliance or not, or (iii) the Member concerned notifies its implementing
measure to the DSB and declares its compliance, or (iv) the DSB makes a specific determination
to terminate its previous retaliation authorization?

195. The European Communities expresses no view as regards whether and when the DSB
authorization "lapses" in the sense of "ceases to ex ist". Where the European Communities has a clear
view is the question of until when the suspension of obligations may be "applied".
196. As regards the possible answers which the Pane l is presenting in this question, one has to
distinguish: The answer is (ii) under Article 22.8 of the DSU, i.e. when the implementing measure is
in actual compliance regardless of whether the DSB has made a determination of compliance or not.
The reason is that Article 22.8 contains an oblig ation to cease the suspension of concessions if the
measure has been removed. That obligation directly applies to the Member imposing retaliation. The
DSB authorization cannot overrule this obligation. To the contrary, its legal effects are dependent on
it. That is why a Member is no longer entitled to su spend obligations if the conditions of Article 22.8
are fulfilled.
197. Under Article 23 in conjunction with Article 22.8, however, a Member is not entitled to
continue the suspension of obligations if this is based on a unilateral determination and accompanied
by the failure to have recourse to the rules and procedures of the DSU.
Q56. Article 21.5 of the DSU provides that where there is a " disagreement as to the existence
or consistency with a covered agreement of measu res taken to comply with ... such dispute shall
be decided through recourse to these dispute settlement procedures." Since Article 21.5
provides that "such dispute shall be decided"
45 through recourse to [the DSU]", would the
parties consider that either of them has an obligation to refer the matter to the DSB under
Article 21.5? If yes, why?

198. In the European Communities' view the "shall" refe rs to the obligation to resort to the dispute
settlement procedures under the DSU, and more particularly to the one under Article 21.5, if and when
it is envisaged to seek redress because of a disagr eement on compliance. By contrast, it does not
imply an obligation to initiate such a dispute in the absence of an y desire to take action based on a

44 See also the case Japan – Apples where the implementing measure maintained elements of the
original measure. The Panel, in the case, found: "In its implementation process, Japan has made some changes
to the original measure [footnote omitted] and has produ ced new studies to support its view that (a) mature,
symptomless apples can be "latently" infected and (b) infected apples c ould, once on the Japanese territory,
contaminate host plants. On the basis of these studies, Japan has maintained many elements of the original
measure in the measure taken to comply . For this reason, we consider th at all the elements of the measure
currently in place should be treated as the "measures ta ken to comply", even though many of those elements
were already found in the orig inal measure [footnote omitted], See Panel report Japan – Apples (21.5) , at
para. 8.32.
45 Emphasis added by the Panel.

belief that there is non compliance. Article 21.5 ma kes clear ("shall be decided") that Members are
not entitled to decide such disagreements through ot her means, as the United States and Canada have
done by unilaterally deciding that there is no complia nce and thus continuing their sanctions. This is
confirmed by Article 23.
Q57. How would you distinguish between expressing "disagreement" over the WTO
compatibility of a measure taken to comply wi th recommendations and rulings adopted by the
DSB for the purpose of deciding whether or no t to start an Article 21.5 procedure and a
unilateral "determination" of WTO compatibility of such a measure?

199. The "disagreement" is less than a "determina tion." If a Member has made a determination
within the meaning of Article 23.2(a) that there is no compliance, this will imply that there exists also
a disagreement within the meaning of Article 21.5 (unless, of course, the original respondent agrees
that there is no compliance). On the other hand, such a disagreement may exist without a Member
having yet made a determination. The difference is that a determination is linked to the action of
seeking redress implying that a Member takes steps to address what it perceives to be a case of non
compliance. A disagreement, by contrast, does not (necessarily) imply taking any steps.
200. To illustrate the difference: If the defending parties had suspended the application of
retaliatory measures, but had otherwise reacted in the same way as they have, i.e. making statements
to the effect that they fail to see how the new m easure could be compliant etc., there would be a
disagreement, but no determination.
Q58. In a situation where an Article 21.5 panel, requested to examine the compatibility of an
implementing measure, finds that only partia l compliance has been achieved, what is the
procedure available to the original complainant: (a ) Can it continue to apply the suspension of
concessions initially authorized by the DSB?; (b) Does it need to request a new authorization?(c)
Can the implementing party object to the leve l of suspension and request an Article 22.6
arbitration to determine a new level of suspension of concessions?

201. If a 21.5 panel is called upon to rule on nullificati on and impairment it can rule that the level
is less following partial implementation. Furtherm ore, the European Communities notes that in the
case US – FSC (second Article 21.5) (report not adopted yet) the panel was confronted with partial
compliance and opined that
Although the phased reduction in amount of subsidy available in 2005 and 2006 may
be relevant in another type of proceeding, such as an arbitration under Article 22.6 of
the DSU or Article 4.10 and 4.11 of the SCM Agreement, the fact that, in 2005 and
2006, the percentage of subsidy available is less than the entire amount that was
available under the ETI Act before 2005 is not material to our inquiry under the
Article 21.5 DSU proceeding. 46
202. Thus, that panel seems to imply that an arb itration procedure under Article 22.6 would be
possible. It is unclear, whether the Panel was sugg esting that a new request for an authorization is
required and whether there could be a suspen sion of concessions pending the outcome of the
arbitration procedure. The European Communiti es is still considering the correctness of this
statement and its implications, which may be subject to review by the Appellate Body.

46 Panel Report, US – FSC (second Article 21.5), not yet adopted, at para. 7.60, Footnote 78.

Q59. Is Article 23 of the DSU applicable to a suspension of concessions under a previous
authorization of the DSB and in the absence of a new DSB decision of termination of the
previous authorization?

203. Yes, Article 23 is applicable to such a situa tion, since it applies always when Members are
"seeking redress". Indeed, it is difficult to see why it would not be applicable, i.e. which condition of
its application would be lacking. The defending par ties pretend that the element "seeking redress of a
violation" is missing, because they would alr eady have "sought and obtained" redress under the
previous authorization.
47 In the European Communities' view this statement not only relies on a
different meaning of the word "to seek" – one which does not make sense in the context of
Article 23
48 – but it also lacks logic as the defending parties themselves admit that suspending
concessions is a form of seeking redress.49
204. Also, the European Communities would reiterate that both legally and practically speaking
there is, under the present rules, no such thing as a "n ew DSB decision of termination of the previous
authorization".
Q60. Having regard to the US reference to the DSU negotiations in footnote 202 of its first
written submission, could the parties indicate wh ich proposals have been made in that context
that would represent amendments to the current text of Articles 21.5, 22.8, 23.1 and 23.2(a) of
the DSU?

205. As the European Communities has pointed out, this Panel is asked to interpret and clarify, in
accordance with its mandate under the DSU, the exis ting provisions of that understanding. The fact
that related questions are under discussions in the negotiations on improvements and clarifications of
the DSU and whether or not there is consensus among Members on how the rules should be improved
in that regard is therefore without direct relevance to this dispute. The Panel must apply the existing
procedural rules of the DSU to this case, and the rights and obligations of Members under the existing
rules cannot be altered by whatever Members ma y be discussing in the special session of the DSB as
regards future DSU rules – whether improved or merely clarified.
206. Given that the Panel has stressed "amendments " in its question, the European Communities
would once more point out that what does not exis t in the current DSU rules is an explicit and
streamlined mechanism for a formal removal of a previously granted DSB authorization to suspend
obligations. Such a mechanism h as indeed been the subject of the negotiations on a review of the
DSU. The present absence of such a formal mechanism, however, in no way implies nor can the
European Communities accept (contrary to the United States' stated belief at the first substantive
meeting), that the current DSU rules contain no rules that regulate until what point a Member may
suspend obligations pursuant to a once obtained DSB authorization. Also, there is no gap in the
present rules since Article 21.5 of the DSU can ser ve to resolve a disagreement over compliance,
which presupposes the complainant's initiative. Furt her, if like in the present case, the original
complainant refuses to initiate a compliance review, the Member facing the suspension of obligations
can challenge the legality of these sanctions in an or dinary panel procedure, as it has been done in the

48 There are the meanings of "seek" which have been identified by previous panels ( US – Certain EC
Products, at para 6.22) and which are "to resort to…to make an attempt, to try" (meanings which also the US
identified, see US First Written Submission, at para. 172); and there is the other meaning which is "to ask for, to
demand, to request" which is the one replied upon in the statement "sought and obtained" and authorization.
49 Note also, and as pointed out in the EC First Written Submission, the Panel in US – Certain EC
Products also found that suspension concessi ons (in order to seek redress of a violation) necessarily implies a
determination, see Panel Report, US – Certain EC Products, at para. 6.100; see also EC First Written
Submission, at para. 59.

present case. This is a long and complex recourse, but a possible one and the Panel may not refuse a
ruling on this matter, lest a gap should be created in the current DSU and rights and obligations of
Members diminished.
207. Ever since the DSU negotiations have started, the question of adding a more streamlined
mechanism to bring sanctions to an end, notably by formally removing a previously granted DSB
authorization to suspend obligations, has been on the table. Notably, in November 1999, several
Members
50 co-sponsored a proposed amendment, the so- called Suzuki Text, which provided for such
a specific remedy (WT/MIN(99)/8). The same pr oposed amendment was also contained in an
amendment proposal of October 2001. 51 The Chairman's text of 2003 (which is 17 pages long, see
TN/DS/9, and to this date the most recent draft te xt of proposed amendments authored by a Chairman
of the DSB special session), maintained this remedy. It provides in essence that it is for the original
complainant to challenge the WTO compatibility of the implementing measure, and if it does not do
so within a specified time-period, the DSB form ally withdraws the authorization by negative
consensus. The start of that deadline is tr iggered through the implementing Member's qualified
notification of its measure taken to comply. If a compliance review takes place and results in no
findings of inconsistency, the DSB also withdraws the authorization to suspend obligations. If there
is no full implementation, a new arbitration on th e level of nullification or impairment may be
requested and the DSB would subsequently modify the previous authorization accordingly.
208. It is worth recalling that the Chairman's text of May 2003 included only a select number of
proposed elements of possible improvements and clarif ications of the DSU. The Chairman's criterion
for that selection was the degree of consen sus among WTO Members in those negotiations. 52 Thus,
while the Chairman's text was based on proposals made by individual or groups of Members, it
omitted a large number of such proposals in view of the insufficient support which these had attracted
in the course of the negotiations.
53 This is also evidenced in the Chairman's report of 6 June 2003 to
the Trade Negotiations Committee: "A number of ot her proposals by Members could not be included
in the Chair's proposal in the absence of a sufficiently high level of support, including, inter alia ,
…" 54 In some cases, the Chairman's text containe d proposed amendments in square brackets to
indicate a lower degree of consensus on the issue in question. It is worth noting that the proposed
Article 22.9 of the DSU was part of the Chairman's text without square brackets.
209. In May 2004, Canada, who had been among the co-sponsors of the Suzuki Text, changed
direction and, together with Argentina, Brazil, India, New Zealand and Norway, most of which are
also third parties in this dispute, made a proposal under which it is solely for the original respondent
to launch the compliance review in the post-re taliation phase (JOB(04)/52). The proposal specifies
that the original complainant can submit new claims of violation after the original respondent has
requested the establishment of the compliance panel and that the panel's terms of reference cover
these as well. Listening to Canada at the first substantive meeting, the European Communities had the
impression that Canada confuses the current rules w ith the procedures it has proposed to create. The
joint proposal of Argentina, Brazil, Canada, I ndia, New Zealand and Norway was substantially
discussed in the special session of the DSB, where [confidential] th at, despite the proposed initiation

50 Canada, Costa Rica, Czech Republic, Ecuador, th e European Communities and its member States,
Hungary, Japan, Korea, New Zealand, Norway, Peru, Slovenia, Switzerland, Thailand and Venezuela.
51 By Bolivia, Canada, Chile, Colombia, Costa Rica, Ecuador, Japan, Korea, New Zealand, Norway,
Peru, Switzerland, Uruguay and Venezuela.
52 See TN/DS/M/12, para. 1: "The Chairman said that the draft text reflected proposals on which there
was a high level of convergence among Members."
53 The totality of the draft text proposals submitted in those negotiations has been collected in a
Compilation, see JOB(03)/10/Rev.3 and JOB(03)/10/Rev.4 (the version of spring 2003 and equally the further
revision of October 2004 are each 102 pages long).
54 TN/DS/9, page 1, para. 6.

of the compliance review by the original responde nt, the respondent would not bear the burden of
proof for its WTO compliance, given that establishe d WTO jurisprudence makes clear that the party
which asserts the affirmative of a claim or defence, not the negative thereof, bears the burden of proof.
210. Based on the discussion that had taken place in the special session of the DSB, the European
Communities and Japan submitted an alternative te xt in March 2005 (JOB(05)/47). This proposal
maintained (and further refined) the approach cont ained in the above-mentioned Chairman's text of
May 2003 and thus also preserves the basic structure of WTO dispute settlement, namely that it is for
complainants to initiate WTO disputes and to re quest the establishment of panels pursuant to
Article 21.5 in conjunction with Article 6 of the DSU. That proposal was well received by a large
number of Members, but some technical work remains and also the gap between the two recent texts
in question.
211. Finally, the European Communities would like to point to an interesting proposal on dispute
settlement which Canada has subm itted in the negotiations on rules.
55 In that proposal, Canada
proposes that an implementation measure would be considered WTO-compliant after a declaration of
compliance to the DSB by the implementing Member and without the initiation of Article 21.5
proceedings within a prescribed period of time that is sufficient for the complaining Member to assess
the adequacy of the compliance action (e.g. 60 days). Despite the different context (anti-dumping and
countervailing duty enforcement action), the contrast between the position expressed in that proposal
and Canada's position in the present dispute is quite striking.
Q61. How does the principle of good faith affect the allocation of burden of proof in these two
disputes? What kind of presumption should be made by the Panel if/when applying this
principle? Does the application of this principle under the circumstances of the present disputes
lead to the conclusion that the EC's impl ementing measure shall not be presumed WTO-
inconsistent? Or, should the conclusion be that the US and Canadian measures of suspension of
obligations shall not be presumed to be inconsistent with the DSU? Please elaborate on why one
specific conclusion is preferable than the other in your view.

212. It seems important to recall what the principle of good faith is about: To paraphrase the
Appellate Body, the principle of good faith controls the exercise of rights [and the fulfilment of
obligations]
56 by states. 57 WTO Members are required to exercise their rights and comply with their
obligations in good faith. 58 The principle of good faith has a number of "applications" (Appellate
Body, US – Shrimp ), which prohibit or prescribe a certain conduct on States (example of US –
Shrimp: doctrine of abus de droit ). Thus, the principle of good faith is about certain obligations of
conduct that WTO Members have as contracting parties of the WTO agreements.59
213. The debate in the present case is about the presumption of good faith, which can be seen to be
derived from the principle of good faith. Thus, it is not the obligation to act in good faith, but the
presumption that that obligation has not been breach ed, which is of relevance in this case. That
presumption, in turn, is but one aspect of the more general presumption that Members are acting in a
manner consistent with their obligations under the WTO agreements.

55 TN/RL/GEN/37 and [confidential].
56 The Appellate Body, in the specific context of the case US – Shrimp, was discussing a right, namely
the right to rely on the exception of Article XX of the GATT. Other case law shows clearly that the principle
applies equally to the fulfilment of obligations, see for example US – FSC , Report of the Appellate Body, at
para. 66.
57 Appellate Body Report, US – Shrimp, at para. 158.
58 For the DSU this is explicitly stated in Article 3.10.
59 See also Article 26 of the Vienna Convention.

214. The presumption that Members are acting in a ma nner consistent with their obligations under
the WTO agreements is the very basis of the di spute settlement system (as it is essentially for any
dispute settlement or court system that is there to solve disputes about contractual obligations).
Disputes are brought to establish that a Member h as acted in a manner inconsistent with its WTO
obligations. In bringing the case and making the assertion that there is a violation the presumption of
compliance is rebutted. It is then, in turn, for the defending party to rebut the assertion. The burden
of proof rules flow naturally from this logic.
215. On the basis of that logic the European Co mmunities has brought the present cases in order to
have established that the United States and Canada are acting in a manner inconsistent with their
obligations (under the DSU). In accordance w ith the burden of proof rules the European
Communities has made a prima facie case that there is a violation and the defending parties have
come back with arguments to rebut that assertion. Had the European Communities (or anybody else)
not brought any case against the defending parties, they would have had to be presumed to be acting
consistently with their WTO obligations. Neither the European Communities nor anybody else would
have the right to claim otherwise, by, for example applying retaliation (Article 23).
60
216. The same logic should apply, in turn, to the European Communities' implementing measure in
the Hormones dispute. In order to rebut the presumption that the European Communities, in adopting
that measure, has acted in a manner consistent with its WTO obligations, the defending parties have to
bring a case. The normal burden of proof rules would apply. The fact that they have precisely not
brought such a case is (1) the reason why the Eur opean Communities is claiming that there is a
violation of Article 23.1, 23.2(a) in conjuncti on with 21.5 and (2) the reason why the European
Communities relies on the presumption of compliance in the context of its claim under Article 23 in
conjunction with Article 22.8.
Q62. Do you agree with the view that (i) if an original complaining party initiates an
Article 21.5 dispute challenging the consistency of an implementing measure, that party shall
bear the burden to prove that the implementi ng measure is WTO-inconsistent during the
compliance procedure, and that (ii) if an original defending party initiates an Article 21.5
dispute claiming the WTO-consistency of its meas ure, that original defending party shall bear
the burden of establishing the consistency of it s implementing measure as a complaining party
to the Article 21.5 dispute? Please elaborate on your response.

217. The question illustrates well the systemic incohe rencies that arise in bringing a case against
oneself in order to establish that there is compliance.
218. Scenario (i) is the standard scenario, to whic h the burden of proof rules apply without any
problem. Indeed, the (original) complaining pa rties would have the burden of proving that the
implementing measure is WTO-inconsistent.
219. Scenario (ii), on the other hand, is no standard scenario. The following remarks apply to this
case: Burden of proof rules do not depend on a particul ar procedural constellation, i.e. on who is the
complaining and who is the defending pa rty, but on who asserts the affirmative of a particular claim
or defence.
 61 Therefore, even in the role of the "defe nding party" in a 21.5 procedure initiated by the
implementing Member, it is the original complaini ng party that would assert – and therefore have to
prove – that there is WTO inconsistency. This much seems implied in the above question.
220. The difficulty lies in the assumption that, wh en initiating a case itself, the implementing
Member would have to assert – and therefore prove – that there is WTO consistency. The above

60 See also EC reply to Question 4.
61 Appellate Body Report, US – Wool Shirts and Blouses, p. 16

burden of proof rules do not envisage such a case as they apply either to violation claims or to
defences (i.e. claims of inconsistency or rebuttals to such claims), but not to a free-standing assertion
that there is WTO consistency. The assertion that "t here is WTO-consistency" is not a claim in the
sense of DSU and not a basis for a dispute under Article 1.1 of the DSU, Article 11.1 of the SPS
Agreement and Article XXIII of the GATT. Indeed, to the extent such an assertion would be about
establishing that there is no violation of a WTO provision, a Member would have to assert, not the
affirmative, but the negative of a claim (e.g. "no violation of Article 5.1"). This, however, is
impossible, both in scope and substance: First in scope, because it would effectively mean going
through every single provision of the WTO agreements in order to rule out any possible violation
(compliance under Article 21.5, afte r all, means "consistency with a (i.e. any
) covered agreement.").
Second, in substance, because it would require antic ipating what the possible problem could be under
any particular provision.
221. The very case of the Hormones Directive demonstrates this impossibility. Not only is it
impossible for the European Communities to rule out any possible violation there might be under the
covered agreements, but it is even impossible to do so with regard to the specific violations that had
been found by the DSB to exist under the old measure. Take the case of Article 5.1 of the SPS
Agreement. The Appellate Body had found that the risk assessment presented by the European
Communities at the time did not sufficiently warrant the prohibition laid down in the legislation.
While it might still be conceivable to address the sp ecific reasons why this had been the case at the
time (e.g. specificity of the evidence relating to hormones generally but not to hormone residues in
meat consumed by humans and arising from use for growth promotion purposes), it is virtually
excluded to address all other possible reasons why the new risk assessment may not sufficiently
warrant the new measure. Indeed, Canada and the United States might find a multitude of other
reasons why the risk assessment might be flawed accord ing to their belief. Thus, they might contest
the methodology used, disagree with the results obtained, dismiss the quality of the scientists
employed, reject the conclusions drawn etc. Such potential criticisms cannot be anticipated. What's
more, putting the burden of anticipating them on th e implementing Member would effectively lift the
burden of the original complaining parties to assert and demonstrate inconsistency.
222. One could think of solving such problems by "t ailoring" the burden of proving consistency to
something "feasible" (no new violations? only tho se identified by rulings and recommendations? only
those reasons identified by Appellate Body?). Ho wever, assuming for the moment that this were
legally conceivable, which it is not, the burden of proof issue would then become even more of a
moving target (opening up a battlefield of arguments of what is new/old) creating further procedural
complexities.
223. These issues demonstrate well that it is against th e very nature of the dispute settlement and
its rules of burden of proof to assume that there exists a burden of proving consistency if such a
burden is supposed to consist in anything else but the mere presentation of the implementing measure.
Q63. Would the parties consider that the principle rebus sic stantibus , could apply to a
decision of the DSB (see, inter alia, para. 26 of Canada's oral presentation regarding the legal
status of DSB decisions)? In its oral comments on Canada's oral presentation, the EC stated
that there is no hierarchy in customary international law, the principle of good faith in this case,
and a treaty language, the DSB authorization in the current dispute. Could the parties provide
evidence that the EC statement is or is not supported by international jurisprudence?

224. This question requires first of all a few gene ral remarks about the relationship between WTO
agreements and customary international law (or other sources of international law).

225. As stated at the substantive meeting, a concep t of hierarchy of norms comparable to what
exists in domestic law does not exist in public international law. As the International Law
Commission pointed out most recently, such a "con cept [of hierarchy] […] was not present on the
international legal plane and should not be superimposed."
62
226. There are, however, different sources of public international law and these are enumerated in
Article 38 of the ICJ Statute. As explained by Brownlie
They are not stated to represent a hierarchy, but the draftsmen intended to give an
order […]. 63
227. The reason for applying this order is essentially one of specificity, treaty law normally being
of a more specific nature than customary law and general principles. 64 However, as Lauterpacht,
points out
[…] the order of the sources of internationa l law as thus indicated cannot be applied
in a mechanical way. Nor does it fu lly express their relative importance.
Undoubtedly, the rights and duties of States must be determined in the first instance
by reference to applicable treaties. Yet, while it is true that international customary
law applies only in the absence of available provisions of treaties, and that ‘general
principles of law' are merely a residuary source of law in cases in which there is no
applicable treaty or custom, treaties, in tu rn, must be interpreted in the light of
customary international law [footnote omitted] - just, as the latter, as well as treaties,
must be interpreted against the background of general principles of law. When the
meaning of a treaty is not clear, it must be assumed that the parties intended it to be in
conformity with general customary, interna tional law – and it is then that customary
international law becomes relevant and d ecisive, notwithstanding any hierarchical
order establishing the priority of a treaty.
65
228. The panel in the case Korea – Government Procurement accurately applied these concepts to
the issue of the relationship between the WTO agr eements and customary international law, when
stating that
Customary international law applies genera lly to the economic relations between the
WTO Members. Such international law a pplies to the extent that the WTO treaty
agreements do not "contract out" from it. To put it another way, to the extent there is

62 2002 ILC Report, at p. 506. See also, for example, Knut Ipsen, Völkerrecht, 3. Auflage, at p.222,
para. 1 : "Die Lösung [von] Konfliktfälle[n] [zwische n Normen die verschiedenen Rechtsquellen angehören]
bereitet Schwierigkeiten, weil dem Völkerrecht eine dem innerstaatlichen Recht vergleichbare
Normenhierarchie fremd ist und es an allgemeinen, auf alle Konfliktfälle anwendbaren Kollisionsregeln fehlt."
(The resolution of conflicts between norms of different s ources is difficult as public international law is lacking
a hierarchy of norms comparable to domestic law and as there are no general rules of conflict that would apply
to all cases of conflict.)
63 Ian Brownlie – Principles of Public International Law, Fifth Edition 1998, at p. 3.
64 As Lauterpacht explains : "The rights and duties of States are determined, in th e first instance, by
their agreement as expressed in treaties – just as in the case of individuals th eir rights are specifically
determined by any contract which is binding upon them. When a controversy arises between two or more
States with regard to a matter regulated by a treaty, it is natural that the parties should invoke, and the
adjudicating agency should apply, in th e first instance, the provisions of the treaty in question [...] Within these
limits – which may be substantial [footnote omitted] – a treaty overrides international customary law and even
general principles of law; […], see Hersch Lauterpacht , International Law – Collected Papers edited by E.
Lauterpacht, Edition 1970, at p. 87.
65 Ibid. (previous footnote) at p. 88.

no conflict or inconsistency, or an e xpression in a covered WTO agreement that
implies differently, we are of the view that the customary rules of international law
apply to the WTO treaties and to the process of treaty formation under the WTO.
66
229. Against this background, the following comments a pply to the two issues raised in the Panel's
question:
230. As regards the principle clausula rebus sic stantibus the European Communities, in its First
Written Submission has already referred to the fact that the basis for the DSB authorization changes
fundamentally once a Member has properly implemented. 67 This fact, however, does not lead to a
direct application of the principle of clausula rebus sic stantibus . Indeed, there is no need for that,
given that the obligation to cease the application of the suspension of concessions can be directly
inferred from Article 22.8.
231. As regards the issue of a possible conflict between the principle of good faith and a DSB
authorization, a few clarifications seem necessary. First, for the sake of accuracy it should be pointed
out that the principle of good faith is a general prin ciple of international law and not, as suggested in
the question, a rule under customary international law.68
232. Second, we explained in the reply to Question 61 the relationship between the principle of
good faith and a presumption of good faith (or more broadly, of compliance).
233. Third, assuming the question aims at the issue of a possible conflict between the presumption
of good faith (or more generally of compliance) and that DSB authorization. In that regard the
European Communities takes the view that no such conflict exists. The presumption that a Member is
acting consistently with its WTO obligations is the ve ry basis of the dispute settlement system. It is
the reason why disputes are about inconsistency and not about consistency, why complaining parties
assert violations and not the absence of a violation. That presumption is therefore also inherent to
Article 22.8 and it is that provision which governs a Member's right to suspend obligations pursuant
to a DSB authorization.
69
Q64. If the Panel were not able to reach a co nclusion on the first claim of the European
Communities under DSU Article 23, do you think the Panel should proceed to examine the
second claim of violation of Article 22.8 of the DSU?

234. The European Communities is not quite sure how to understand this question.
235. If this question refers to a situation where the Panel would find that there is no violation with
regard to the two claims which the European Co mmunities has set out under Article 23 (Article 23.1
in conjunction with Article 23.2(a) and 21.5, on th e one hand, and Article 23.1 in conjunction with
Article 22.8, on the other), then the European Communities would indeed request the Panel to proceed
to examine the claim under Part II of the EC First Written Submission.
236. However, if the question means to refer to th e possibility of a "non liquet" decision by the
Panel on Article 23, the European Communities would contest that such a possibility exists. Panels

66 Panel Report, Korea – Procurement, at para. 7.96.
67 EC First Written Submission in DS320 (US), at para. 108.
68 See only Appellate Body Report US – Shrimp, para. 158.
69 Note that Article 22.8 is "primary" law compared to the DSB authorization, which, emanating from a
body set up under the "primary" law (i.e. the agreements), is "secondary" law. It is worthwhile thinking about
hierarchy issues in that regard. In the European Comm unities' view (admittedly drawing a direct analogy to EC
law), the "secondary" law is subordinated to "primary" law requirements.

do not have the option of making "non liquet" decisi ons under the dispute settlement system. As the
Appellate Body has emphasised in the context of the discussion on judicial economy and in reference
to Article 3.7, second sentence, it is the role of the Panels to secure a positive solution to a dispute .
70
The Appellate Body has gone on to state that
A panel has to address those claims on which a finding is necessary in order to enable
the DSB to make sufficiently precise recomme ndations and rulings so as to allow for
prompt compliance by a Member with those recommendations and rulings "in order
to ensure effective resolution of disputes to the benefit of all Members." [footnote
omitted]
71
237. It is, therefore, excluded, to simply "not reach a conclusion" on a claim that is not only central
to, but indeed the very essence of the dispute at hand. If a panel were to do so it would be either
diminishing the rights of one party or adding to the rights of the other. Article 3.2 DSU prohibits both
such outcomes.
Q65. Canada and the United States have argued that the EC measure taken to comply with
the recommendations and rulings of the DSB in the Hormones case are incompatible with
Article 5.1 and 5.7 of the SPS Agreement. However, the European Communities does not make
any reference to these provisions, either in its requ est for establishment of the panel, or in its
first written submission. Do the parties believe that the Panel has, nonetheless, jurisdiction to
review the compatibility of the EC implementing measure with Articles 3.3, 5.1 and 5.7 of the
SPS Agreement ? On what legal basis should the Panel consider itself entitled/not entitled to
address the arguments of Canada and the United States in relation to the SPS Agreement?

238. The Panel's jurisdiction is governed by its term s of reference. As the Appellate Body has
made clear
The jurisdiction of a panel is established by that panel's terms of reference, which are
governed by Article 7 of the DSU. A panel may consider only those claims that it has
the authority to consider under its term s of reference. A panel cannot assume
jurisdiction that it does not have.
72
239. It seems clear, thus, that in the present case the Panel has no jurisdiction to address
Articles 3.3, 5.1 and 5.7 of the SPS Agreement , which do not appear anywhere in the request for
establishment of the Panel on which the Panel's terms of reference are based.
240. The issue is a perfect illustration of the problems arising if an implementing member is forced
to bring a case alleging compliance, instead of the original complaining party bringing a case alleging
non compliance (other aspects of which have b een discussed elsewhere in this submission. 73) The
terms of reference become wholly devoid of their meaning and the panel's jurisdiction turns into a
moving target depending on whatever allegations of inconsistency th e "defending" parties will come
up with. It is clear that the dispute settlement system is not designed to accommodate such a
procedural constellation.
241. At best, one could venture to draw an analogy to affirmative defences. These are raised by a
defending party without usually be ing referred to by the complaining party in its request for
establishment of a Panel or its first written submissi on. The violation claims raised by the defending

70 See only Appellate Body Report, Australia – Salmon, at para. 223.
71 Ibid.
72 Appellate Body Report, India – Patents, at para. 92.
73 See for example, Question 62.

parties here, thus, would have to be assimilated to affirmative defences. The burden of proof to
establish a prima facie case on such violations would, as with affirmative defences, then rest on the
defending parties.
74
Q66. In this particular case, would it be for the European Communities to prove the
compatibility of its measure with Article 5.7 of the SPS Agreement because it applies certain
aspects of that measure provisionally or woul d it be for Canada and the United States to
demonstrate a violation of Article 5.7 because they consider that the EC measure is in breach of
that provision? Could the parties discuss the application of the burden of proof in relation to
Article 5.7 in light of the panels and Appellate Body findings with respect to that provision in
Japan – Agricultural Products II and Japan – Apples?

242. The United States and Canada have the burden of asserting and making a prima facie case on,
a violation of Article 5.7 of the SPS Agreement. There are at least two reasons for it. The first reason
is the specific procedural constellation of this case: It is not for the European Communities to show
compliance, but for the United States and Canada to show non-compliance, all the more if that non-
compliance relates – as is the case with Article 5.7 – to an inconsistency which did not exist in the
original case and is therefore not covered by the rulings and recommendations of the DSB.
75
243. The second reason is, more generally, that according to the burden of proof rules, it is for the
party asserting the affirmative of a particular claim or defence to make a prima facie case. Article 5.7,
in the view of the European Communities does not constitute a defence (of the kind that Article XX of
the GATT is) but is rather a special regime in relation to Article 5.1 of the SPS Agreement. Thus, it is
not an exception any more than Article 3.3 of the SPS Agreement is an exception. It applies to
provisional measures as opposed to the regular (defin itive) measures under Article 5.1. As a regular
claim, therefore, it is for the side alleging the violation, to make a prima facie case.
244. This reading is not contradicted by the case law so far. Indeed, it cannot be inferred from the
case Japan – Apples that the burden of proof would be on the party that has adopted the provisional
measure. Japan in that case, had voluntarily accepte d the burden of proof. The Appellate Body was
careful to stress that this assignment of the burden of proof to Japan by the panel was not challenged
on appeal.
76
245. The European Communities notes that on this poi nt it shares the position of the United States.
At the meeting of the DSB held on 10 December 2003 when the panel report in the case DS245 Japan
– Apples was adopted, one of the points of disagreement e xpressed by the US delegate related to that
panel's approach to the burden of proof under Article 5.7. According to the report of the meeting the
delegate stated:
The second point the United States wished to note was the Panel's conclusion that the
Member maintaining the measure had the burden of establishing that it met the
requirements of Article 5.7. Neither Japan nor the United States had supported this
conclusion, taking the position that here, as with other claims, the complaining party
had to bear the burden of proving that the measure did not meet the obligations set
forth in a WTO provision.
77
Q67. Do the parties consider that Article 5.7 applies only when no risk assessment can be
made at all or also when scientific evidence exists but is insufficiently specific?

74 See also reply to Question 62.
75 See also reply to Question 65.
76 Appellate Body Report, Japan – Apples, paras 175 and Footnote 316.
77 WT/DSB/M/160 of 27 January 2004 at para 9.

246. It is generally accepted that Article 5.7 is applicable both when no risk assessment can be
made at all, as well as when scientif ic evidence exists but is insuffici ently specific or when the latest
scientific evidence from any credible and objectiv e source raises doubts or puts into questions the
previously held scientific opinion about the safety or dangerous nature of the substances in question.
This is very well explained by the Appellate Body inter alia in paragraphs 194 and 205 of its report in
the hormones dispute.
Q68. Do all parties agree that the term "on the basis" in Article 5.7 of the SPS Agreement has
the same meaning as "on the basis" in Article 5.1, i.e. that a "rational relationship" is required?

247. First, it should be noted that there is a differen ce in wording in the two Articles. Article 5.1
requires that SPS measures are "based on"
 a risk assessment, whereas Article 5.7 requires that
provisional SPS measures be adopted "on the basis of" available pertinent information. Arguably, "on
the basis of" would suggest a more remote relations hip than "based on." That reading would tie in
with the following substantive analysis:
248. It is clear that both "based on" and "on the basis of" suggest a – as the Appellate Body put it
in the context of Article 5.1 ("based on") – "objective relationship between two elements."78 The crux,
however is, that that relationship is between different elements depending on whether one is in the
context of Article 5.1 or in the context of Article 5.7. In the context of Article 5.1, it is the
relationship between the SPS measure and a risk assessm ent, in the context of Article 5.7 it is the
relationship between the (provisional) SPS measure and available pertinent information. That
difference necessarily changes the nature of the relationship. Indeed, it would be illogical to apply the
same standard of objective or rational relationship to a situation where there is full scientific evidence
available and a situation where that evidence is insufficient.
Q69. During the EC – Hormones proceedings, the European Communities was of the view
that "the scientific evidence concerning the need to regulate the use of hormones was in itself
sufficient to justify its legislation and the Eu ropean Communities did not need to rely on the
exception provided for in Article 5.7 concern ing cases where relevant scientific evidence was
insufficient" (DS26/R/USA, para.4.239). Does this mean that "the evidence concerning the need
to regulate the use of hormones generally" is di fferent from the specific evidence concerning the
health risk associated with the administration of hormones in animals for growth promotion
purpose? Is there sufficient evidence concerning the latter?

249. It is not entirely clear why only this sentence is cited from paragraph 4.239, which is much
longer. It would also seem that the reply to this qu estion is intimately linked to the replies to Question
No 19 above (why is the ban on five hormones now provisional), Question 30 (insufficiency of the
information), Question 34 (safety of the hormones) , Question 70 (available pertinent information),
Question 73 (evolution of scientific understanding) and all other Questi ons dealing with the different
steps of the risk assessment. The European Communities respectfully refers the Panel back to its
replies to these questions.
250. The European Communities found that the eviden ce which is normally taken into account for
the assessment of substances of this kind, whether of general or specific nature, is insufficient,
inconclusive and contradictory for five of these hor mones. Indeed, the new scientific studies that have
been initiated since the DSB recommendation in the hormone case, in order to address the scientific
information that was found by the panel and the A ppellate Body to be missi ng, have now identified
new important gaps, insufficiencies and contradic tions in the scientific information and knowledge

78 Appellate Body Report, EC – Hormones, at para. 189.

now available on these hormones, which have together reinforced the need for even more studies.
Evidence from other sources is also putting in doubt the sufficiency of the basis upon which the
defending members and other bodies have come to the conclusions that the residues of these
hormones in meat from animals treated for growth promotion (see, e.g., the study contained in the
exhibit to Question No 34 above).
251. The previous Directive 96/22/EC was drafte d in 1995 and adopted in 1996 as a codification
of the pre-existing European Community measures in this area. This happened at a time where
international guidance on how to perform a risk assessm ent was not yet available to tackle situations
where scientific information was insufficient to conclusively assess a particular risk, in accordance
with a member's chosen level of health protecti on. For example, at that time there did not exist
standards nor guidelines from the Codex Alimen tarius Commission on how to perform a risk
assessment and risk analysis. Moreover, the provisions of Article 5.7 have now been clarified in a
number of panel and Appellate Body reports, starting with their reports in the hormones case, which
was not the legal situation before 1996.
252. Substantive international discussions have lead to the development of the Working Principles
for Risk Analysis for Application in the Framework of the Codex Alimentarius Commission
79 after
1996. This has only been adopted by the Codex Alimentarius Commission in at the 26 th Codex
Alimentarius Commission meeting at Rome in July 2003. The relevant concepts developed there have
been taken into account by the European Communiti es and have now influenced the drafting of its
framework Food Law, namely Regulation 2002/178/EC.
253. It follows that at that time the European Co mmunities believed the information was sufficient
– in light of the general knowledge available at the time - because it had identified potential risks
which were found to be unacceptable in respect of its own chosen level of protection, and because it
could not complete a risk assessment in the sense expl ained by the Appellate Body and the Panel for
the first time in the hormones case, nor according to the Codex Alimentarius guidelines on risk
analysis which were adopted much later. This is for all five hormones, and obviously for the
melengestrol acetate (MGA).
254. As regards the possible differences between the evidence concerning the health risk
associated with the use of hormones generally or w ith the administration of hormones in animals for
growth promotion purposes, they are further elaborat ed in the reply to the next Question. The short
reply is that evidence from both of situations is relevant for the performance of a risk assessment in
the sense of the SPS Agreement, because both sources of evidence impact upon and inform each other.
It is also clearly in the case of these hormones the outcome of the European Communities' risk
assessment that the specific ev idence concerning the health risk asso ciated with the administration of
hormones in animals for growth promotion purpo se is insufficient and inconclusive, except for
oestradiol 17b.
Q70. Having regard to the statement of the United States in paragraphs. 151-152 of the first
US written submission, the Panel notes that Article 5.7 of the SPS Agreement talks about
"available pertinent information" on the health risk . In the parties' views, does this mean that
the "available pertinent information" under th e circumstances of the current disputes refer to
the information on risks associated with the co nsumption of meat from animals treated with
hormones for growth promotion purposes according to good veterinary practice? Or, does it
refer to the risk of the five hormones to human health generally?

79 see at ftp://ftp.fao.org/codex/Publications/ProcManuals/Manual_14e.pdf.

255. Both the information concerning the health risk associated with the use of hormone generally
and the information on risks associated with the ad ministration of hormones in animals for growth
promotion purposes according to GVP, and the consumption of meat thereof, are two distinct but
complementary and necessary components of an overall risk assessment of the consumption of meat
from animals treated with hormones for growth promotion purposes.
256. This has to be understood as two concentric ci rcles of evidence, both informing the risk
assessment, the big circle, with respect to the general use of hormone, and the interior circle, related to
the specific use considered. It is only if the latest st age of risk characterization of the inner circle can
be reached, once hazards would have been iden tified and characterised, and exposures properly
measured, that the specific risks of the inner circle, for the specific use at stake, could be singled out
from the risks of the big circle.
257. In the context of Article 5.7 of the SPS Agreement, and under the circumstances of the current
disputes, "available pertinent information" therefore refe rs to either types of information, if one or the
other warrants that a provisional measure be taken.
258. As an illustration, if a serious hazard is identifie d for the general use of a product, before that
hazard can be properly characterized in the context of a specific use, and the relevant hazard exposure
assessment properly measured for that specific use, th e serious hazard identified should certainly be
"available pertinent information" in the context of the specific use in order to enable the adoption of
provisional measures to circumscribe that potential risk. Ruling to the contrary would seriously
undermine public health, for the least, or even be criminal.
Q71. Article 5.7 of the SPS Agreement requires that a Member review the measure within a
reasonable period of time. In the parties' view, how long should this reasonable period of time
be in this case? At which point of time should the calculation of the reasonable period of time
start? Has the European Communities conducted such a review after the adoption of Directive
2003/74/EC in September 2003? What is the plan of the European Communities to conduct
such review?

259. The length of a reasonable period of time varies from case to case, and depends notably on
how quickly and how much additional pertinent in formation is obtainable. It is noteworthy for
instance, that within the Eur opean Communities, differences in the constitutional requirements, as
compared to the legal system of other members, may require different timings for amending a
measure of this kind. It took indeed virtually thr ee years between the time of the proposal of Directive
2003/74/EC and its final adoption and publication.
260. Certainly, the start of the reasonable period of time to review a measure can not seriously start
before the provisional measure being enacted, i.e. implemented, namely 14 October 2004 in the case
of Directive 2003/74/EC.
261. The whole chronology of the current case, after the Appellate Body report in the EC –
Hormones case, has indicated a permanent review of the available information and of the risk
assessment. The first opinion of the SCVPH was issued in April 1999 and, as explained in recital 8 of
Directive 2003/74/EC, the SCVPH reviewed its assessment in May 2000 in the light of new
information, including the JECFA opinion of February 2000, as well as in April 2002 in the light of
the most recent scientific data.
262. In the present situation, recitals 10, 12 and ar ticle 9 of Directive 2003/74/EC set out already
identified deadlines to review some elements of the scientific evidence, which related to the

therapeutic and zootechnical uses, and requires that additional information be sought, and that the
measure be kept under regular review with a timely presentation of any necessary proposals.
263. The recent draft report from the UK authorities (E xhibit US – 20) has already been referred
by the European commission to the European Food Safety Authority for evaluation (EFSA being the
new scientific independent advisory body responsib le for performing the assessment of risks for this
kind of substances).
264. Furthermore, a review of the 2002 SCVPH opinion has been commissioned by EFSA, which
has issued on 12 September 2005 a new call for ne w scientific data and research, from 2002 onwards,
on substances with hormonal activity which may be used for growth promotion purposes in bovine
meat.
80
Q72. Please explain what you understand to be the relationship between Article 3.1 and
Article 5.7 of the SPS Agreement?

265. The European Communities understands this question to be inquiring whether, in the presence
of an international standard, guideline or reco mmendation that is based on a risk assessment it is
possible to adopt a provisional sanitary measure on th e grounds that the relevant scientific evidence is
insufficient.
266. In the European Communities' view, this is i ndeed possible. A Member may disagree with
the risk assessment for scientific reasons and, in pa rticular, on the issue of whether the scientific
evidence relied upon is sufficient. Such disag reement may stem from differences of views on
scientific questions such as methodology, data interpre tation etc.; it may also result from the fact that
in order to meet a higher level of protection, th e Member concerned may require more information
than what is provided in the risk assessment in questi on. Article 3.3 of the SPS Agreement applies, at
least by analogy.
267. As a concrete example, the JECFA study referred to by the defending parties did not take into
account the data obtained in the seventeen studi es which had been performed upon the initiative and
with the funding of the European Communities.
Q73. Do you consider it possible that scientifi c evidence may be judged to be sufficient to
undertake a risk assessment at a particular point in time, and yet considered to be insufficient
for the same purpose several years later? Does the fact that a significant number of scientific
studies have been undertaken with regard to these potential risks in the intervening years have
any relevance for your response? Does the existe nce of international standards have any
relevance? Please explain?

268. The first part of the question is obvious. The 20
th century's history of Public health is full of
such cases in members, whereby a risk assessment at a given point in time was felt to be based on
sufficient evidence, while at a late r stage new scientific evidence had contradicted previous evidence,
and the same situation required the conduct of furthe r scientific studies and the review of its risk
assessment.
269. This tautology is the simple consequence of the dynamic nature of scientific knowledge and
from the scientific dialectic in research. New fi ndings in scientific research improve scientific
understanding, which in terms identifies new questions to resolve, which leads to further research.

80 See http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/c_238/
c_23820050928en00050006.pdf.

270. It is also noteworthy that this goes either way, that is a product may be initially banned or be
strictly controlled on the basis of its initial risk assessment, while further scientific information may
later suggest that risks may have been originally overestimated and in turn require further scientific
information to assess more accurately these risks. Vi ce versa, a product may have been authorised on
the basis that its risk assessment i ndicated a satisfactory level of protection, while later scientific
studies may identify new potential impacts or hazards that require further studies and research to be
accurately characterised.
271. This evolution in the scientific understanding of a particular risk assessment may not only
come because new scientific eviden ce may identify new risks (or new reasons of safety), but also
because new risk assessments may be performed accord ing to evolving international standards. For
instance, there were no international standard s or guidelines on how to perform a proper risk
assessment at the time of our initial measure, while now there are, which identifies the recommended
steps (e.g. risk characterization, dose/exposure res ponse, etc.). These were developed after the first
hormone panel and the Appellate Boy reports.
272. There is a plenty of such examples where this o ccurred, but just to cite a few various ones in
public health, here are some: BSE, asbestos, AIDS, DDT, softenon, even radioactivity or some food
colouring or flavouring substances.
273. In the case at stake in these proceedings, most importantly, not all scientific evidence was
available at the time, and the new scientific studies have certainly modified the content of the risk
assessment. By identifying new hazards, it also requir es a new risk assessment to be performed to fill
the gaps and the uncertainty identified in the scientific evidence.
Q74. Assuming the Panel deems it necessa ry to determine whether the European
Communities revised measure compli es with certain provisions of the SPS Agreement , do the
parties consider that the consultation of scienti fic experts would be necessary or only useful?
What would be the issues on which experts should be consulted? To the extent feasible, should
the Panel consult the experts consulted in the EC – Hormones case?

274. The scientific issues that are relevant for the use of hormone having oestrogenic, androgenic,
or gestagenic action, used as growth promoters in meat production, are extremely complex and
difficult. The European Communities' scientific Co mmittees have been working on them for several
years. The European Communities does not believe th at it is necessary for this Panel to look into any
scientific issues to make its necessary findings and ru lings within its terms of reference in this
particular case.
275. However, the European Communities does not believe that the Panel would have the
expertise to decide on such issues itself, should th e Panel decide to go down of deciding the scientific
issues at stake. In such a scen ario, the European Communities be lieves that the consultation of
scientific and technical advice would be absolutely necessary. In such an unlikely scenario, experts
should be consulted. However, the European Communities considers that this Panel cannot consult the
experts that were used in the original EC – Hormones case because three of the five experts are now
clearly known to have worked and have close ties with the pharmaceutical industry, the views of one
expert were considered not relevant by the A ppellate Body in this case, and the fifth one has
subsequently conducted scientific studies for the European Commission. Therefore new experts will
have to be chosen.

ANNEX B-2

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

(3 October 2005)

Questions to Canada

Q35. Canada claims that it is entitled to maintain its suspension of concessions or other
obligations as long as the DSB has not decided to withdraw its authorization. However, one may
argue that, even with the authorization of the DSB, the Member concerned is not obligated to
impose the retaliatory measures. In addition, Article 22.8 provides that the suspension of
concessions "shall only be applied until such time as the measure found to be inconsistent ... has
been removed". In that context, why does Cana da believe that a decision of the DSB is
necessary for it to remove its retaliatory measures?

1. Canada does not believe that a decision of the DSB is necessary for it to remove its retaliatory
measures. As the Panel notes, a Member is not oblig ated to impose retaliatory measures even when it
has authorization to do so. Nor does it have to wa it for a decision of the DSB before it may remove
them. The issue, however, is not when a Member may remove its retaliatory measures but when it
must do so. According to Article 22.8 of the DSU, it must do so when, inter alia, the measure found
to be inconsistent has been "removed" ( i.e., brought into compliance). In the absence of agreement
between the disputing parties that the inconsiste nt measure has been "removed", the question that
arises is who may make that determination.
2. In accordance with Articles 21.6 and 22.8, sec ond sentence, of the DSU, disputes remain
under the surveillance of the DSB until they are reso lved. As a result of this ongoing surveillance, and
in the light of an explicit authorization by the DSB under Article 22.7 to suspend concessions, it is for
the DSB to confirm that the inconsistent measure has been removed.
3. In the circumstances of this case, the EC claims that it has removed its measure and Canada
disagrees. It therefore is the responsibility of the DSB to determine whether the EC has done so before
Article 22.8 of the DSU can have been satisfied. A decision by the DSB to terminate the authorization
is simply a consequence of the confirmation by the DSB that the conditions of Article 22.8 have been
met.
Q36. With reference to paragraph 47 of Canada 's first written submission, could Canada
explain how the suggested initiation of "new proceedings in which [the EC would request] the
Panel to determine the actual compliance of a measure [the EC] has adopted to implement the
recommendations and rulings of the DSB" woul d operate under the WTO dispute settlement
system?

4. Paragraph 47 of Canada's First Written S ubmission refers to panel proceedings de novo. The
EC would initiate panel proceedings, as it has done in the present case, alleging that one of the
conditions of DSU Article 22.8 has been fulfilled. The EC would assume the burden of demonstrating
to the panel that its measure is now compliant w ith the recommendations and rulings of the DSB in
EC – Hormones , that the EC has "removed" the measure that was previously found to be non-
compliant, and that consequently, pursuant to DS U Article 22.8, Canada is no longer entitled to
suspend concessions. If the EC had assumed that burden at the outset of these proceedings, as it

appears to have done in Part II of its First Writte n Submission, then the current proceedings would
replicate the scenario set out above.
5. As a responding party, Canada would be entitled to demonstrate, by way of defence, other
inconsistencies of the EC's measure with the cove red agreements. Such inconsistencies would be an
affirmative defence on Canada's part in respect of the alleged violation of DSU Article 22.8. By
demonstrating that the EC's measure is inconsistent with other provisions in the covered agreements,
Canada would effectively disprove the EC's clai m that the measure previously found non-compliant
had been "removed" (within the meaning of DSU Article 22.8). The burden would be on Canada to
demonstrate the existence of any other inconsiste ncies on the part of the EC. A responding party is
entitled to put forward an exception or other affirma tive defence regardless of the terms of reference
of the panel.
1
6. If such a panel were to find that the EC's measure complies with the recommendations and
rulings in EC – Hormones and Canada were not able to dem onstrate any inconsistency with other
obligations, the panel would then make a recomme ndation to Canada that it lift the suspension of
concessions. The adoption of such a report woul d constitute implicit revocation of the DSB's
authorization to Canada to suspend concessions.
7. If the panel were to find that the EC measure does not comply with the recommendations and
rulings, or is inconsistent with ot her obligations of the EC in a covered agreement, it would not make
a recommendation to Canada.
Q37. Other than through recourse to an Ar ticle 21.5 panel, is there any other manner
whereby the EC can seek to obtain a multilateral determination on whether or not its
compliance measure has removed the WTO inconsistency?

8. Adoption by the DSB of a panel report resu lting from the process described in Canada's
answer to question 36 above, with a finding that the EC had complied, would constitute multilateral
confirmation of the EC's compliance.
9. The parties could also, by agreement, have recourse to arbitration pursuant to DSU Article 25,
the result of which would be notified to the DSB.
Questions to Canada and the United States

Q43. Do Canada and the United States agree wi th the European Communities' statement in
paragraph 32 of its first written submission that the specific forms described in paragraph 2 [of
Article 23 of the DSU] do not exhaust the list of prohibited unilateral actions and its reference to
the Panel Report in US – Section 301 Trade Act? Why?

10. Yes, Canada agrees. Article 23.2 of the DSU is not exhaustive but sets out certain "specific
and clearly-defined forms of prohibited unilateral ac tion" covered by the gene ral rule in Article 23.1.2
However, any action impugned under Article 23.2 must first fit under the circumstances described in
Article 23.1. In other words, in order for there to be a violation of either the general obligation to

1 See United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India , Report
of the Appellate Body, WT/DS33/AB/R and Corr.1, adopted May 23, 1997, at p. 14; United States – Tax
Treatment for “Foreign Sales Corporations" – Recou rse to Article 21.5 of the DSU by the European
Communities, Report of the Appellate Body, WT/DS108/AB/RW, adopted January 29, 2002, at para. 133 [US –
FSC (Article 21.5 – EC) ]; and India – Quantitative Restrictions on Im ports of Agricultural, Textile and
Industrial Products, Report of the Appellate Body, WT/DS90/AB/R, adopted September 22, 1999, at para. 136.
2 See Canada's First Written Submission, at para. 71.

"have recourse to, and abide by, the rules and proce dures" of the DSU set out in Article 23.1, or one
of the specific prohibitions enumerated in Article 23.2, it has to be established that a Member is
"seek[ing] the redress of a violation of obligations" under the covered agreements.
11. The concessions to the EC that Canada is curre ntly suspending are not to redress an alleged
WTO inconsistency of the EC's new measure. The concessions are being suspended on the basis of a
DSB authorization which has not been terminated nor have the conditions required for its removal
been established by the EC. Canada's action in respect of the original measure – which is at issue here
– is thus fully consistent with Article 23.1's ad monition that Members shall abide by the rules and
procedures of the DSU.
Q44. Do Canada and the United States agree with the European Communities that whenever
there is a violation of Article 23.2 of the DSU, there is always a violation of Article 23.1?

12. If a Member is seeking redress of a perceived WTO violation by means of one of the specific
forms of prohibited unilateral action set out in paragr aphs (a) to (c) of Article 23.2 of the DSU, there
would also be a violation of the general rule to ha ve recourse to and abide by the rules and procedures
of the DSU set out in Article 23.1 of the DSU. Artic le 23.2 is an illustration of the general rule in
Article 23.1 of the DSU and applies only when a Member is seeking redress of a WTO violation. This
is apparent from the chapeau of Article 23.2, which includes the phrase "in such cases", thereby
referring to when Members "seek the redress" of a WTO violation.
Q45. Do Canada and the United States consid er that the European Communities could have,
as the party having to comply, effectively made a recourse to Article 21.5, in the light of the
recourse to Article 21.5 by the European Communities in the EC - Bananas III case? If yes, and
in light of Article 6 of the DSU, who would be the complainant, and what would be the
complaint?

13. Under DSU Article 21.5, the EC could initiate the proceeding and request a ruling that the EC
has complied with the recommendations and rulings of the DSB in EC – Hormones. The EC would be
the "complaining party" in a broad sense, i.e., the party that would initiate the proceedings. Canada
notes that DSU Article 6.1 refers to a "complaini ng party" but DSU Article 6.2 refers to "the
applicant". The "complaint" in a broad sense, i.e., the subject matter of the proceeding, would be that
the EC has complied with the recommendations and rulings of the DSB. The EC would have the
burden of making a prima facie case to that effect and would have to put forward sufficient evidence
and arguments to meet that burden.
14. A proceeding under DSU Article 21.5 would not necessarily require the involvement of a
respondent party. The absence of a respondent party would not deprive a panel of jurisdiction. Even
without the participation of a respondent pa rty, legal consequences will flow from the
recommendations and rulings of the DSB when it adopts panel and Appellate Body reports.
15. The report in EC – Bananas III (Article 21.5 – EC) demonstrates that the DSB established a
DSU Article 21.5 panel for the purpose of having th e EC seek confirmation of the WTO consistency
of its own measure, and that the procedure under DSU Article 21.5 was used by the EC to that effect.
3
Q46. Presuming that Canada and the United St ates are interested in a prompt resolution of
this dispute, why have they not initiated the ex pedite procedure of Article 21.5 to challenge the
EC implementing legislation as they do in these proceedings?

3 European Communities – Regime for the Importati on, Sale and Distribution of Bananas – Recourse
to Article 21.5 by the European Communities , Report of the Panel, WT/DS27/RW/EEC, April 12, 1999,
unadopted.

16. As Canada has explained in its answer to question 50, Members of the WTO have a variety of
means and avenues through which to deal with existing trade disputes. Although Canada has no
obligation to initiate WTO dispute settlement pr oceedings, the initiation of proceedings under DSU
Article 21.5 is an option that Canada may exer cise depending on the particular circumstances of a
case. In this case, Canada chose not to exercise that option.
Q47. With reference to the European Communities' statement in paragraph 62 of its oral
presentation, could Canada and the United St ates confirm whether, and explain why, the
implementation of the EC – Hormones case has "practically not b een on the DSB agenda since
July 1999?

17. According to Article 21.6 of the DSU, the implementation of adopted recommendations and
rulings remains under the surveillance of the DSB until the dispute is resolved. Article 22.8, second
sentence, of the DSU provides that DSB surveilla nce continues even after concessions have been
suspended. Article 21.6 of the DSU also provides that disputes will be placed on the meeting agenda
of DSB meetings, but provides the DSB with the discretion not to place it on the agenda. In other
words, while the DSB has the discretion not to pl ace a dispute on its formal meeting agenda, it does
not have the discretion to remove a dispute from its surveillance until it is resolved.
18. The EC – Hormones dispute remained on the DSB agenda until the adoption of the
authorization to suspend concessions, prior to whic h time the EC provided regular reports on its plans
to implement the recommendations and rulings of the DSB. Once it became clear, however, that the
EC would take some time to implement and that the implementation reports were substantially the
same from meeting to meeting, the DSB exercised its discretion under Article 21.6 and removed the
item from its meeting agenda until there was someth ing new to report. The fact that the EC's
implementation of the recommendations and rulings in EC – Hormones was removed from the DSB's
meeting agenda does not mean, however, that it w as no longer legally under the surveillance of the
DSB.
19. The EC, in fact, acknowledged that its implemen tation remained under the surveillance of the
DSB when it notified in a communication to the DSB that it had adopted a measure to implement the
recommendations and rulings in EC – Hormones .
4 For the EC now to call into question the ongoing
surveillance of the DSB by arguing that the dispute has "practically not been on the DSB agenda since
July 1999" is simply an effort to elevate form over substance.
Q48. The European Communities states in paragraph 44 of its oral statement that "a
'determination' ... need not be pinned down to a specific statement in a specific form, it is the
whole conduct a WTO Member is displaying that needs to be looked at". Why would this not be
the case here? If the sum of US and Canadian statements, actions and arguments are not a
unilateral determination of violation, isn't it at least evidence of their disagreement with the
European Communities within the meaning of Article 21.5?

20. A determination within the meaning of Artic le 23.2(a) of the DSU can only occur, as
specified in the chapeau of Article 23.2, "in such cases" where a Member seeks the redress of an
alleged WTO violation. Canada acknowledges that there is a disagreement regarding the WTO
consistency of the EC's new measure within the m eaning of Article 21.5 of the DSU. However, this
"disagreement" is not tantamount to a "determinati on" within the meaning of Article 23 since Canada
has not acted to seek redress against the EC for this alleged violation. Unlike what is argued by the

4 EC – Hormones , Communication from the European Communities, WT/DS26/22, WT/DS48/20,
October 28, 2003.

EC, it cannot be inferred
 from Canada's continued suspension of concessions that it is seeking the
redress of a violation other than that identified in EC – Hormones; nor, therefore, can it be inferred
that Canada has made a "determination" with rega rd to the EC's new measure in contravention of
Article 23.2(a) of the DSU.
21. The legal basis for Canada's suspension of concessions is not Canada's views on the
inconsistency of the EC's purported implementing measure but rather the absence of affirmative
multilateral confirmation of the EC's compliance a nd the ongoing validity of the DSB authorization.
Until such time as the DSB authorization is termin ated, Canada's assessment of the WTO consistency
of the EC's new measure remains unrelated, and i rrelevant, to Canada's continued suspension of
concessions.
Q49. Can the United States and Canada ex plain whether they provided answers to the
European Communities' requests for information on scientific studies made by the European
Communities? If not, why?

22. The EC sent a letter dated April 8, 1998, to th e Government of Canada requesting the full
scientific studies including raw data on which Canada based its decision to authorize the use of the six
hormones in question for growth promotion in cattle.
23. Health Canada responded in a le tter dated August 4, 1998, that th e Government of Canada is
required by Canadian law to hold the requested data and studies in confidence and cannot by law
release this information to a third party. In this same letter, Health Canada provided the full names
and addresses of each of the firms with proprietary rights to the information the EC had requested, as
these are the only parties permitted under Canadian law to release the requested information, and
invited the EC to contact these firms directly to request the data and studies.
24. The EC subsequently repeated its request to Canada in another lette r, and Health Canada
responded on February 26, 1999, furt her clarifying that Canada's Access to Information Act prevents
Canada from disclosing any record that contains confidential scientific or technical information
supplied to the government by a third party. Canada also noted in this letter that the EC had not yet
contacted the companies concerned, i.e., those with proprietary rights to the information the EC had
requested. Canada is not aware that the EC h as since contacted these firms. Canada received no
further requests from the EC for this or other related information.
Questions to all parties

Q50. Could each party provide the Panel with a detailed account of the efforts it has made to
solve this dispute since the notification by the European Communities of its implementing
measure in 2003?

25. Members of the WTO have a variety of means and avenues through which to discuss existing
or potential trade disputes. Some of these are more formal than others; informal discussions prior to
the commencement of WTO consultations under DSU Article 4 were "diplomatic" in nature and
therefore normally considered to be confidential. Canada can confirm that through its Missions in
Brussels and Geneva, as well as through capital-based officials, it held a series of informal discussions
with various officials of the EC Commission soon after the announcement by the EC of its purported
compliance measure. These discussions were aimed at resolving both the substantive and the
procedural elements of the current dispute.

26. More formally, since the implementation of th e EC's 2003 Directive, Canada has repeatedly
indicated – including through comments made at meetings of the DSB – its desire to discuss with the
EC the reasons why it considers it has brought itself into compliance.
27. Canada and the EC held a videoconference in April 2004, with the express purpose of
clarifying the alleged scientific basis for the EC's claims to have brought itself into compliance. The
EC was unable to provide complete responses to many of Canada's questions presented in this
exchange. Canada has continued to express its willi ngness to engage in further technical discussions,
but none has taken place.
Q51. Having regard to the first claim of the European Communities, in a post-retaliation
phase, if a suspension of concessions is consiste nt with Article 22.8, can it nevertheless be
inconsistent with Article 23 of the DSU? Under what circumstances? Please elaborate.

28. No. A measure suspending concessions that is c onsistent with Article 22.8 of the DSU cannot
at the same time be inconsistent with Article 23. A measure that is authorized by the DSB cannot be
conduct that constitutes a unilateral determina tion for the purposes of DSU Article 23.2(a). A
determination for purposes of a breach of Article 23. 2(a) involves conduct by a WTO Member that is
otherwise prohibited. If the suspension of con cessions is still authorized for the purposes of
Article 22.8, it cannot at the same time be prohibited for the purposes of Article 23.2(a).
29. The EC has attempted to define Articles 23.2(a) and 22.8 in a manner that makes them
operate independently of one another. There are, of course, circumstances in which a breach of
Article 23 can be found that does not involve Article 22.8 (such as when there is no DSB
authorization). However, when the conduct comp lained of is the same for the purposes of both
provisions – in this case, the suspension of con cessions – these provisions cannot be interpreted and
applied in isolation of each other.
Q52. In the US – FSC case, the European Communities suspended the application of its
suspension of concessions and then initiated an Article 21.5 procedure because it considered
that the US implementing legislation was inconsistent, inter alia , with the SCM Agreement.
Please give your views on whether it would also be possible to request the establishment of an
Article 21.5 panel while continuing to apply th e suspension of concessions pending the outcome
of the Article 21.5 procedure?

30. Yes, it would be possible for a WTO Member to request the establishment of an Article 21.5
panel while continuing to apply the suspension of concessions authorized by the DSB, pending the
outcome of the procedure under DSU Article 21.5.
31. Notwithstanding the decision of the EC in United States – FSC , a WTO Member that has
acted on a DSB authorization to suspend concessions is not obliged to reinstate concessions as a
precondition to a challenge of compliance of another Member's implementation measure, to
discontinue the suspension of concessions. In th e absence of a "mutually satisfactory solution",
Members are entitled to look to the DSB for multilateral confirmation that their suspension of
concessions is no longer authorized. There is no oblig ation to discontinue an authorized suspension
unless there is multilateral confirmation that the m easure taken to comply with the recommendations
and rulings is consistent with the covered agreements. Seeking such confirmation would be the
purpose of a proceeding under DSU Article 21.5.
Q53. Are the parties of the view that, in the absence of a challenge by the implementing party
against the continued suspension of concessions, su ch suspension can continue for an indefinite
period of time, even though they are supposed to be only temporary. If not, what provision of

the DSU can serve as a legal basis for preventing the suspension of concessions for an indefinite
period of time?

32. While Article 22.8 of the DSU specifies that suspension of concessions is to be only
"temporary", it does not impose actual time limits on the duration of that suspension of concessions.
The effective time limit, however, is always within the control of the implementing Member, in this
case the EC. When there is multilateral confirmation that the measure found to be inconsistent has
been removed, such that the conditions of Article 22.8 have been satisfied, the time limit expires and
the suspension of concessions is no longer justified. The failure of the implementing Member to seek
such multilateral confirmation, however, cannot be used to suggest that the Member suspending
concessions is attempting to do so "indefinitely".
Q54. Could the parties provide the Panel with their understanding of the meaning of the term
"measure" in Article 19.1 of the DSU and of the term "measures taken to comply with the
recommendations and rulings [of the DSB]" in Arti cle 21.5 of the DSU? More particularly, do
the parties consider that a measure taking, e.g., the form of a ban remains the same measure,
irrespective of the change in supporting legislation, as long as it is a ban? If not, what makes a
"measure taken to comply" different from th e measure which had to be brought into
conformity?

33. As DSU Article 19.1 applies generally to the dispute settlement system, the term "measure" in
DSU Article 19.1 has a broader meaning than "measu res taken to comply with the recommendations
and rulings [of the DSB]" in DSU Article 21.5.
34. The EC is not contesting that Directive 96/22/EC, as amended by Directive 2003/74/EC,
qualifies as a "measure taken to comply" within the meaning of DSU Article 21.5. Canada and the EC
disagree about the compliance of the EC's measure with the recommendations and rulings of the DSB
in EC – Hormones ; not
 about whether the EC's measure is a "measure taken to comply" within the
meaning of DSU Article 21.5.
Q55. When does the legal effect of the DSB authorization lapse and by what procedures?
Where parties disagree on the consistency of a noti fied implementing measure effected after the
DSU retaliation authorization, does the DSU auth orization lapse at the time when (i) the DSB
makes a decision of compliance with respect to the implementing measure, or (ii) the
implementing measure is in actual complia nce regardless of whether the DSB has made a
determination of compliance or not, or (iii) the Member concerned notifies its implementing
measure to the DSB and declares its compliance, or (iv) the DSB makes a specific determination
to terminate its previous retaliation authorization?

35. Option (i) is the correct interpretation of when the authorization lapses. That is, where parties
disagree whether a measure originally found non-co mpliant has been brought into compliance, the
DSB authorization ceases to have effect when comp liance has been confirmed multilaterally by the
DSB. The DSB need not formally revoke the authori zation; rather, the end of the authorization may
be implicit in the adoption by the DSB of panel a nd/or Appellate Body findings that an implementing
measure is compliant. Of course, there may be ci rcumstances in which the DSB would also formally
terminate the authorization at the same time that it confirms compliance, in which case option (iv)
would also apply.
Q56. Article 21.5 of the DSU provides that where there is a " disagreement as to the existence
or consistency with a covered agreement of measu res taken to comply with ... such dispute shall
be decided through recourse to these dispute settlement procedures." Since Article 21.5

provides that "such dispute shall be decided"
5 through recourse to [the DSU]", would the
parties consider that either of them has an obligation to refer the matter to the DSB under
Article 21.5? If yes, why?

36. No, there is no obligation on either party to initiate proceedings under DSU Article 21.5. The
obligation is for WTO Members, once they decide to resolve their disagreemen ts, to do so within the
framework of the DSU and not outside.
Q57. How would you distinguish between expressing "disagreement" over the WTO
compatibility of a measure taken to comply wi th recommendations and rulings adopted by the
DSB for the purpose of deciding whether or no t to start an Article 21.5 procedure and a
unilateral "determination" of WTO compatibility of such a measure?

37. A WTO Member may examine and analyze the measures of another Member and arrive at
certain views on the compliance of those measures. Such examination and analysis may result in the
Members disagreeing about the WTO consistency of the measures. This would not constitute a
"determination" within the meaning of DSU Article 23.2(a). In the light of Article 23.1, a
"disagreement" only becomes a "determination" once a Member takes action to "seek the redress of a
violation of obligations or other nullification or im pairment of benefits under the covered agreements
or an impediment to the attainment of any objec tive of the covered agreement". An example of a
"determination" within the meaning of Article 23.2(a) would be the hypothetical case of Canada
suspending further concessions to the EC, and thereby exceeding the level of suspension of
concessions authorized by the DSB, in response to the alleged WTO inconsistency of the EC's
implementing measure.
38. A disagreement in and of itself is not sufficient to constitute a violation of Article 23. Rather,
there must be action outside the rules and proce dures of the DSU that seeks redress of the perceived
violation before there can be a violation of Article 23.
Q58. In a situation where an Article 21.5 panel, requested to examine the compatibility of an
implementing measure, finds that only partia l compliance has been achieved, what is the
procedure available to the original complainant:

(a) Can it continue to apply the suspension of concessions initially authorized by the
DSB?
(b) Does it need to request a new authorization?
(c) Can the implementing party object to the level of suspension and request an
Article 22.6 arbitration to determine a new level of suspension of concessions?
39. When a panel finds that only partial complian ce has been achieved, it is effectively finding
that the authorized level of suspension of con cessions is no longer equivalent to the level of
nullification and impairment caused by the "partially compliant" implementing measure, as is required
by Article 22.4 of the DSU. There is no express mechanism in the DSU by which the level of
suspension of concessions can be readjusted to be equivalent again to the level of nullification and
impairment. However, any difficulties caused by the absence of such a m echanism arise in any
proceedings that review a measure taken to comply, regardless of who initiates the proceedings.
40. The fact that there are systemic difficulties in readjusting the levels does not mean that this
scenario creates insurmountable hurdles in resolving a di spute. If such a situation were to occur, the
parties to the dispute would work out in good fa ith between themselves how the level would be

5 Emphasis added by the Panel.

readjusted. The initial authorization would remain in effect, but the level of suspension of concessions
could be modified by the parties, either through mutual agreement or by recourse to Article 25
arbitration.
41. Therefore, only option (a) is appropriate, where the party suspending concessions would
continue to do so, albeit at an appropriately adju sted level. Neither option (b) nor option (c) is
appropriate because Article 22.7 specifically prohib its a new arbitration to establish the level of
nullification and impairment, which would be required to obtain a new authorization.
Q59. Is Article 23 of the DSU applicable to a suspension of concessions under a previous
authorization of the DSB and in the absence of a new DSB decision of termination of the
previous authorization?

42. Article 23 of the DSU does not apply to author ized suspension of concessions in the absence
of some intervention by the DSB that – either explicitly or implicitly – terminates the DSB
authorization. WTO Members that continue to suspend concessions under such authority – even in the
face of an implementing measure by the other Member – are not "seeking redress" of a perceived
violation. For a Member to be found in breach of Article 23 of the DSU, it must have acted in
response to a perceived violation by another Memb er of that Member's WTO obligations. If the DSB
authorization to suspend concessions remains in e ffect, a WTO Member that simply continues to
suspend concessions on the basis of this authori zation cannot be found to have engaged in conduct
prohibited by Article 23. In such circumstances, the Member's conduct continues to be based on the
DSB authorization and is therefore unrelated to the perceived compliance or non-compliance of the
implementing measure.
Q60. Having regard to the US reference to the DSU negotiations in footnote 202 of its first
written submission, could the parties indicate wh ich proposals have been made in that context
that would represent amendments to the current text of Articles 21.5, 22.8, 23.1 and 23.2(a) of
the DSU?

43. With respect to the relationship of the pr esent case to the DSU review process, the DSU
review process is entirely separate from and unrelated to the issues the Panel has been called upon to
resolve. The information requested concerns proposals by various WTO Members for future
amendments to the text of the DSU. Canada respect fully submits that it is the Panel's responsibility to
resolve the issues presented to it in the present case on the basis of the current text of the DSU (and
any other relevant covered agreements). The amendmen ts that have been proposed to the text of the
DSU are therefore irrelevant to the issues the Pa nel has been asked to address under its terms of
reference. This being said, the documents that contain proposals for amendments to Articles 21.5,
22.8, 23.1 and 23.2(a) of the DSU are contained in working documents JOB(04)/52, JOB(05)/47 and
JOB(05)/71. An earlier proposal was contained in WTO document TN/DS/W/32.
Q61. How does the principle of good faith affect the allocation of burden of proof in these two
disputes? What kind of presumption should be made by the Panel if/when applying this
principle? Does the application of this princi ple under the circumstances of the present disputes
lead to the conclusion that the EC's impl ementing measure shall not be presumed WTO-
inconsistent? Or, should the conclusion be that the US and Canadian measures of suspension of
obligations shall not be presumed to be inconsis tent with the DSU? Please elaborate on why one
specific conclusion is preferable than the other in your view.

44. The principle of good faith is not relevant to the allocation of the burden of proof in this
dispute. The application of this principle therefore does not create a presumption in favour of either
party.

45. In repeatedly raising the issue of good faith, the EC has confused the issues by suggesting that
to deny it a presumption of compliance in these circumstances would be tantamount to a presumption
that the EC has acted in bad faith. Canada does not argue that the EC has acted in bad faith, nor even
that it should be presumed not
 to comply.
46. Rather, the allocation of the burden of proof in th is dispute is determined by the existence of
the multilateral authorization and the existence of Canada's measure taken on the basis of that
authorization. That is, the EC cannot benefit from a presumption of compliance – such that it would
be presumed to have satisfied one of the conditi ons of Article 22.8 – for the simple reason that
allowing such a presumption would have the consequence of automatically rendering WTO
inconsistent a measure of another Member that was and remains authorized by the DSB. Since the EC
is in a state of non-compliance in the EC – Hormones dispute, it bears the burden of confirming
multilaterally that it has now complied in order to have the authorization terminated.
Q62. Do you agree with the view that (i) if an original complaining party initiates an
Article 21.5 dispute challenging the consistency of an implementing measure, that party shall
bear the burden to prove that the implementi ng measure is WTO-inconsistent during the
compliance procedure, and that (ii) if an original defending party initiates an Article 21.5
dispute claiming the WTO-consistency of its meas ure, that original defending party shall bear
the burden of establishing the consistency of it s implementing measure as a complaining party
to the Article 21.5 dispute? Please elaborate on your response.

47. Yes, Canada agrees with the statements in the question.
48. If the original responding party initiates the proceeding under DSU Article 21.5, it bears the
burden of demonstrating that its measure is comp liant with the recommendations and rulings of the
DSB. Since the objective of the proceeding under DSU Article 21.5 is to achieve conformity with all
provisions of the covered agreements, it would then be open to any other WTO Member that
participates in such proceedings to demonstrate that the measure at issue is not consistent with other
provisions of the covered agreements.
49. If the proceeding under DSU Article 21.5 is initia ted by the original complaining party, it
would bear the burden of demonstrating that the implementing measure is inconsistent with any
provisions in any of the covered agreements. It is established case law that panels acting under DSU
Article 21.5 may deal with all issues of consiste ncy of the measure concerned with the covered
agreements. The Appellate Body in Canada – Aircraft (Article 21.5 – Brazil) confirmed this.
6
Q63. Would the parties consider that the principle rebus sic stantibus , could apply to a
decision of the DSB (see, inter alia, para. 26 of Canada's oral presentation regarding the legal
status of DSB decisions)? In its oral comments on Canada's oral presentation, the EC stated
that there is no hierarchy in customary international law, the principle of good faith in this case,
and a treaty language, the DSB authorization in the current dispute. Could the parties provide
evidence that the EC statement is or is not supported by international jurisprudence?

50. Regardless of whether the principle of rebus sic stantibus ( i.e., fundamental change in
circumstances) applies to decisions of the DSB as a general matter, the conditions for it to be invoked
successfully in these circumstances are not present.

6 See Canada – Aircraft (Article 21.5 – Brazil), at para. 41. See also Australia – Measures Affecting the
Importation of Salmon – Recourse to Article 21.5 of the DSU by Canada , Report of the Panel, WT/DS18/RW,
adopted March 20, 2000; and European Communities – Regime for the Importation, Sale and Distribution of
Bananas – Recourse to Article 21.5 by Ecuador , Report of the Panel, WT/DS27/RW/ECU, adopted May 6,
1999.

51. The EC has not itself invoked the principle to argue that the DSB authorization is no longer in
effect. Moreover, even if the EC were to invoke the principle, it could not do so successfully. One of
the cumulative conditions codified in Article 62 of the Vienna Convention on the Law of Treaties is
that the circumstances that are said to have funda mentally changed must have been "unforeseen" at
the time the agreement was made (in this case, the adoption of the DSB authorization). At the time
WTO Members, acting through the DSB, authorized Canada to suspend concessions, it could hardly
be considered unforeseen that the EC would adopt a measure to comply with findings that it was in
breach of its obligations under the WTO. On the cont rary, the purpose of the authorization to suspend
concessions was precisely to induce the EC to a dopt such a measure. Therefore, far from being
unforeseen, it was expected that the EC would adopt an implementing measure.
52. With respect to the relationship between treaty law and customary international law, the EC
has initiated an unnecessary discussion of the hierarch y between sources of international law. The
point made by Canada on which the EC was co mmenting did not depend on resolving issues of
hierarchy between sources of international law. Ca nada has argued that its authorization from the
DSB to suspend concessions (specifically granted by treaty) prevails over any claim by the EC to a
presumption of compliance.
7 Canada does not argue that there is a conflict, the resolution of which
requires the Panel to determine a hierarchy. It is simply that a presumption of compliance does not
apply to the EC measure in these circumstances as a result of the DSB surveillance regime. See also
Canada's answer to question 61 above.
53. In any event, even if the Panel were to find th at there is a conflict between these principles in
these circumstances, it could resolve this conflict w ith reference to the specific principle of treaty
interpretation of lex specialis derogat legi generali , which provides that specific treaty rules ( i.e.,
those governing the DSB authorization) will prevail over general rules of customary international law
(i.e., those providing for a general presumption of compliance). 8 The relationship between the DSB
authorization and the EC's claim to a presumption of compliance could also be decided with reference
to specific provisions of the DSU. Articles 3.2 and 19.2 of the DSU both provide that panels cannot
add to or change the rights and obligations of WTO Members in the resolution of disputes. If the
Panel were to find in favour of the EC's argumen ts – by finding that the EC has satisfied the
conditions of Article 22.8 on the basis of this pr esumption – it would alter Canada's rights under the
DSU. Such a decision would alter Canada's rights not only by depriving Canada of the legal basis on
which its measure is based but, more importantly, would do so without having the issue of whether
the conditions of Article 22.8 have been satisfied confirmed by the DSB.
Q64. If the Panel were not able to reach a co nclusion on the first claim of the European
Communities under DSU Article 23, do you think the Panel should proceed to examine the
second claim of violation of Article 22.8 of the DSU?

54. Canada is not in a situation covered by Ar ticle 23 of the DSU because it is not seeking the
redress of an alleged WTO violation. Therefore, the examination by the Panel of the status of the DSB
authorization for the purposes of the EC's claims under Article 22.8 of the DSU remains the
fundamental issue to be determined in this dispute.
Q65. Canada and the United States have argued that the EC measure taken to comply with
the recommendations and rulings of the DSB in the Hormones case are incompatible with

7 For Canada's comments on the EC's efforts to confuse the "presumption of compliance" and the
"principle of good faith", see Canada's answer to question 61 from the Panel.
8 See, for example, Malcolm N. Shaw, International Law, 5th ed. (Cambridge: Cambridge University
Press, 2003), at 116 [Exhibit CDA-24]. See also EC Measures Concerning Meat and Meat Products
(Hormones), Report of the Appellate Body, WT/DS26/AB/R, WT/DS48/AB/R, adopted February 13, 1998, at
para. 124.

Article 5.1 and 5.7 of the SPS Agreement. Howe ver, the European Co mmunities does not make
any reference to these provisions, either in its requ est for establishment of the panel, or in its
first written submission. Do the parties believe th at the Panel has, nonetheless, jurisdiction to
review the compatibility of the EC implementing measure with Articles 3.3, 5.1 and 5.7 of the
SPS Agreement? On what legal basis should the Pa nel consider itself entitled/not entitled to
address the arguments of Canada and the United States in relation to the SPS Agreement?

55. The Panel has jurisdiction to review the consis tency of the EC's new measure with Articles
3.3, 5.1 and 5.7 of the SPS Agreement . The EC alleges that Canada has acted inconsistently with
Article 22.8 of the DSU by maintaining its suspen sion of concessions despite the EC's "removal" of
its offending measure. There is no presumption of compliance that operates in favour of the EC in this
case. In the alternative, if a presumption exists, th at presumption is rebuttable. In either case, the
Panel's determination that the EC has actually "removed" its offending measure (in other words, that it
has actually brought its measure into compliance w ith the recommendations and rulings of the DSB)
is a prerequisite
 to any finding that Canada has breached Article 22.8 of the DSU by maintaining its
suspension of concessions. Thus, because the recomme ndations and rulings of the DSB require that
the EC base its measure on a risk assessment as required by Articles 3.3 and 5.1 of the SPS
Agreement, the Panel has jurisdiction to examine the c onsistency of the EC's measure with these and
related provisions of the SPS Agreement.
56. As to the consistency of the EC's measure with Article 5.7 of the SPS Agreement, the EC is
claiming that it cannot perform a risk assessment on five of the six hormones in question because
there is insufficient scientific ev idence to do so. The EC thus bears the burden of justifying its
"provisional" measure on the basis of the exemption contained in Article 5.7 of the SPS Agreement.
Consequently, in the context of determining wh ether the EC's new measure complies with the
recommendations and rulings of the DSB, the Panel has jurisdiction to determine whether the EC is
able to justify its provisional measure on the basis of Article 5.7 of the SPS Agreement.
57. Finally, in the light of the EC's alternative ar gument in Part II of its First Written Submission,
in which it claims that its new measure is "fully compliant with the recommendations and rulings of
the DSB", this Panel has full jurisdiction to examin e the actual consistency of the EC's measure with
the relevant provisions of the SPS Agreement . In this regard, we draw the Panel's attention to
paragraphs 137 to 147 of the EC's First Written Submission, which set out its claims of compliance
with the recommendations and rulings of the DSB.
Q66. In this particular case, would it be for the European Communities to prove the
compatibility of its measure with Article 5.7 of the SPS Agreement because it applies certain
aspects of that measure provisionally or woul d it be for Canada and the United States to
demonstrate a violation of Article 5.7 because they consider that the EC measure is in breach of
that provision? Could the parties discuss the application of the burden of proof in relation to
Article 5.7 in light of the panels and Appellate Body findings with respect to that provision in
Japan – Agricultural Products II and Japan – Apples?

58. As the Appellate Body has explicitly noted in Japan – Agricultural Products II , Article 5.7
"operates as a qualified exemption from the obligation under Article 2.2 not to maintain SPS measures
without sufficient scientific evidence".
9 This means that Article 5.7 enables WTO Members, in
certain, limited circumstances, to adopt and maintain SPS measures despite the fact that they are not
supported by sufficient scientific evidence. Article 5.7 does not exist as an option that can be freely

9 See Japan – Measures Affecting Agricultural Products , Report of the Appellate Body,
WT/DS76/AB/R, adopted March 19, 1999, at para. 80 [emphasis in original] [ Japan – Agricultural Products
II].

chosen by the Member concerned in place of Article 2.2. It plays a role as a temporary "safety valve"
in situations where some eviden ce of a risk exists but not enough to complete a full risk assessment,
thus making it impossible to meet the more rigorous standards set by Articles 2.2 and 5.1.
59. In the present case, it is the EC that is alleging that there is insufficien t scientific evidence to
conduct an adequate risk assessment in respect of five of the six hormones at issue. Therefore, it is the
EC, as the WTO Member invoking Article 5.7 to jus tify its provisional measure, that bears the burden
of making a prima facie case in support of its position. For example, in Japan – Apples the panel
assigned the burden of proof to Japan to demonstrate that the four cumulative requirements of
Article 5.7 had been met.
10 In the present case, Canada has submitted evidence and arguments to
demonstrate that the EC has not met its burden and th at, in any event, it would be unable to meet this
burden.
Q67. Do the parties consider that Article 5.7 applies only when no risk assessment can be
made at all or also when scientific evidence exists but is insufficiently specific?

60. The Appellate Body in Japan – Apples found that "relevant scientific evidence" will be
"insufficient" when the scientif ic evidence available does not a llow, in quantitative or qualitative
terms, the performance of a risk assessment as required under Article 5.1 of the SPS Agreement .11
Consequently, Article 5.7 applies when "no risk assessm ent can be made at all" either because there is
simply not enough evidence to conduct a risk assessm ent, or when the evidence available is
insufficiently specific to conduct a risk assessment as defined in Annex A of the SPS Agreement.
Q68. Do all parties agree that the term "on th e basis" in Article 5.7 of the SPS Agreement has
the same meaning as "on the basis" in Article 5.1, i.e. that a "rational relationship" is required?

61. The requirement that a Member adopt a measu re "on the basis" of available pertinent
information under Article 5.7 is similar to the obligation under Article 5.1 that a Member's SPS
measure be "based on" a risk assessment. In other wo rds, in both instances there must be a "rational
relationship" between the measure at issue and, in the case of a measure adopted under Article 5.7, the
"available pertinent information" and, in the case of any other measure not captured by Article 3.2 of
the SPS Agreement , the risk assessment. This interpretation is consistent with the need for SPS
measures to be based on science as set out in Article 2.2 of the SPS Agreement.
Q69. During the EC – Hormones proceedings, the European Communities was of the view
that "the scientific evidence concerning the need to regulate the use of hormones was in itself
sufficient to justify its legislation and the Eu ropean Communities did not need to rely on the
exception provided for in Article 5.7 concern ing cases where relevant scientific evidence was
insufficient" (DS26/R/USA, para.4.239). Does this mean that "the evidence concerning the need
to regulate the use of hormones generally" is di fferent from the specific evidence concerning the
health risk associated with the administration of hormones in animals for growth promotion
purpose? Is there sufficient evidence concerning the latter?

62. There is a difference in "the evidence concer ning the need to regulate the use of hormones
generally" in veterinary medicine and the specific evidence concerning the health risk associated with
the administration of hormones in animals for grow th-promotion purposes. In particular, the exposure
data needed to evaluate hormones used for growth -promotion purposes would have to be use specific.
Canada considers that a "risk assessment" of a veterinary drug is designed to address a specific use of

10 See Japan – Measures Affecting the Importation of Apples, Report of the Panel, WT/DS245/R, adopted
December 10, 2003, at para. 8.212.
11 See Japan – Measures Affecting the Importation of Apples , Report of the Appellate Body,
WT/DS245/AB/R, adopted December 10, 2003, at para. 179.

the drug. Therefore, in the case of use of these hormones for growth-promotion purposes, the
hormone residue data used to estimate the dietar y hormone intake from growth-promotion use would
need to be generated specifically, as would the r esidue data from the use of these hormones for any
therapeutic purpose. In this case, there is sufficient scientific evid ence to conduct a risk assessment in
respect of all six hormonal growth promotants in question. This conclusion is supported by regulatory
decisions in many countries and by the fact that JECFA has allocated ADIs (acceptable daily intake)
for all six hormones at issue.
Q70. Having regard to the statement of the United States in paragraphs. 151-152 of the first
US written submission, the Panel notes that Article 5.7 of the SPS Agreement talks about
"available pertinent information" on the health ri sk. In the parties' views, does this mean that
the "available pertinent information" under th e circumstances of the current disputes refer to
the information on risks associated with the co nsumption of meat from animals treated with
hormones for growth promotion purposes accordin g to good veterinary practice? Or, does it
refer to the risk of the five hormones to human health generally?

63. The "available pertinent information" on oestradiol 17 β and the other five hormones is
adequate to conduct a risk assessment on the use of oestradiol 17 β and the other five hormones when
used for growth promotion according to good veterina ry practices. However, the use of any of these
hormones for purposes other than growth promoti on (according to good veterinary practices) would
require specific risk assessments and the "available pertinent information" would have to be assessed
as such.
Q71. Article 5.7 of the SPS Agreement requires that a Member review the measure within a
reasonable period of time. In the parties' view, how long should this reasonable period of time
be in this case? At which point of time should the calculation of the reasonable period of time
start? Has the European Communities conducted su ch a review after the adoption of Directive
2003/74/EC in September 2003? What is the plan of the European Communities to conduct such
review?

64. With regard to the requirement under the second sentence of Article 5.7 of the SPS Agreement
that a Member review its provisional measure within a reasonable period of time, the Appellate Body
in Japan – Agricultural Products II found that the reasonable period of time should be assessed on a
case-by-case basis and depends on (1) the speci fic circumstances of each case and (2) the
characteristics of the SPS measure at issue.
12 In the case of a total import ban like the one currently
facing Canada and the United States, which has the most trade-distorting effect possible, the
reasonable period of time should not be construed so as to prolong unnecessarily the trade impact of
the provisional measure. The second sentence of Article 5.7 imposes a stringent burden on Members
to make active and ongoing efforts to gather and review additional information necessary for a risk
assessment. Consequently, from the moment that th e measure is adopted, the Member should be
acting with diligence to fulfill this substantive requirement of Article 5.7 of the SPS Agreement.
Q72. Please explain what you understand to be the relationship between Article 3.1 and
Article 5.7 of the SPS Agreement?

65. Consistent with the goal of the SPS Agreement to harmonize SPS measures, Article 3.1 sets
out the basic obligation of Members to base th eir measures on international standards except as
otherwise provided for in the Agreement. In a case where a Member wishes to introduce a measure
with a higher level of SPS protection than that of th e relevant international standard, it must do so on
the basis of a risk assessment. Article 5.7 allows Members to adopt provisional measures in a situation

12 See Japan – Agricultural Products II, at para. 93.

where there is insufficient scientif ic evidence to conduct such a ri sk assessment. However, it does not
give Members carte blanche in this area. The provisional measure must be based on "available
pertinent information", including that from relevant international organizations and measures of other
WTO Members. Where a relevant international or ganization has adopted standards on a particular
SPS issue, it makes it extremely difficult for a Member to argue that there is insufficient scientific
evidence to conduct a risk assessment, because the existence of an intern ational standard implies that
sufficient scientific evidence exists to complete a risk assessment. The burden rests with the EC in this
case to demonstrate that, despite the adoption of international standards by Codex regarding the
hormones at issue, the scientific evidence is insufficient to allow it to conduct a risk assessment.
Q73. Do you consider it possible that scientifi c evidence may be judged to be sufficient to
undertake a risk assessment at a particular point in time, and yet considered to be insufficient
for the same purpose several years later? Does the fact that a significant number of scientific
studies have been undertaken with regard to these potential risks in the intervening years have
any relevance for your response? Does the existe nce of international standards have any
relevance? Please explain?

66. Yes, it is theoretically possible that scientific evidence judged to be sufficient to undertake a
risk assessment at a particular point in time may be considered to be insufficient to conduct a risk
assessment for the same purpose several years later. For ex ample, this could be due to a change in the
basic understanding of a biological event that is triggered by the chemical under assessment, new
scientific data that identify new adverse effects or adverse effects at lower exposure levels. New
sources of exposure could also trigger the need to reassess the adequacy of the risk assessment.
67. It would not be the number of scientific studies conducted in the intervening years that would
determine whether a new risk assessment was necessary but rather the nature of the studies. For
example, if new residue studies ( i.e., an analysis of the chemical and significant metabolites in food)
were carried out then this would require minimally an exposure reassessment and possibly a risk
characterization reassessment. If studies addressed biological endpoints that had not been previously
addressed ( e.g., the immune system), used new study protocols or more sensitive methodologies, a
new hazard identification assessment would be in order.
68. Furthermore, it would be essential to take intern ational standards into consideration. More
important than the numerical standard is the basi s, support or risk assessment for that international
standard. For example, it is recognized that JE CFA only allocates an ADI for a food additive or
veterinary drug under review when JECFA considers th at its scientific data base is complete and that
there are no outstanding scientific issues.
Q74. Assuming the Panel deems it necessa ry to determine whether the European
Communities revised measure co mplies with certain provisions of the SPS Agreement, do the
parties consider that the consultation of scienti fic experts would be necessary or only useful?
What would be the issues on which experts should be consulted? To the extent feasible, should
the Panel consult the experts consulted in the EC – Hormones case?

69. If the Panel deems it necessary to consider whet her the EC's revised measure complies with
the SPS Agreement, the complexity of the issues in this case would require consultation with scientific
experts. Were the Panel to so decide, those experts should be consulted as to (1) whether the Opinions
and/or studies relied on by the EC constitute th e necessary risk assessment id entifying the risks to
consumers that flow from the ingestion of meat from animals treated with oestradiol 17 β; (2) whether
there is sufficient scientific eviden ce regarding the other five hormonal growth promotants at issue to
enable the EC to conduct a risk assessment; and (3) whether current scientific knowledge warrants the
EC's ongoing ban regarding the six hormonal growth promotants.

70. If the Panel decides to consult experts, those experts who advised the panel in the original
EC – Hormones case should be among the candidates. However, Canada may wish to propose several
other recognized experts as candidates.

ANNEX B–3

REPLIES OF CANADA TO QUESTIONS POSED
BY THE EUROPEAN COMMUNITIES
AFTER THE FIRST SUBSTANTIVE MEETING

(3 October 2005)

Questions to the United States and Canada

Q1. According to the United States and Canada the continued suspension of concessions and
related obligations is based on the original DSB authorization and not on the (alleged) WTO-
inconsistency of the EC's compliance measure. Does this mean that the United States and
Canada claim a right to continue the applicatio n of sanctions even if the EC measure is WTO-
consistent as long as the DSB authorization has not been formally withdrawn?

1. Canada would not claim a right to suspend concessions in circumstances where there has been
multilateral confirmation that a measure taken to comply with recommendations and rulings of the
DSB actually does comply. Multilateral confirmation of this compliance would come in the form of
the adoption by the DSB of findings and recommenda tions of a WTO dispute settlement panel and/or
the Appellate Body. The adoption of such findings by the DSB would at the same time be sufficient to
constitute revocation of the DSB authorization, whether implicit or explicit.

Q2. You argue that the DSB authorization to suspend concessions can only be revoked
following a multilateral determination of complia nce of the EC's implementing measure. You
suggest that this could be achieved, inter alia, through an Article 21.5 procedure initiated by the
European Communities. In such a case would th e European Communities be the "complaining
party" within the meaning of Article 6? Who would be the "defending party"? What would be
"the specific measures at issue"? What would be the legal basis for the "complaint"? What
would the European Communities be complaining against?

2. See Canada's answer to questions 45 and 62 from the Panel .

Q3. Would the United States and Canada participate in a self-initiated Article 21.5
proceeding, such a proceeding? If yes, would they do so because of a legal obligation?

3. Yes. Regardless of whether there is a legal ob ligation to participate, it would be in Canada's
interest to participate if the EC initiated a pr oceeding under DSU Article 21.5 to obtain confirmation
of the compliance of its measure with the recommendations and rulings of the DSB in EC –
Hormones.

Q4. What would be the terms of reference of a self-initiated Article 21.5 proceeding? Would
the European Communities be required to anticipa te any possible claims by the United States
and Canada? Could the United States and Canada raise new claims outside the legal basis for
the "EC complaints"? If yes, how could this be squared with the terms of reference?

4. See Canada's answers to questions 45 and 62 from the Panel.

Q5. In the oral hearing, Canada submitted that under an Article 21.5 proceeding it would
not only be possible to review the compliance measure but also the legality of the continued
application of the sanctions? According to Canada, is the continued application of the

suspension of obligations therefore a measure which can be reviewed under Article 21.5? What
are the US' views on this suggestion?

5. No, the measure suspending concessions per se would not be reviewed by an Article 21.5
panel. However, if a panel established under Article 21.5 confirmed the compliance of an
implementing measure, it could recommend that the DSB authorization be terminated. See Canada's
answer to question 7 below.

Q6. In the oral hearing, the United States ar gued that there is no "disagreement" between
the United States and the European Communiti es as to the WTO-consistency of the new
compliance measure. If this is correct, how co uld the European Communities self-initiate an
Article 21.5 proceeding as suggested by the United States?

Q7. Assuming that a proceeding under Article 21. 5 comes to the conclusion that the EC's
compliance measure is WTO-consistent. How woul d this lead to a withdrawal of the DSB
authorization? What would be the legal basis for the DSB to "withdraw" the authorization, and
what decision-making mechanism would apply for that DSB action.

6. A finding in a proceeding under Article 21.5 that a measure taken by the EC to comply is
WTO consistent would lead to a withdrawal of th e DSB authorization by the adoption by the DSB of
the panel's findings confirming compliance. See Canada's answer to question 55 from the Panel.

7. Although Canada does not see it as necessary, if the EC were concerned about the effect of
such findings on the ongoing validity of the DSB author ization, it could also cite Article 22.8 of the
DSU in its request for the establishment of the panel under Article 21.5. There would then be no
doubt as to whether the panel could make recommendations that the DSB authorization is no longer in
effect. See also Canada's answer to question 8 below.

Q8. Canada argued in its First Written Submission that as the outcome of a new proceeding
"the result would be a recommendation to the DSB to terminate the DSB authorization"
(para. 47)? How can this statement be reconciled with Article 19 DSU whereby the Panel or
Appellate Body only issues recommendations to the "Member concerned" but not to the DSB?
What does the United States think?

8. Article 19 of the DSU simply sets out what panels shall do with respect to recommendations
to Members to bring themselves into compliance. Nothing in that provision prevents panels from
recommending to the DSB that the authorization be terminated.

Q9. How is the theory of the "withdrawal of the DSB authorization" in line with the text of
Article 22.8, first sentence, of the DSU, and what is the need for it in the light of that provision?

9. The formal "withdrawal of the DSB authorization" is not required by the dispute surveillance
regime set up by the DSU. Rather, it is the confirmation by the DSB of the EC's compliance that is
required for the DSB authorization no longer to be available to Canada. See Canada's answer to
question 55 from the Panel.

Q10. Is it Canada' opinion that the DSB authorization which it received in the Brazil –
Aircraft case (WT/DS46) is (implicitly?) revoked after the Panel under the second Article 21.5
proceeding found that Brazil' compliance measure was WTO-consistent? What are the United
States' views on this issue?

10. The premise of the EC's question is in error.

11. Although the panel ruled, in Brazil – Aircraft (Article 21.5 – Canada II), that Brazil's program
PROEX III as such was not inconsistent with the SCM Agreement ,
1 PROEX III did not withdraw
PROEX I and PROEX II, nor any subsidies issued under these programs. PROEX I and PROEX II
were programs that had previously been found inconsistent with the SCM Agreement. Thus there is no
basis for any suggestion on the part of the EC that Canada's authorization to suspend concessions to
Brazil was implicitly terminated.

Q11. Canada argues that it has not violated Ar ticle 21.5 because the EC's could have initiated
a compliance Panel itself (para. 76). Could Canada please explain how such a possibility for the
European Communities affects Canada's obligations under Article 23.1 and 21.5 of the DSU?

12. The EC mischaracterizes Canada's arguments in paragraph 76. Canada's argument that it has
not violated Article 21.5 does not depend upon the fact that the EC could have initiated proceedings
under Article 21.5.

Q12. According to the United States and Canada the continued imposition of sanctions is
justified because of the DSB authorization. A ssuming the European Communities would try to
seek a revocation of the DSB authorization based on a new case under Article 22.8, how could
such a proceeding result in a Panel finding that the sanctions are illegal (implying according to
the United States and Canada that the DSB author ization would end) if at the same time the
Panel accepts the US' and Canada's theory that due to the DSB authorization the sanctions are
per se WTO consistent?

13. Proceedings under Article 22.8 of the DSU would, as Canada argues these proceedings
should, include as an initial issue the confirma tion of the compliance of the underlying measure
claimed to have been removed, prior to any fi nding on the ongoing authorization of the suspension of
concessions. If a panel confirms the actual compliance of the measure taken to comply, it would make
recommendations that the DSB authorization s hould be terminated and, further, make
recommendations that Canada remove its suspen sion of concessions. See Canada's answer to
question 55 from the Panel.

Q13. The United States and Canada accept that the purpose of suspension of concessions is to
rebalance the rights and obligations of WTO Me mbers and/or to induce compliance. Therefore,
would the United States and Canada agree that the purpose of the current continuation of the
suspension of concessions is also to rebalan ce rights and obligations and/or to induce
compliance?

14. In the absence of a mutually satisfactory ag reement or of multilateral confirmation that the
EC's measure now complies with the recommendations and rulings in EC – Hormones, and thus has
been "removed" within the meaning of DSU Article 22.8, the suspension of concessions continues to
serve the purpose(s) for which the authorization to suspend concessions was originally granted by the
DSB to Canada.

Q14. In its First Written Submission, Canada states that the European Communities is still
today under an ongoing obligation to comply despite its implementing measure (para. 40). Does
the United States agree? If the European Communi ties are still under an obligation to comply is
it correct to assume that the United States a nd Canada consider the EC's compliance measure
as WTO-inconsistent?

1 Brazil – Export Financing Programme for Aircraft: Second Recourse by Canada to Article 21.5 of
the DSU, Report of the Panel, WT/DS46/RW2, adopted August 23, 2001, at para. 6.1.

15. The fact that the EC has adopted a measure that it alleges complies with the recommendations
and rulings of the DSB in the EC – Hormones dispute is not, in and of itself, determinative of the
actual compliance of that measure. If the EC wishes to have Canada's DSB authorization terminated,
it must do more than simply adopt a new measure and then assert compliance. In the absence of a
mutually satisfactory solution, the EC must obtain multilateral confirmation that its measure complies
with the recommendations and rulings of the DSB in EC – Hormones.

Q15. How does such a conclusion affect the US ' and Canada's allegation that they have not
yet made a "determination" as to the WTO-inconsistency of the EC's compliance measure?

16. See Canada's answer to question 57 from the Panel. See also Canada's answers to
questions 43, 44 and 48 from the Panel.

Q16. Do Canada and the United States consid er that it is at all possible to make a
"determination" in the present situation given th at they are acting under a DSB authorization?
If you do, could you give an example of what would constitute a "determination" in your view?

17. Canada's continued reliance on the DSB author ization for its suspension of concessions to the
EC is not a "determination" regarding the EC's new measure within the meaning of Article 23.2(a) of
the DSU. See Canada's answer to question 57 fro m the Panel. See also Canada's answers to
questions 43, 44 and 48 from the Panel.

Q17. What is a reasonable timeframe for develo ping a view on the WTO-consistency of the
EC's compliance measure in the present case in the light of the continued application of
sanctions against the European Communities?

18. In the absence of a mutually satisfactory soluti on, it is in the discretion of the EC, if it wishes
to have the DSB's authorization to suspend concessions terminated, to obtain multilateral confirmation
of the compliance of its new measure with the recommendations and rulings of the DSB.

Q18. In its First Written Submission Canada ref ers to an "[abuse of] its right to implement"
in case of a scam measure (para. 45) Is it Canada's view that the EC's compliance act is a "scam
measure"? What is the US' view?

19. Canada has not argued that the EC measure is a "scam measure". In fact, the issue is not
whether the EC measure is a "scam measure"; the i ssue is whether the EC measure complies with the
recommendations and rulings in EC – Hormones.

Q19. What is the textual basis in the WTO Ag reement for a reversal of the burden of proof in
a "post-implementation" scenario (Canada's First Written Submission, paras. 56 to 58), and
how does this theory of the reversal of the burde n of proof fit with the WTO jurisprudence?
Does the United States agree with Canada's theory?

20. Paragraphs 56 to 58 of Ca nada's First Written Submission do not present a theory of the
reversal of the burden of proof. In those paragraphs , Canada argues that the EC is not entitled to rely
on a presumption of compliance such that it has au tomatically satisfied one of the conditions of
Article 22.8 of the DSU. As a result of the sp ecific authorization of Canada's suspension of
concessions, and in the light of the EC's obligati on to comply with the recommendations and rulings
in EC – Hormones , the EC now bears the burden of demonstr ating that it has done so. See Canada's
answer to question 61 from the Panel.

Q20. During the Oral hearing the United Stat es submitted that the EC's approach in the FSC-
case was "appropriate". Why does the United St ates believe that the same approach is not

"appropriate" in the present case where the United States is continuing sanctions despite an
EC's compliance measure?