Document: WT/DS291/R/Add.4 WT/DS292/R/Add.4 WT/DS293/R/Add.4 Page F-1 ANNEX F REPLIES BY THE PARTIES TO QUESTIONS POSED BY THE PANEL IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING AND COMMENTS BY THE PARTIES ON THE OTHER PARTIES' REPLIES Contents Page
Date: 7 March 2005
Document codes: WT/DS291/R/Add.4; WT/DS292/R/Add.4; WT/DS293/R/Add.4
Complainant: Argentina
Respondent: EU
Third parties: Australia, Brazil, Canada, Chile, China, Taiwan, Colombia, El Salvador, Honduras, Mexico, New Zealand, Norway, Paraguay, Peru, Thailand, Uruguay, U.S.
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 2.2, 2.3, 5.1, 5.2, 5.5, 5.6, 7, 8, 10.1, Annex B, Annex C  Sanitary and Phytosanitary Measures (SPS)Art. III:4, X:1, X:3(a), XI:1  GATT 1994Art. 2.1, 2.2, 2.8, 2.9, 2.11, 5.1, 5.2, 5.6, 5.8, 12  Technical Barriers to Trade (TBT)Art. 4.2  AgricultureArt. I:1  GATT 1994

ANNEX F

REPLIES BY THE PARTIES TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING
AND COMMENTS BY THE PARTIES ON THE OTHER PARTIES' REPLIES

Contents Page
Annex F-1 Replies by the United States to questions posed by the Panel in the
context of the second substantive meeting (7 March 2005)
F-2
Annex F-2 Replies by the United States to additional questions posed by the
Panel in the context of the second substantive meeting
(11 March 2005)
F-26
Annex F-3 Comments by the United States on the replies of the European
Communities to questions posed by the Panel in the context of the
second substantive meeting (18 March 2005)
F-44
Annex F-4 Replies by Canada to questions posed by the Panel in the context of
the second substantive meeting (7 March 2005)
F-56
Annex F-5 Replies by Canada to additiona l questions posed by the Panel in the
context of the second substantive meeting (11 March 2005)
F-72
Annex F-6 Comments by Canada on the re plies of other parties to questions
posed by the Panel in the context of the second substantive meeting
(18 March 2005)
F-93
Annex F-7 Replies by Argentina to questions posed by the Panel in the context
of the second substantive meeting (7 March 2005)
F-110
Annex F-8 Replies by Argentina to add itional questions posed by the Panel in
the context of the second substantive meeting (11 March 2005)
F-117
Annex F-9 Replies by the European Communities to questions posed by the
Panel in the context of the second substantive meeting
(7 March 2005)
F-123
Annex F-10 Replies by the European Co mmunities to additional questions posed
by the Panel in the context of the second substantive meeting
(11 March 2005)
F-154
Annex F-11 Comments by the European Communities on the replies by the
complainants to questions posed by the Panel in the context of the
second substantive meeting (18 March 2005)
F-174

ANNEX F-1

REPLIES BY THE UNITED STATES TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING
7 MARCH 2005

For all parties

119. With reference to exhibit US-123 (reproduced at para. 9 of attachment II of the US
rebuttal), do the references in ISPM 11 to "indirectly affect plants ... by other processes such as
competition" (page 34) and "significant reduction , displacement, or elimination of other plant
species" (page 19) support the view that the term "injurious" in the IPPC definition of "pest"
("any species, strain or biotype of plant, animal, or pathogenic agent, injurious to plants or plant
products") should be given a broad interpretation?

1. The cited language makes clear that the definiti on is to be interpreted to include all reasonably
foreseeable injuries that an organism might cause to plant life or health. Also relevant in this regard is
the discussion in Annex 1 of ISPM 11, which explicitly provides that the scope of the IPPC also
extends to those injuries caused by organisms that indirectly affect plant species or health, through
effects on other organisms in the ecosystem. The di scussion in Annex I thus directly contradicts many
of the artificial distinctions the EC has previously suggested.

120. With reference to Annex A(1)(d) of th e SPS Agreement, please an swer the following
questions:

 (a) What is the meaning of the term "other damage"?

 (b) Does the term "other" imply that A nnex A(1)(a) through (c) are also about
"damage"? If so, does the term "other damage" cover damage sustained by
plants, animals or humans other than damage to their "life or health"? Please
provide examples.

 (c) Is "other damage" limited to damage sustained by plants, animals or humans? If
not, please provide examples.

2. Subpart (a): The meaning of the term "other damage" in Annex A(1)(d) is indicated by its
context: in particular, the meaning of this term is i ndicated by the fact that the term "other damage" is
used at the end of a list in Annex A(1) of different types of risks of damage "arising from the entry,
establishment, or spread of pests." Paragra ph A(1)(a) specifies that the SPS Agreement addresses
damage to "animal or plant life or health" arising from the "entry, establishment or spread of pests,"
and Paragraph A(1)(c) specifies that the SPS Agreem ent addresses damage to "human life or health"
arising from the "entry, establishment or spread of p ests." Thus, in context, the term "other damage"
must mean damage other than damage to "animal or plant life or health" or "human life or health."

3. Subpart (b) and (c): As discussed in the answer to subpart (a) above, the use of the term
"other" in Annex A(1)(d) does imply that Annex A( 1)(a) through (c) are also about "damage," and the
term "other damage" should be construed to address damage other than damage to the life and health of
plants, animals or humans. The damage could, but would not necessarily, be to plants, animals or
humans, and could include, for example, property damage from pests. Nothing in the phrase "other

damage" limits that term to property damage, and nothing in this phrase excludes non-life or non-
health damage to plants, animals or humans caused by pests.

4. With regard to examples, during the ne gotiation of the SPS Agreement an oft-discussed
example was damage to property arising from the entry, establishment or spread of termites.
121. With reference to Article 5.1 of the SPS Agreement, what were the relevant risk
assessment techniques developed by the relevant in ternational organizations that the European
Communities had to take into account in the relevant period (October 1998 - August 2003)?

5. As indicated in Annex A(3) of the SPS Agre ement, the Codex is a relevant international
organization with respect to food safety, and the International Plant Protection Convention (IPPC) is a
relevant international organizati on with respect to plant health. The following Codex and IPPC
documents set out the relevant risk assessment techniques for the period in question:

 Codex standards:

 (1) Working Principles for Risk Analysis for Application in the Framework of the Codex
Alimentarius, Section III, Codex Procedural Manual, 14th edition.

 (2) CAC/GL 44 2003 Principles for the Risk Analysis of Foods Derived from Modern
Biotechnology

 (3) CAC/GL 45 2003 Guideline for the Conduct of Food Safety Assessment of Foods
Derived from Recombinant-DNA Plants

 IPPC Standards:

 (4) ISPM # 02: 1996: Guidelines for pest risk analysis

 (5) ISPM # 06: 1997: Guidelines for surveillance

 (6) ISPM # 11 Rev. 1 (2003): Pest Risk Analysis for quarantine pests including analysis
of environmental risks.

122. Please explain your views as to the relationship between a Member's appropriate level of
protection and the requirement in Article 5.1 to en sure a measure is based on a risk assessment,
as appropriate to the circumstances. Is the a ppropriate level of protection relevant to the
conduct of the risk assessment?

6. The SPS Agreement indicates that the "appropriate level of protection" and "risk assessment"
are distinct concepts. Annex A defines a "risk assessment" as an "evaluation" of particular risks. Once
conducted, the risk assessment – that is, the evaluation of certain risks – is then used to decide whether
to impose a measure because otherwise the risk w ould be greater than th e appropriate level of
protection.

7. The distinction between the "appropriate le vel of protection" and "risk assessment" are
reinforced by Articles 5.2 and 5.3 of the SPS Agreemen t. These articles specify at length the factors to
be taken into account in conducting a risk assessment:

"5.2. In the assessment of ri sks, Members shall take into account available scientific
evidence; relevant processes and production methods; relevant inspection, sampling
and testing methods; prevalence of specific diseases or pests; existence of pest- or
disease-free areas; relevant ecological and environmental conditions; and quarantine or
other treatment."
"5.3. In assessing the risk to animal or plant life or health and determining the
measure to be applied for achieving the appr opriate level of sanitary or phytosanitary
protection from such risk, Members shall take into account as relevant economic
factors: the potential damage in terms of lo ss of production or sales in the event of the
entry, establishment or spread of a pest or disease; the costs of control or eradication
in the territory of the importing Member ; and the relative cost-effectiveness of
alternative approaches to limiting risks."
Notably, neither of these articles provides that the "appropriate level of protection" is one such factor to
be taken into account in conducting a risk assessmen t. Rather, as indicated in Article 5.3, the
"appropriate level of protection" is distinct from risk assessment, and that level is used to "determin[e]
the measure to be applied for achieving the appropria te level of sanitary or phytosanitary protection
from such risk.

123. Please assume for the sake of argument that Article 5.7 of the SPS Agreement provides
for an exception in the nature of an affirmative defence:

 (a) Could the Panel assess the merits of an y such defence without having previously
found an inconsistency with Article 2.2 of the SPS Agreement?

 (b) If not, in a case such as this one where a claim of inconsistency with Article 2.2 of
the SPS Agreement is based on a claim of inconsistency with Article 5.1 of the
SPS Agreement, would it be correct for the Panel to begin its analysis with the
Article 5.1 claim, then move to the consequential Article 2.2 claim and finally
turn to the Article 5.7 defence?

8. Subpart (a). As a general matter, it is possible to examine the validity of an affirmative
defense under the WTO Agreement without first findi ng a substantive violation of a WTO obligation.
If the EC is willing to simply concede that its meas ure is not based on a risk assessment and would be
inconsistent with Article 2.2 excep t for Article 5.7, then the Panel could find a breach of Articles 2.2
and 5.1 and proceed directly to an examinati on under Article 5.7. However, unless the EC so
concedes, it would not be practical to address Article 5.7 without first addressing the inconsistency of
the EC's measures with Articles 2.2 and 5.1 of the SP S Agreement. Furthermore, Articles 2.2, 5.1, and
5.7 are closely interrelated, so an analysis under Article 5.7 would necessarily involve an examination
of many of the same underlying issues as an analysis under Articles 2.2 and 5.1. Specifically, since
Article 5.7 only applies where there is insuffici ent evidence to conduct a ri sk assessment, and where
the Member has sought to obtain additional inform ation necessary for a risk assessment within a
reasonable period of time, the Panel would in any event have to analyze the sufficiency of any
purported risk assessment or steps to complete one (which would seem to require an analysis under
Article 5.1) before being able to make a finding under Article 5.7. In addition, in prior disputes
involving Article 5.7 of the SPS Agreement, panels and the Appellate Body have examined Articles
2.2 and 5.1 before turning to Article 5.7.
1

1 See Japan – Apples , AB-2003-4, Part V, and Japan-Agricultural Products, AB-1998-8, Parts VII and
VIII.

9. Subpart (b). For the above reasons, the United States agrees that the most efficient way to
organize an analysis of the EC measures vis a vis a possible Article 5.7 defense would be to begin the
analysis with the Article 5.1 claim, then move to th e consequential Article 2.2 claim and finally turn to
the Article 5.7 defence.
For all complaining parties

124. With reference to para. 19 of the European Communities supplementary rebuttal, do the
complaining parties agree that the Panel "is not asked to determine whether a prudent
government, in the abstract, should have behaved or not in a certain manner thus causing delay.
It merely needs to find whether, in the concrete case and in light of the factual information and
the legal arguments before the relevant authorities, that behaviour which in the end caused a
delay could justifiably have been adopted"?

10. The United States does not agree with the EC's formulation of the pertinent question before the
Panel with regard to findings relate d to the issue of "undue delay" under Annex C. In particular, the
above-cited language from the EC supplem entary rebuttal is addressed to the standard of review to be
adopted by the Panel in examining whether certain delays were "undue," and the EC appears to be
arguing that such standard must involve some sort of special deference or that the Panel needs to put
itself into the position of the "relevant authorities" and second-guess the courses action available at a
given point in time.

11. With respect to deference, in the EC-Hormones dispute, the Appellate Body addressed the
standard of review to be used in examining meas ures under the SPS Agreement. In that case, like in
the present case, the EC was arguing that a special st andard of review had to be adopted for purposes
of applying the SPS Agreement. The Appellate Bo dy rejected the EC argument, and set out the
following standard of review:

So far as fact-finding by panels is concerned, their activities are always constrained by
the mandate of Article 11 of the DSU: th e applicable standard is neither de novo
review as such, nor "total deference", but rather the "objective assessment of the facts".
Many panels have in the past refused to undertake de novo review, wisely, since under
current practice and systems, they are in any case poorly suited to engage in such a
review. On the other hand, "total deference to the findings of the national authorities",
it has been well said, "could not ensure an 'objective assessment' as foreseen by Article
11 of the DSU".
2
12. The United States submits that in applying the disciplines of the SPS Agreement, the Panel
should cite to and employ the above standard of review applied by the Appellate Body. The EC has
not provided any basis for the Panel to adopt any di fferent standard of review for the purposes of this
case.

13. With respect to "second-guessing," the question is whether there was any "delay" and if so was
it "undue." It is not a question of having to recons truct what relevant authorities "could" have been
thinking at any particular point in time.

2 EC – Hormones, para. 117.

125. The European Communities' opening statemen t at the Panel's meeting with the experts
includes the following statements:

"The European Communities' approach is to seek more evidence to establish
whether or not there is a risk … in order to make a definitive decision on the
basis of full information - even if that takes a little more time". (para. 19)
"The European Communities reacts to uncertainty as to the appropriate risk
management strategies by saying 'let's take our time and reduce the uncertainty".
(para. 17)
Do the complaining parties consider that it would be consistent with Annex C(1)(a) of the SPS
Agreement to delay making a definitive deci sion based on the approach outlined by the
European Communities? In answering this questio n, please take into account the provisions of
Article 2.2 of the SPS Agreement and Article 5. 7 of the SPS Agreement (adoption of provisional
measures based on available pertinent information).

14. The above statements by the EC are so vague and general that is not possible to analyze
precisely how those statements might apply to the facts of this case or to the relevant disciplines set out
in the SPS Agreement. However, the United Stat es disagrees with the tenor of the EC comments on
several levels.

15. First, the above statements by the EC imply th at this dispute simply involves decisions by the
EC to "take a little more time." But that character ization fundamentally misstates the key issue in this
case : namely, that the EC adopted an across-the-board moratorium on all biotech products for a
period of five years, and applied that moratorium regardless of the particular facts and circumstances of
particular product applications.

16. Second, as the United States highlighted in its oral statement at the second panel meeting, the
Panel must reject the EC's suggestion that all an alyses under the SPS Agreement must be seen in the
light of "uncertainty." In fact, the responding party in the Apples case similarly relied on a general
theme of uncertainty, and the Appellate Body firmly rejected it:

The application of Article 5.7 is triggered not by the existence of scientific uncertainty,
but rather by the insufficiency of scientific ev idence. The text of Article 5.7 is clear:
it refers to "cases where relevant scientific evidence is insufficient", not to "scientific
uncertainty". The two concepts are not inte rchangeable. Therefore, we are unable to
endorse Japan's approach of interpreting Artic le 5.7 through the prism of "scientific
uncertainty".
3
17. Third, to the extent the Pane l decides to examine individual in stances of delay in the histories
of particular product applications, the issue is whethe r or not the delay is "undue," based on the facts
and circumstances of that particular application, and taking account of the fundamental fact that the EC
adopted and applied an across-the-board moratorium. The broad generalizations set out by the EC are
neither accurate, nor helpful in the analysis of particular delays. What is much more relevant is that for
many products, the lead competent authorities and re levant EC scientific committees determined that
sufficient evidence was available, conducted risk assessments, and determined that the products are
safe. The scientists on these committees did not co nsider additional eviden ce was necessary - indeed

3 Appellate Body Report, Japan – Measures Affecting the Importation of Apples , WT/DS245/AB/R,
adopted 10 December 2003, para. 184.

they rejected the member States' claims of uncertainty. It was th e EC regulatory bodies who declined
to act on the scientific assessments that had already been conducted.

18. Fourth, the EC statements could be read as supporting a view that a WTO Member may delay
consideration of applications inde finitely while the Member searches for purely theoretical risks. As
the United States explained at the second substantiv e meeting, the SPS Agreement cannot be construed
to allow Members to put impossible burdens on app licants to prove the negative – for example, to
prove that there are no adverse impacts on any and a ll, unspecified, aspects of the environment. Such
types of questions necessarily result in endless dela y, which in turn must be considered "undue."
Otherwise, a WTO Member could block all product a pprovals, indefinitely, by posing such vague and
general questions.

19. Fifth, the United States considers that Article 5.7 could be relevant context to be examined in
deciding how to apply the "undue delay" provision of Annex C. For example, delaying consideration
of applications until the applicant responds to im possibly vague questions on theoretical risks would
have an effect similar to the adoption of a ban on a product. Such a ban would not likely be consistent
with Article 5.7 because it could not be based on "a vailable pertinent information" where any risks
raised by the Member were vague and purely hypothetical. In addition, in this example, there would be
no way for the Member to seek to obtain the add itional information necessary for a risk assessment
within a reasonable period of time because the Member had not even identified the particular risks that
needed further examination.

20. Finally, the very nature of science is that there will always
 be the potential for more evidence,
there can never be an absolute certainty as to the l ack of "a" risk, and information is never "full".
Accordingly, the EC's approach would mean that a Member could always delay indefinitely any
approval while awaiting "more" evidence and "full" information. The United States also cannot help
but be struck by the contradiction between the EC's statements in paragraphs 17 and 19. On the one
hand, in paragraph 17, the EC presumes there is a risk when it refers to "appropriate risk management
strategies." On the other hand, the EC in paragraph 19 is still trying to determine if there is a risk.

126. In paragraph 10 of the EC Responses to th e Questions from the Panel (16 June 2004), the
European Communities compares the definiti ons of risk assessment as used in the SPS
Agreement and as used in Codex, and concludes th at "It is clear that the SPS definition of risk
assessment is equivalent to 'weighing policy alt ernatives in the light of the results of risk
assessment' which is part of the Codex Definition to ¨'risk management'". Do you agree with
this conclusion? Please explain your response.

21. We disagree with the conclusion of the EC that the SPS definition of risk assessment
encompasses risk management. The SPS Agreement provides that a risk assessment involves the
"evaluation" of risks. SPS Agreement, Annex A(4). In doing so, Members may take into account
"relevant inspection, sampling, and testing me thods," (SPS Agreement, Article 5.2), but the selection
of appropriate risk management measures goes beyond the evaluation or assessment of risks.
4 Rather,

4 The EC's citation to the Appellate Body report in EC-Hormones does not support the EC's contention
that risk assessment includes risk management. In Hormones, the Appellate Body was simply noting that in
assessing risks, a Member may take account of the effectiveness of risk management measures related to those
risks. Indeed, as noted above, the SPS Agreement specifically notes that risk assessment may take account of
risk management measures such as inspection, sampling and testing methods. However, nothing in the
Hormones Appellate Body report states or implies that the process of risk assessment includes decisionmaking on
risk management measures. See EC – Hormones, AB-1997-4, paras. 181 and 206.

selecting appropriate risk management measures i nvolves a policy determination and the weighing of
policy considerations.

22. This is wholly consistent w ith the Codex definition of risk analysis, which distinguishes risk
assessment from risk management. The Codex defin ition specifically notes that risk management is
the process of weighing policy alternatives to addre ss the risks defined by the risk assessment. In
addition, we would note that the EC omitted a critical part of the Codex definition of risk management:
"The process, distinct from risk assessment
, of weighing policy alternativ es, in consultation with all
interested parties, considering risk assessment and ot her factors relevant for the health protection of
consumers and for the promotion of fair trade practices, and, if needed, selecting appropriate
prevention and control options." [emphasis added] Codex Procedural Manual, 14th Edition; Page 48.

127. At para. 42 of Canada's supplementary re buttal, Canada suggests that crop husbandry
includes breeding and that if a scientist empl oys selective breeding meth ods in the laboratory,
this should qualify as crop husbandry because the scientist would be performing the same
operations as a farmer who employs selective breedi ng methods on the farm. But is the insertion
of a transgene part of the breeding of biotech crops? Or is the breeding rather the re-production
of the biotech seed?

23. Breeding includes the insertion of a transgen e as well as the reproduction of biotech seed. As
defined by Webster's New World Dictionary of the American Language, breeding is "the producing of
plants and animals, especially for the purpose of improving the stock." The introduction and selection
of new genetic traits, irrespective of the met hod by which this is accomplished, is an essential
component of plant breeding. Canada correctly asserts that modern methods of plant breeding, a subset
of crop husbandry, range from techniques typica lly associated with traditional breeding to the
utilization of modern genetics. Current methods to generate new and improved plant varieties include
cross hybridization and natural selection in the fi eld but also encompass variation introduced by
modern laboratory techniques such as tissue culture, embryo rescue and genetic transformation.

Questions not Previously Provided to the Parties

For all parties

140. With reference to (1) Codex standards 192 and 193, (2) IPPC and (3) ISPM 11:

 (a) Are they "rules of international law applicable in the relations between the
parties to this dispute " within the meaning of Article 31(3) of the Vienna
Convention on the Law of Treaties?

 (b) May they be used as additional factua l evidence of the ordinary meaning of terms
contained in Annex A of the SPS Agreement, as the United States appears to
suggest in its rebuttal at para. 6 of attachment II? (The United States is invited to
provide elaboration on its statement at para. 6.)

24. Subpart a: Whether Codex and IPPC standards are "r elevant rules of international law"
for purposes of the Vienna Convention of the Law of Treaties presents a theoretical question that the
Panel need not address in the context of this disp ute. Instead, as noted in response to Question 121
above, Annex A of the SPS Agreement specifica lly refers to standards, guidelines, and
recommendations adopted by the Codex and IPPC. Accordingly, there is no need to address the
relevance of Codex and IPPC standards under more general rules of treaty interpretation.

25. As the United States noted previously, definiti ons in Codex and IPPC documents may be used
as additional factual evidence of the ordinary me aning of terms contained in Annex A of the SPS
Agreement. Delegates to organizations such as Co dex and IPPC are generally knowledgeable in their
respective fields, and the fact that those organizati ons adopt particular defin itions of terms should be
considered pertinent to the ordinary meaning of th ose terms. Or, put anothe r way, it would not make
sense to consider only definitions drafted by the authors of general purpose dictionaries while
excluding any consideration of definitions adopted by persons knowledgeable in their fields. However,
the evaluation of the importance of any particular definition must be made on a case-by-case basis. For
example, Codex or IPPC drafters may have special reasons to adopt a narrow definition of particular
terms in order to limit the scope of a standard to issues of concern to their respective organizations.
Such a narrowly drafted definition would not indicat e that a term lacked a broader, more common
definition.

141. With reference to Annex (B)(1) of the SPS Agreement, please answer the following
questions:

 (a) Does the term "sanitary and phytosanitary regulations" cover administrative
decisions which relate to the operation of approval procedures and which are
generally applicable?

 (b) May the phrase "sanitary and phytosanitary regulations which have been
adopted" be interpreted to encompa ss also sanitary and phytosanitary
regulations which have been adopted de facto (e.g., generally applicable decisions
which have been reached informally and which are unrecorded)?

26. Subpart a: Yes, the term "sanitary and phytosanit ary regulations" covers administrative
decisions which relate to the operation of approval procedures and which are generally applicable.
This is made clear by footnote 5 to Annex B, which provides that "sanitary and phytosanitary
regulations" are "sanitary and phytosanitary measures such as laws, decrees or ordinances which are
applicable generally."

27. Subpart b: Yes, the phrase "sanitary and phytosan itary regulations which have been
adopted" may be interpreted to encompass also sanitary and phytosanitary regulations which have been
adopted de facto. First, nothing in the text of the agreemen t provides that such measures must be
adopted in a written form. Second, to exclude unwritten, de facto measures would make meaningless
the transparency obligations of Annex B. A nnex B requires that SPS re gulations of general
applicability must be "published pr omptly." If unwritten measures were excluded from Annex B, a
WTO Member could avoid its transparency obliga tions simply by adopting de facto, unwritten
measures of general applicability.

142. Please explain the meaning and rationale of the requirement in Article 2.2 that SPS
measures be "based on scientific principles" and how this is different from the requirement that
SPS measures not be maintained "without sufficient scientific evidence".

28. In Article 2.2, the requirements that measures must be "based on scientific principles" and not
be maintained "without sufficient scientific evidence" are distinct but related requirements. Based on
"scientific principles" means that the rationale for the measure must be based on scientific principles,
including, for example, the use of the scientific method (that is, posing a hypothesis and testing that
hypothesis through experiment). A measure based , for example, on pure superstition would not be
based on "scientific principles." In contrast, "suffi cient scientific evidence" relates to actual evidence
that the product covered by the measure poses a risk covered within the scope of the SPS Agreement.

143. The Panel notes a number of instances wh ere the same or a related product was
apparently submitted under separate applications for approval. This appears to be the case for
Monsanto Roundup Ready oilseed rape GT73 (EC-70, EC-79); Syngenta Bt 11 maize (EC-80,
EC-92, and related EC-69); Pioneer/Dow AgroSc iences Bt corn Cry1F (1507) (EC-74, EC-75,
EC-95); Monsanto Roundup Ready corn NK603 (EC-76, EC-96); Monsanto Roundup Ready
corn GA 21 (EC-78, EC-85, EC-91); and the various "stacked" products. To what extent does
the assessment by a lead CA, the relevant EC Scientific Committee and any information
provided by a notifier under one application serve as a basis for consideration of another
application for the same or a related product?

29. The data provided are fundamentally simila r for submissions made under Dir 90/220 (2001/18)
and Novel Foods Reg 258/97; however, the scope of the applications, and therefore the endpoints of
the respective risk assessments, may be dissimilar.

30. Taking the Member States first, most have separate CA secretariats (often in different
ministries) and separate expert committees for a pplications under the two statutes. An assessment
under one statute would, therefore, probably not in form an assessment under th e other. That said,
certain applications under Dir 90/220 in the UK, fo r example, were also seen by the CAs and/or
experts responsible for Reg 258/97. Similarly, cer tain national expert committees have accountability
under both statutes, e.g. COGEM in the Netherlands. It is not possible, therefore, to give a generally
applicable answer to this question, since national arrangements vary.

31. At the EC level, the two statutes were administered by separate DGs (ENV and SANCO,
respectively) and assessed by separat e scientific committees (the SCP and SCF, respectively) until the
creation of the joint Novel Foods/GMO working group (early 2001) and, subsequently, the GMO panel
of EFSA. Since 2001, an assessment under one statut e would, therefore, inform an assessment under
the other.

144. The Panel notes that a number of products containing the same transgenic modifications
as products at issue in this dispute were pr eviously approved by the European Communities
prior to July 1998 (eg, swede rape tolerant to glufosinate ammonium (MS1, RF1) and (MS1,
RF2); swede rape tolerant to glufosinate ammoni um (Topas 19/2); maize tolerant to glufosinate
ammonium (T25); maize expressing the Bt cr y1A(b) gene (MON 810); maize tolerant to
glufosinate ammonium and expressing the Bt cr y1A(b) gene (Bt-11); soybean tolerant to
glyphosate; chicory tolerant to glufosin ate ammonium; maize Roundup Ready NK603). To
what extent and how were the previous assessment s of potential risks to human, animal or plant
health and/or the environment associated wi th these transgenic modifications taken into
consideration in the evaluation of potential risk s arising from the products at issue before the
Panel?

32. Government regulatory authorities with expe rience in regulating plants produced through
modern biotechnology do so by evaluating data for individual products (case-by-case approach). It is
normal practice for regulatory authorities to use th is case-by-case approach within the context of
existing, generally accepted scientific knowledge. Thus, safety data on an individual product is
evaluated along with what is known, for example, of the biology of a particular plant species, how
proteins generally function, and the history of use of the trait that has been introduced into the plant. In
other words, regulators do not evaluate product-specific safety data in a scientific vacuum.

33. If the same Bt protein (e.g. the Bt protein produced by the Bt cry1A(b) gene) is produced in
different types of plants, the safety parameters of the protein (e.g., mode of action, potential for toxicity

to humans and allergenicity) are not likely to differ in different types of plants. With respect to
potential effects on non-target organisms, again, the mode of action of the protein—and therefore the
potential for adverse effects-- would not be different in different plants but there could be different
ranges of exposure across plant species. Similar considerations would be given if the same mechanism
of herbicide tolerance is introduced into different types of plants.

34. Given the paucity of explanations presented by EC memb er States when presenting additional
questions on applications, the extent to which EC regulators actually took account of data from related
applications is uncertain. However, EC regulators did have the discretion to consider such data, and on
occasion EC regulators explicitly did so. See, for example, EC 74 (Pioneer BT maize event 1507),
attachment 36, question 11 from the lead CA to the applicant: "Results that demonstrate the
equivalence (e.g. amino acid sequence, molecular weight) of PAT expressed in transgenic maize line
1507 to PAT expressed in crops previously approved under 90/220/EC should be supplied."

For all complaining parties

145. With reference to para. 7 of the European Communities second oral statement, is it "for
the Complainants to rebut this evidence [submi tted by the European Communities] by putting
forward arguments and evidence as to why reaso ns for delays put forward in the European
Communities' submissions are unjustified"?

35. As the United States explained at length in its oral statement at the second substantive meeting,
the complainants do not
 have the burden or proving or dispro ving that any particular delay was
unjustified. Rather, the United States presented a clear and compelling case that the EC adopted an
across-the-board general moratorium on biotech approva ls. Under that moratorium, applications were
allowed to make some progress, but no application was allowed to reach final decision. In other
words, as long as certain member States opposed th e approval of biotech products as a matter of
principle, and as long as the Commission was unwilling to submit product applications to votes by
member State and then to the Commission itself in the face of such opposition, no product could ever
be approved under the moratorium. Thus, the Unite d States does not have the burden of establishing
that particular delays were justif ied or unjustified. Moreover, as pr eviously explained, the fact that
certain questions by EC regulators were warranted is to be expected, and is not at all inconsistent with
an across-the-board moratorium on final decisions.

For the United States

149. In your comments on the experts' replies to the Panel's Question 4, you have indicated
that given the availability and use of insect resist ance management (IRM) strategies, the delay of
Bt crop applications under the EC's pre-market a pproval system "cannot be justified by alleged
concerns over the emergence of Bt-resistance where objecting member States failed to address
the validity to the IRM plans already submitted by applicants, particularly when those plans
were deemed acceptable by the relevant EC sc ientific committees." Please identify those
products (include the EC-chronology numbers) where you believe that an objecting member
State failed to address the validity of plans alrea dy submitted, and particularly identify those
products for which the relevant EC scientific committees had found the IRM plans acceptable.

36. IRM plans were submitted for the following produc ts, both as part of the original notification,
and again, as part of the updated notifications submitted pursuant to 2001/18:

 (1) Bt Cotton, Event 531, EC Exhibit 65.
 (2) Bt-11 Corn, EC Exhibit 69

 (3) Bt Cry 1F Corn, Event 1507, EC Exhibit 75.

In the case of Bt cotton, 531, an amended plan w as submitted in response to Member State concerns,
but then no action appears to have been taken for a period of over four years. In the case of the two
corn products, individual Member States objected, raisi ng concerns with respect to the development of
insect resistance, without addressing the validity of the IRM plans that had been submitted.

As noted above, the applicant submitted an IRM plan as part of its original notification.
5 In 1998, in
response to Member State concerns, the applicant adapted the plan to addr ess the "particular cotton
cultivation conditions in Span and in Greece [and to] take into account the biology and susceptibility of
the major European lepidopteran target-pests , the market structure, average farm size and market
penetration in the cotton cultivation areas and the n eed to work closely with farmers and extension
services to educate and implement the plan."6 According to the chronology, no action was taken on the
application between 1999 and 2003, when the applicant updated its notification in accordance with
Directive 2001/18.

Regarding Bt-11 corn (EC Exhibit 69), the applican t submitted an IRM plan as part of its original
notification, submitted in 1996.
7 In 1998, the French advisory Committee issued a positive opinion
that explicitly considered the potentia l for development of insect resistance. 8 Subsequently, both Italy
and Denmark both raised objections relating to the possible development of insect resistance, and the
need for further information, but wholly failed to address the applicant's IRM plan. Notwithstanding
the applicant's IRM plant, Italy merely objected that "taking into account all the aspect concerning the
use of a plant which expresses resistance to lepidopt ers, it is necessary to foresee a monitoring plan,
aiming to obtain information concerni ng possible rising of resistance..."
9 Similarly, Denmark simply
objected on the grounds that "[t]he expert group on monitoring development of insect resistance should
end their work before any consent is given to introduce Bt plants to the market. New information on
possible development of resistance should be included in the work from the expert group."
10

In 2000, after evaluating the notification, including the applicant's IRM plan, the SCP also issued a
favorable opinion.
11 In section 4.5.4, the SCP discussed its findings relating to the potential
development of insect resistance, stating

Although it is not possible to determine optim al dose until resistant insects exist in the
field, high protein levels appear present in all important plant tissues early in the
season and should provide season long control. The success of the resistance
management strategy will depend on the ability of any monitoring program to detect
resistance as soon as possible and the extent and quality fo advice given to farmers.
The SCP published an opinion on 4 March 1999 on resistance monitory [citation
omitted] as developed by the Expert Group on Monitoring for Insect Resistance to Bt-

5 EC Exhibit 65, att. 3-17, appendix 7.
6 EC Exhibit 65, att. 49.
7 EC Exhibit 69, att. 3, pp 159-168
8 EC Exhibit 69, att. 26, p 4.
9 EC Exhibit 69, att 60, p. 4.
10 EC Exhibit 69, att 66, p. 2.
11 EC Exhibit 69, att. 83, p. 9.

toxins. Such monitoring should be carried out in Bt-maize and should provide an
adequate framework to delay the onset of resistance in the target pest.
12
In 2003, the applicant submitted an updated notific ation, pursuant to Directive 2001/18, that included
an updated IRM plan. 13 Shortly thereafter, the French a dvisory Committee issued a positive opinion
on the notification. This opinion specifically addressed the potential for the product to cause insect
resistance and concluded that th e applicant's plan was acceptable. 14 Nonetheless, Italy objected, citing
concerns about the potential emergence of insect resistance, but entirely failing to address the
particulars of the applicant's IRM plan. 15 Spain also objected on the grounds that an IRM plan was
necessary, failing in any respect to address the fact that the applicant had submitted an IRM plan.16

The case is similar with respect to Bt cry 1F Corn 15 07, (EC Exhibit 75). As part of both the original
application, and the updated no tification submitted pursuant to Di rective 2001/18, an IRM plan was
submitted.17 Upon reviewing the IRM plan, the Spanish National Biosafety Committee concluded that
"an adequate Resistance Manageme nt Plan will be applied," and recommended that the product be
approved.18 Nonetheless, Austria objected, stating that "a complete remedial plan should be worked
out before the placing on the market of this product." 19 At no point does the objection identify a
specific deficiency in the applican t's proposed IRM plan, or otherwise address the particulars of the
proposal.

150. In paragraph 97 of the US Answers to Quest ions Posed in the Context of the First Panel
Meeting (16 June 2004), you indicate that "Directive 90/220 does not precisely specify the time of
each step, but appears to contemplate a time-frame from application to decision of no more than
1 year". What is the basis for this statement?

37. The conclusion that Directive 90/220 appears to contemplate a time-frame from application to
decision of no more than 1 year is based on the follow ing analysis of the time frames in the directive.
The directive provides roughly eight months for all timelines specified for the key steps in the approval
process: favourable member State opinion within 90 days (Art.12 para 2), plus member State review
of 60 days (Art.13 para 2), plus Article 21 procedure of 3 months (A rt. 21, para 5). The remaining
steps in the legislation are procedural, with no d ecision element, such as forwarding dossiers from the
member State level to the Community level. It woul d not be sensible for those procedural steps to be
expected to take longer than the time for the substa ntive processes, which total eight months. Even if
those procedural steps took one half as long, or four months, the total processing time would be no
more than one year.

151. With reference to paragraph 12 and 14 of the US statement on 22 February 2005, for the
convenience of the Panel please identify all docu ments (according to the EC exhibit/attachment
number) which you consider contain specific statements acknowledging or attesting to the
existence of a de facto moratorium.

12 EC Exhibit 69, att.83, p. 9.
13 EC Exhibit 69, att. 104, pp 93-110.
14 EC Exhibit 69, att. 95, p 5.
15 EC Exhibit 69, att. 112, p 6.
16 EC Exhibit 69, att. 122
17 EC Exhibit 75, att.1; att.22 & 23, pp. 23-55..
18 EC Exhibit 75, att.29, p. 7.
19 EC Exhibit 75, att. 85, p.3.

38. In the attached Table 1, the United States has provided examples of the many instances in
which the EC's own product application histories ac knowledge a de facto moratorium. This evidence,
of course, is in addition to the many acknowledgmen ts of the moratorium contained in the exhibits
presented by the United States in its first submission and first oral statement.

For the European Communities and the United States

165. (EC-73): It appears that all of the rel evant documentation was not provided in the
context of the application contained in EC-73. However, the chronology provided by the
European Communities shows no action on this application between the 02/00 requests for
further information from the CA, and the 1/03 relaunch of the application under Directive
2001/18. Did the notifier fail to provide the information requested in 02/00, and if so, why?

39. The United States understands that the notif ier did not provide the requested additional
information.

166. (EC-74): As was noted in the replies by th e experts, the complete documentation related
to this dossier was not provided to the Panel. In some instances, the attachment provided only
the titles of annexes, but not their contents. Please clarify whether the missing documentation
had been provided to the lead CA, and if so, when?

40. In her response to Panel's question 34, Dr. Nutti said she was unable to find the quail feeding
study within the files. Upon extensive review of th e EC's CDs, the United States has located this study
in EC-74, attachment 44.

41. Dr. Nutti further noted that EC-74, attachment 36 did not include all the referenced annexes.
The Panel above similarly observes that in some attachments, only the titles of annexes have been
provided, but not their contents. The attachments to which Dr. Nutti and the Panel are referring are the
applicant's cover letters providing further informa tion in response to the lead CA's requests for
information. The United States has reviewed the documents provided to the Panel relating to EC-74
and has located all relevant annexes referenced in all of these cover letters. Most annexes referred to in
these cover letters have been provided as separate attachments and are not included in the attachment
containing the cover letter.

42. Thus, for example, attachment 35 is the app licant's October 16, 2001 cover letter listing further
information being provided, including a narrative and annexes, but attachment 35 does not actually
include the new information. Attachment 36 is the narrative answers to the lead CA's questions. The
narrative lists the titles of annexes 1.B through 9.B, but attachment 36 does not include the annexes
themselves. Instead, attachments 37, 40, 41, 42, 43, 44, 45, 47, and 48 are the actual annexes 1.B
through 9.B.

43. Another less straightforward example is attach ment 18, the applicant's February 14, 2001 cover
letter listing further information being provided in response to the lead CA's December 15, 2000
request. The cover letter lists Annexes 1.A th rough 4.A, but the annexes are not included in
attachment 18. Instead, attachment 28 is Annex 1.A. Annex 2.A is found in attachments 20 through
26. Attachment 29 is Annex 3.A. Attachments 30 and 31 are Annex 4.A. Attachment 19 is the
narrative answers to specific questions. In addition, attachment 32 appears to be a duplicate of the
entire submission, including the cover letter, the narrative answers, and all the annexes.

44. Similarly, the applicant's January 30, 2002 cover letter lists Annexes 1C through 5C. Although
the cover letter is included in attachment 53, the annexes are not. These annexes are in attachments 55

through 59, respectively (the last few pages of attachment 59 appear to be the relevant pages for
Annex 5C).

45. The United States also refers the Panel to EC -74, attachment 2, a document titled "Summary of
the evaluation carried out by the Netherlands Comp etent Authority." This document notes that two
different agencies, the COGEM, the Committee on Genetic Modification, and the RIKILT-DLO, the
State Institute for Quality Control of Agricultural Pr oducts (among others), evaluated the dossier. The
document notes that the COGEM requested additional information from the applicant on December 15,
2000, March 19, 2001, and March 25, 2002 and provi ded an opinion on January 15, 2003 that no
significant potentially negative effects were identifie d related to the proposed placing on the market of
the product. The document also noted that "[b]as ed on an evaluation of the complete dossier, the
RIKILT-DLO concluded that there is no indication th at the product would not be safe when used as
animal feed", its last opinion having been expressed April 16, 2003. Given these two agencies' positive
safety assessments, the United States presumes that all relevant documentation had been provided to
the lead CA.

46. Finally, in the experts' replies, specifically Dr. Nutti's replies to questions 33 and 34, Dr. Nutti
stated that she was unable to recover the inform ation on tables 10A, 11A, 12A and 13A in EC-74,
attachment 19. The United States notes that it has been able to access the information from the copies
of the CDs that the EC provided to the United States.

167. (EC-93): It appears that some of the do cumentation relevant to the safety assessment
was not provided to the Panel. Please clarif y whether the missing documentation had been
provided to the lead CA, and if so, when?

47. The United States understands as follows. The applicant did provide the information
requested, as indicated in the applicant's letter date d 18/07/01. The applicant received a response from
the EC on 31 August 2001. The United States does not know why the information the applicant
provided was not included in the product history CDs.

48. In the 31 August 2001 letter, additional info rmation was requested regarding data about the
composition of fibre constituents. The applicant responded to the 31 August 2001 letter, explaining
why the information requested had already been prov ided or could be addressed with information that
BCS had already provided.

49. The 31 August 2001 letter also requested or mentioned additional information (growth
performance study and molecular char acterisation) relating to event A5547 -127. The original file
submitted contained two events - A2704-12 and A 5547-127. The applicant made the decision to
pursue only A2704-12 at that time and therefore elected not to provide requested information with
respect to A5547-127.

For Canada, European Communities and the United States

168. (EC-72): The Panel notes that the chrono logy provided by the European Communities
shows no actions on this application betw een 12/99 (when according to the European
Communities the UK CA allegedly advised the company that the dossier required substantial
revision and clarification) and its re-submissi on in 1/03 under Directive 2001/18. Could the
parties please explain the lack of action?

50. The United States understands that the appli cant did not provide the data requested in
December 1999.

For Argentina, European Communities and the United States

169. With respect to the safeguard measures invoked for Maize Bt-176, please list the
scientific evidence on which the concerns raised by Austria and Germany on potential adverse
effects on non-target organisms were based (August 2003).

51. A. The scientific studies that were explicitly cited by Austria and Germany in connection
with the safeguard measures applicab le to Maize Bt-176, and that address issues relating to effects on
non-target organisms have been listed below.

Studies cited by Austria

EC (European Commission): The European Commi ssion has decided to authorize genetically
modified maize in the light of available scientific advice. Press release including summary conclusions
of the three scientific committees. 18.12.1996.
20

EPA (1995a) Pesticide Fact Sheet. Cry IA(b). Ba cillus thuringiensis cry IA (b) Delta-Endotoxin and
the Genetic Material Necessary for its Production (Plasmid Vector pCIB4431) in Corn. US EPA,
Office of Prevention, Pesticides, and Toxic Substances, 10.8.1995
21

EPA (1995b) Pesticide Fact Sheet. Cry IA(b). Bacillus thuringiensis subsp. Kurstaki cry IA (c) Delta-
Endotoxin and its Controlling Sequences as Expressed in Cotton. US EPA, Office of Prevention,
Pesticides, and Toxic Substances, 10.8.1995.
22

EPA (1996) Pesticide Fact Sheet. Bacillus thuringi ensis Delta-Endotoxin and the Genetic Material
Necessary for its Production (Plasmid Vector p201502) in Corn. US EPA, Office of Prevention,
Pesticides, and Toxic Substances, 5.8.1996.
23

Gould, F. (1994): Potential and Problems with High-Dose Strategies for Pesticidal Engineered Crops.
In: Biocontrol Sci. Tech. 4(4), 451-461.
24

Hokkanen; H. And Deacon, J (e ds.) (1994): Special Issue: OECD Workshop on Ecological
Implications of Transgenic Crop Plants Containing Bacillus thruingiensis Toxin Genes. In: Biocontrol.
Science and Technology Vol.4.
25

Höfte, H. and Whiteley, H.R. (1989): Insecticidal crys tal proteins of Bacillus thuringiensis. Microbiol.
Rev. 53, 242-255.26

Kaiser (1996): Pests Overwhelm Bt Cotton Crop. Science 273, 423.
27

20 EC Exhibit C/F/94/11-03, att 1
21 Id.
22 Id.
23 Id.
24 Id.
25 Id.
26 Id.
27 Id.

Macilwain (1996): Bollworms chew hole in gene-engineered cotton. Nature. 382, 289.
28

Milner, R. (ed) (1994): Special Issue: Bacillus Thuringiensis. Agric., Ecosys. Env. Vol. 49.
29

Ogunseitan OA (1995) Bacterial genetic exchange in nature. Sci Prog. 78: 183-204.30

Ow.D.W. (1996): Recombinase-directed chromosome engineering in plants. Curr. Op. Biotech 7, 181-
186.
31

Ow.D.W. and Medberry, S.L. (1995): Genome mani pulation through site-specific recombination.
Crit. Rev. Plant Sci. 14, 239-261.32

Roush, R.T. (1994): Managing Pests and their Resist ance to Bacillus thuringi ensis: Can Transgenic
Crops be better than Sprays? In: Biocontrol Sci. Tech. 4(4), 501-516.
33

Sharma UK. (1993), Insights into plasmid biology. Curr. Sci. 64: 283-285.
34
Salyers AA et al (1995) Conjugative transposons: an unusual and diverse set of integrated gene transfer
elements. Microbiol. Rev. 579-590.35

Tapp, H. And Stotzky, G. (1995): Insecticidal Ac tivity of the Toxins from Bacillus thuringiensis
subspecies kurstaki and tenebrionis Adsorbed and Bound on Pure and Soil Clays. Appl. Env.
Microbiol. 61(5), 1786-1790.
36

Whalon, M.E. and Norris, D.L. (1996) Resistance Ma nagement for Transgenic Bacillus thuringiensis
plants. Biotechnology and Development Monitor 29, 8-12.
37

Gould, et al.; PNAS - http://www.pnas.org/cgi/content/full/94/8/3519#abs
38

Tabashnik, et. al.; PNAS - http://www.pnas.org/cgi/content/full/94/5/1640
39

"Biodiversity Implications of Genetically Modified Plants", International Scientific Conference,
Ascona/Switzerland, September 2003.40

Ruud de Maagd, "Molecular and biochemical analysis of the Bt-corn/cotton leafworm/green lacewing
trotrophic interaction"; oral presentation at "Biodivers ity Implications of Genetically Modified Plants",
International Scientific Conference, Ascona/Switzerland, September 2003.
41

28 Id.
29 Id.
30 Id.
31 Id.
32 Id.
33 Id.
34 Id.
35 Id.
36 Id.
37 Id.
38 EC Exhibit C/F/94/11-03, att 5.
39 EC Exhibit C/F/94/11-03, att 6.
40 EC Exhibit C/F/94/11-03, att 23.
41 Id.

Claudia Zwahlen, "Implications of transgenic Bacillus thuringiensis maize varieties in soil
ecosystems"; oral presentation at "Biodiversity Im plications of Genetically Modified Plants",
International Scientific Conference, Ascona/Switzerland, September 2003.
42

Zwahlen, C., Hillbeck, A., Gugerli, P. & Nentwig, W. (2003a): Degredation of the Cry 1Ab protein
within transgenic Bacillus thuringiensis corn tissue in the field. Molecular Ecology, 12, 765-775.43

Zwahlen, C., Hillbeck, A., Gugerli, P. & Nentwig, W. (2003b): Effects of transgenic Bt corn litter on
earthworm Lumbricus terrestris. Molecular Ecology, 12, 1077-1086.
44

Darvas, B., Kincses J., Vajdics Gy., Polgàr A., L. , Juracsek J., Ernst, A., and Székács A. (2003): 49
th
Abs. Plant Protection Days, page 45.45

Eva Vojtech, "Effects of Bt maize on the herbivor e Spodoptera littoralis and the parasitoid Cotesia
marginiventris", oral presentation at "Biodiversit y Implications of Genetically Modified Plants",
International Scientific Conference, Ascona/Switzerland, September 2003.46

Darvas, B., Gharib, A., Csóti A., Székács A., Vajdics Gy., Peregovits, L., Ronkay, L. and Polgàr A., L.
(2002): 48
th Abs. Plant Protection Days, page 31.47

Environmental Science and Technology, July 2003, p. 249A (zeitert: Proc. Natl. Acad. Sci. U.S.A.
2003, 100, 5004-5009)48

A.N.E. Birch, et al., SCIR/Dundee/Scotland, "Expecting the Unexpected"; oral presentation at
"Biodiversity Implications of Genetically Modified Plants", International Scientific Conference,
Ascona/Switzerland, September 2003.
49

Zwahlen, et al (2003), Degradation of the Cry1Ab pr otein within transgenic Bacillus thuringiensis corn
tissue in the field. Molecular Ecology, 12, 765-775.
50

Zwahlen, et al (2003), Effects of transgenic Bt corn litter on the earthworm Lumbricus terrestris.
Molecular Ecology, 12, 1077-1086.51

Morin, et al, PNAS – http://www.pnas.org/cgi/doi/10.1073/pnas.0831036100
52

Saxena, et al (2002), Bt toxin is released in root exudates from 12 transgenic corn hybrids representing
three transformation events. Soil Biology & Biochemistry, 34, 133-137.53

42 EC Exhibit C/F/94/11-03, att 23.
43 Id.
44 Id.
45 Id.
46 Id.
47 Id.
48 Id.
49 EC Exhibit C/F/94/11-03, att 23.
50 EC Exhibit C/F/94/11-03, att 25.
51 EC Exhibit C/F/94/11-03, att 26.
52 EC Exhibit C/F/94/11-03, att 27
53 EC Exhibit C/F/94/11-03, att 28

Darvas & Szkacs, December 2, 2003: Bt-toxin levels in DK-440-BTY (YieldGard) Bt-corn and
stubble. Effects of DK-440-BTY (YieldGard) Bt-corn pollen on Inachis io (Nymphalidae) larvae. Non-
target effects of DK-440-BTY (YieldGard) Bt-corn.
54

Hilbeck, et al, Biodiversity Implications of Geneti cally Modified Plants: Abstract Book. September 7-
12, 2003.55

Nick Birch, et al, "Expecting the Unexpected: Po tential Ecological Impacts of Unintended Metabolic
Changes in GM and Conventional Crops" (PowerPoint presentation).
56

Studies/Information cited by Germany:

Losey, et al., 1999, Nature 399:214.57

Hilbeck, et al., (1999) Prey-mediated effects of Cry1Ab Toxin and protoxin and Cry2A protoxin on the
predator Chrysoperla carnea. Entomologia Experimentalis et Applicata, 91(2): 305-310.58

Hilbeck, et al., (1998) Toxicity of Bacillus thuri ngiensis Cry1Ab Toxin to the Predator Chrysoperla
carnea (Neuroptera: Chrysopidae). Environmental Entomology
59.

Hilbeck, et al., (1998) Effects of transgenic B acillus thuringiensis corn-fed prey on mortality and
development time of immature Chrysoperla carn ea (Neuroptera: Chrysopidae). Environmental
Entomology.60

Saxena, et al., 1999, Nature 402:480.61

54 EC Exhibit C/F/94/11-03, att 29.
55 EC Exhibit C/F/94/11-03, att 30
56 EC Exhibit C/F/94/11-03, att 31
57 EC Exhibit C/F/94/11-03, att 16.
58 EC Exhibit C/F/94/11-03, att 17
59 EC Exhibit C/F/94/11-03, att 18
60 EC Exhibit C/F/94/11-03, att 19
61 EC Exhibit C/F/94/11-03, att 20.

TABLE 1 – REFERENCES TO MORATORIUM IN EC APPLICATION HISTORIES

EC
Exhibit Product Attachment
# Excerpt
62
InVigor Seed
Link and
Liberty Link 84
The Commission regards this as an opportunity to reinforce the provisions contained in its draft Decisions in a number of
respects. It would therefore seem appropriate to suspend the current procedure and convene a meeting of the Committee as soon
as possible.
 117_trans
[T]he existing situation could result in products being released on the market without being labelled for GMO, despite the fact
that these products may within a rapid timeframe require such labelling. This it not satisfactory.

63 Oil seed rape 99
In May 1998, the Scientific Committee on Plants (SCP) of the European Commission expressed a positive opinion on the
notification C/BE/96/01. They concluded that there is no evidence to indicate that the placing on the market of GM oilseed rape
MS8/RF3, with the purpose to be used as any other oilseed rape, is likely to cause adverse effects on human health and the
environment. ... Since then, the dossier has been blocked at European level by the de facto moratorium.
 102_trans
The Scientific Committee on Plants had also issued a positive opinion, but had raised questions concerning monitoring and
agricultural practices. On 28 May 1999, the Commission had published a decision that had to be voted on. Given the de facto
moratorium that had been in place since 1999, the dossier was bogged down in European procedures.
 102_trans
Mrs Janssens expressed the concern felt by the Office of Minister Aelvoet that the forwarding of this information could be
interpreted as meaning that Belgium was pursuing the ad interim approach suggested by the European Commission, whereas in
a recent consultation Belgium had clearly defended the standpoint that it did not agree with that approach and did not wish to
continue processing dossiers on the marketing of GMOs until the new Directive, 2001/18/EU, had come into effect. The
forwarding of the additional information relating to the Aventis CropScience dossier could come across as a signal to the
opposite effect.
 102_trans
In order to go some way towards meeting the concerns of the Office of Minister Aelvoet, it was decided to attach an
accompanying letter to the additional information, making it clear that the information was being forwarded to the Commission
as required under Directive 90/220/EEC, but that this was not to be construed as a political signal to the effect that Belgium was
in agreement with the application of an ad hoc approach and the lifting of the moratorium on the marketing of GMOs.
 102_trans
"... until such time as clarity is obtained regarding the moratorium and traceability, we are against field trials. The reason is
that, while discussions are ongoing at European level, it is difficult to give a signal to a company to the effect that its proposal
(revised to take future legislation into account) is a good one. This would be improper government practice, as it would send
out the wrong signals to both the company and the population. Firstly, this would give the company the impression that the
current European proposals would not undergo any further change. And secondly, it would give the population the impression
that only the financial interests of a company were considered to be important."
(signed: Jean-Pierre De Leener, advisor to the Flemish Minister of Agriculture and the Environment.
 102_trans
[T]he moratorium concerned only the marketing of GMOs and not their release for experimental purposes.

 106_trans
The draft recommendation was approved by the members of the Biosafety Council. [The Council emphasised] the importance of
including a covering letter explaining that sending this update to the European Commission was not to be interpreted as a signal
from Belgium that it wanted the current moratorium to be lifted.

EC
Exhibit Product Attachment
# Excerpt
64 120
Having the revised directive fully adopted will not be sufficient. The re-start of the regulatory process will depend on the
willingness of the Commission to do it. It is commonly analysed that the Commission will not promote an Art 21 vote meeting,
if there are no indications that the member-states are supporting the process and/or expected to vote positively. Another key
step for the member-states acceptance is the publication of Commission papers on traceability/labelling and liability that is
expected by March 2001 (or later). These papers are very important because one of the reasons for the 5 member-states to start
a moratorium was precisely labelling and traceability.

65 65
Members of the CNB are reminded that these two notifications of genetically modified cottons were studied in Spain within the
framework of Directive 90/220/EEC. Spain drafted a favourable report, which was submitted to the European Commission, to
which must be added the positive report by the Scientific Committee on Plants. However, both dossiers were put to the vote in
1999 and a qualified majority was not reached, so they remained pending and blocked during the de facto moratorium.
 65
Information was updated regarding the complaint against the EU submitted to the World Trade Organization (WTO) by the
United States, Canada and Argentina, and nine countries supporting them, objecting to the moratorium it has maintained since
1998 on the approval of new genetically modified products.

66 65
Members of the CNB are reminded that these two notifications of genetically modified cottons were studied in Spain within the
framework of Directive 90/220/EEC. Spain drafted a favourable report, which was submitted to the European Commission, to
which must be added the positive report by the Scientific Committee on Plants. However, both dossiers were put to the vote in
1999 and a qualified majority was not reached, so they remained pending and blocked during the de facto moratorium.
 65
Information was updated regarding the complaint submitted to the World Trade Organization (WTO) by the United States,
Canada and Argentina, and nine countries supporting them, against the EU objecting to the moratorium it has maintained since
1998 on approval of new genetically modified products.
67 91
The company was aware of the declarations of certain Member States in the June Council and wondered what effect this would
have on the authorisation process ... .

69 121
The lead competent authority i ssued "a favourable opinion on the placing on the market of the product [...] under the following
conditions: [...] (iii) Placing on the mark et cannot be authorised until the Community regulati ons on the traceability and
labelling of GMOs and on GM food and feed have entered into force." In accordance with the French position, the German CA
is of the opinion that no consent should be given until both regulations are in force.
 125
Denmark also wants to draw attention to the declaration from March 2001 in which 6 Member States "reaffirmed their intention,
when exercising the powers conferred upon them, of ensuring that the new authorisations for cultivating and marketing GMOs
are suspended pending the adoption of effective provisions concerning a complete traceability of GMOs that guarantees reliable
labelling of all GMO products."
 149
Traceability and labelling: Consents for marketing GMOs should not be granted until all the requirements of the Regulation
concerning traceability and labelling are applicable.
 158
Denmark finds that approval for placing on the market cannot take place before the regulation on traceability and labelling is
fully into force.
 160
The Norwegian CAs are of the opinion that consents for marketing of genetically modified plants should not be granted until all
the requirements of the Regulation concerning traceability and labelling (1839/2003) have been met and the Regulation is fully
applicable.

EC
Exhibit Product Attachment
# Excerpt
70 70
In addition, Denmark wants to draw attention to the declaration from March 2001 in which 6 Member States "reaffirmed their
intention, when exercising the powers conferred upon them, of ensuring that the new authorisations for cultivating and
marketing GMOs are suspended pending the adoption of effective provisions concerning a complete traceability of GMOs that
guarantees reliable labelling of all GMO products."
 72
The Swedish Society for Nature Conservation objects to the application for the following reasons: 1) products from animals that
have eaten genetically modified feed shall be labelled, 2) the rules on traceability and labelling have not yet been implemented
in national legislation, 3) the issue of liability for genetically modified organisms has not been solved at EU level, and 4) the
decision should await the result from the study on coexistence. They therefore believe that the moratorium on genetically
modified organisms should remain in place.
 76
[T]he French authorities point out that they are committed to the establishment of a European traceability and labelling system
for GMOs and GMO-derived products and that consequently, the entry into force of the texts currently under adoption remains a
prerequisite for authorizing the marketing of any new GMO.
 77
As a matter of principle, this product should not be placed on the market before the entry into force of the Regulation of the
European Parliament and of the Council concerning the traceability and labelling of genetically modified organisms and the
traceability of food and feed products produced from genetically modified organisms and amending Directive 2001/18/EC. In
addition, further issues concerning liability and the coexistence of genetically modified, conventional and organic crops remain
to be resolved.
 79_trans
[I]t seems reasonable not to base decisions authorizing the launch of the genetically modified foods on the currently applicable,
yet generally considered inadequate, legislation but to wait for the new regulations to come into force. According to the Federal
Government, the effective moratorium for approval of genetically modified organisms shall be terminated as soon as the
regulations for permission and retrospective traceability of the genetically modified foodstuffs and fodders take effect.
 80
The official Belgian position as expressed during agriculture and environment councils is that as far as the regulation
"Traceability and labelling of GMO and traceability of food and feed products produced from GMO" is not entered into force,
the conditions for risk management and public information are not fulfilled to authorize new GMOs under Directive 2001/18.
Moreover, it was also stated that the regulation "GM Food and Feed" should also enter into force prior to proceed to any new
authorization.
 100
Even though this product is only destined for import and further processing in the EU, Austria - apart from the need for further
information - maintains its objection against the putting of this product to the market, as long as all conditions for coexistence
with GMO-free production methods and the issues concerning liability are not cleared in a sound legal way.

73 4
The field trials in Greece did not take place after the declaration of a moratorium on the cultivation of genetically modified
crops.
 12
Members of the CNB are reminded that these two notifications of genetically modified cottons were studied in Spain within the
framework of Directive 90/220/EEC. Spain drafted a favourable report, which was submitted to the European Commission, to
which must be added the positive report by the Scientific Committee on Plants. However, both dossiers were put to the vote in
1999 and a qualified majority was not reached, so they remained pending and blocked during the de facto moratorium.
 12
Information was updated regarding the complaint against the EU submitted to the World Trade Organization (WTO) by the
United States, Canada and Argentina, and nine countries suppor ting them, objecting to the moratorium it has maintained since
1998 on the approval of new genetically modified products.

EC
Exhibit Product Attachment
# Excerpt
74 101
As long as the conditions for co-existence are not clarified on the EU level, Austria holds the opinion that no consent for the
placing on the market of 1507 maize should be given, even though this notification is concerning import only.
 102
The German CA is of the opinion that no consent can be given until the Community regulations on the traceability and labelling
of GMOS and on GM food and on feed have entered into force. In particular, the regulation on traceability and labelling of
GMOs will provide for additional transparency and the possibility of choice for consumers.
 133
Furthermore, Denmark finds that approval for placing on the market cannot take place before the regulation on traceability and
labelling is fully into force.

75 83
[T]he French authorities point out that the entry into force of the regulations on the traceability and labelling of GMOs and of
food and feed products produced from GMOs, and on genetically modified food and feed, is a prerequisite for authorizing the
marketing of any new GMO.
 85
As long as the conditions for co-existence are not clarified on the EU level, Austria holds the opinion that no consent for the
placing on the market of 1507 maize should be given.
 86
Denmark also wants to draw attention to the declaration from March 2001 in which 6 Member States "reaffirmed their intention,
when exercising the powers conferred upon them, of ensuring that the new authorisations for cultivating and marketing GMOs
are suspended pending the adoption of effective provisions concerning a complete traceability of GMOs that guarantees reliable
labelling of all GMO products."
 87
The German CA is of the opinion that no consent can be given until the Community regulations on the traceability and labelling
of GMOS and on GM food and on GM feed have entered into force. In particular, the regulation on traceability and labelling of
GMOs will provide for additional transparency and the possibility of choice for consumers.
 88
Norway is of the opinion that the operational parts of the new EU regulations on traceability and labelling, as well as on
genetically food and feed has to enter into force, and the management consequences of these regulations should be in place
before any GMOs can be placed on the marked.

76 44
Irrespective of the above mentioned scientific objections raised, Austria is of the opinion, that products shall not be placed on
the market before the new regulations concerning genetically modified food and feed as well as traceability and labelling of
GMOs will enter into force. In addition the issue of co-existence of genetically modified, conventional and organic farming is
at the moment under discussion and has to be resolved.
 44_trans
Notwithstanding the abovementioned scientific reservations, it must be stated generally that, before the new and planned
provisions concerning the traceability and labelling of GMO, and concerning the authorization and labelling of GMO foodstuffs
and feedstuffs, have come into force, Austria is in any case opposed to new authorizations.
 46
In addition, Denmark wants to draw attention to the declaration from March 2001 in which 6 Member States "reaffirmed their
intention, when exercising the powers conferred upon them, of ensuring that the new authorisations for cultivating and
marketing GMOs are suspended pending the adoption of effective provisions concerning a complete traceability of GMOs that
guarantees reliable labelling of all GMO products."
 47
The Swedish Society for Nature Conservation objects to the application for the following reasons: 1) products from animals that
have eaten genetically modified feed shall be labelled, 2) the rules on traceability and labelling have not yet been implemented
in national legislation, 3) the issue of liability for genetically modified organisms has not been solved at EU level, and 4) the
decision should await the result from the study on coexistence. They therefore believe that the moratorium on genetically
modified organisms should remain in place.

EC
Exhibit Product Attachment
# Excerpt
 51
The official Belgian position as expressed during agriculture and environment councils is that as far as the regulation
"Traceability and labelling of GMO and traceability of food and feed products produced from GMO" is not entered into force,
the conditions for risk management and public information are not fulfilled to authorize new GMOs under Directive 2001/18.
Moreover, it was also stated that the regulation "GM Food and Feed" should also enter into force prior to proceed to any new
authorization.
 52
[T]he French authorities point out that they are committed to the establishment of a European traceability and labelling system
for GMOs and GMO-derived products and that consequently, the entry into force of the texts currently under adoption remains a
prerequisite for authorizing the marketing of any new GMO.
 54 (p. 28)
In general, we believe that it is unsuitable to proceed with the GMO authorisation process in absence of the final normative on
labelling and traceability, export of GMOs (comprising the structure of the communication of information within the EU) as
well as the new Food and Feed regulation

77 93 (p. 2)
Our conclusion now is that the dossiers for the evaluation of green hearted chicory and radicchio rosso for market authorisation
under Regulation 258/97 are a kind of a "never ending story". The procedure, time, energy and costs are disproportionate
compared to conventional breeding programs. This may lead to the conclusion that development and marketing of transgenic
vegetable crops in the European Union do not have any opportunity.

78 + 85 Maize GA21 35
Lack of a coherent Community-wide traceability system. The French authorities note that no regulatory system ensures
traceability until the end-user has been put in place.
 42 [T]aking into account the declarations given by the 12 ministers at the Council meeting in June 1999 ...
 61
Furthermore, without prejudice to this additional information, the establishment of a European traceability system for GMOs
and GMO-derived products is, for the French authorities, a prerequisite for authorizing the marketing of new GMOs.
 71 [T]aking into account the declarations given by the 12 ministers at the Council meeting in June 1999...
91 Maize GA21

92 Maize Bt11 23
The French authorities recall their position that, before any authorization, there must be legal and technical means whereby the
traceability and labelling of GMOs and GMO-derived products can be ensured.
 27
Apart from this, however, Denmark will refer to the Declaration concerning the suspension of new GMO authorisations by five
Member States (France, Greece, Italy, Luxembourg, and Denmark) at the Environment Council of 24 and 25 June 1999. With
reference to this Declaration Denmark therefore wishes to submit a reasoned objection concerning the Bt11 maize.
 74
In view of the entry into force of the food/feed regulation on 18 April 2004 imposing more stringent requirements for marketing
and labelling and the traceability regulation, on our view it is not at present appropriate to hasten marketing for food under a
regulation which will be out of date in four months.
 75
Regulations 1829/2003 and 1830/2003 have not been implemented and as a result the novel product does not fully comply with
the requirements ... We think there could be problems implementing the traceability systems.
 76
Portugal voted against the authorisation to place Bt11 on the market, since, under Community food safety policy, only the
application of the traceability and labelling rules can guarantee the protection of public health and free choice for consumers.

EC
Exhibit Product Attachment
# Excerpt
 80
In August 2000, Denmark submitted an objection to the approval of Bt11 maize in respect of the novel food regulation with
reference to the declaration approved by Denmark, France, Italy, Greece and Luxembourg on the suspension of new GMO
licences (the moratorium declaration), which was made at the Council meeting (environment) on 24-25 June 1999. The
objection included a reference to the fact that, pending the approval of a regulation that would guarantee the labelling and
effective tracing of GMOs and products derived from them, the moratorium countries would block any new licences for the
cultivation and marketing of GMOs.
 80_trans
The proposal was put on the voting agenda for the meeting of the Standing Committee on the Food Chain and Animal Health on
8 December 2003, but a qualified majority in favour of the proposal was not achieved. Denmark voted against it on the grounds
that it is evident from the regulation concerning traceability and labelling (1830/2003) that rules are to be drawn up for a system
for the development and allocation of unique identifiers and technical guidelines for the sampling and analysis of GMOs. At the
time of voting these rules had not been put into effect.
 84_trans
At the session on 20.4.2004 of the Standing Committee on Foodstuffs, Austria requested that no new products be admitted until
the interpretation of the provisions on designation and traceability are sufficiently clarified.

95 CRY1F 25
Moreover, the rules on traceability and labelling laid down in Regulation (EC) No 1830/2003 of the European Parliament and of
the Council of 22 September 2003 must apply.

96 NK603 22_trans
Regardless of the scientific reservations expressed above, Austria is fundamentally opposed to the granting of any new
approvals before the planned legislation on the traceability and labelling of GMOs and on the approval and labelling of GM
food and feed is adopted and comes into force.
 23_trans
With regard to live GMOs, it should also be borne in mind that such products must be approved in accordance with the
Directive on the release of GMOs and that the application must be considered to be covered by the moratorium. Denmark thus
objects to the approval of this product ...
 24_trans
Given that the two regulations can be expected to enter into force fairly soon, it would seem appropriate to no longer take any
decisions approving the introduction of genetically modified foods onto the market ...
 24_trans
In the German Government's view, the effective moratorium on approval for genetically modified organisms will be lifted by
the Commission once the regulations on the approval and traceability/labelling of genetically modified foods and feeding stuffs
have entered into force.
 27
The French Authorities recall their position that, before any authorization, there must be legal and technical means whereby the
traceability and labelling of GMOs and GMO-derived products can be ensured.

97 GM 2-28 26
Our conclusion now is that the dossiers for the evaluation of green hearted chicory and radicchio rosso for market authorisation
under Regulation 258/97 are a kind of a "never ending story". The procedure, time, energy and costs are disproportionate
compared to conventional breeding programs. This may lead to the conclusion that development and marketing of transgenic
vegetable crops in the European Union do not have any opportunity.

ANNEX F-2

REPLIES BY THE UNITED STATES
TO ADDITIONAL QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING
11 MARCH 2005

For all parties

170. With reference to EC Directive 2001/18, Annex II, Section C.2.1, please indicate for each
of the listed potential adverse effects of GM Os whether measures applied to prevent or
minimise such effects fall within the scope of A nnex A(1) of the SPS Agreement, and if so, why.
The parties are also invited to address Section D with the same question in mind.

1. As the United States has previously noted, 1 it not necessary for the Panel to determine that
every potential risk evaluated under Directive 2001/18 falls within the scope of the SPS Agreement.
The Agreement makes clear that "any measure" applie d to protect against one of the enumerated risks
falls within the scope of the SPS agreement. More over, the EC has acknowledged that at least some
of the potential risks that Directive 2001/18 was intended to address fall within the scope of the
Agreement.2

2. Nonetheless, in the context of th e products at issue in this dispute
, the majority, if not all, of
the endpoints referenced in Annex II C.2.1 would fa ll within the scope of th e risks enumerated in
Annex A(1) of the SPS Agreement.3

 -disease to humans including allergenic or toxi c effects (see e.g. items IIA(11) and IIC(2)(i) in
Annex IIIA, and B(7) in Annex IIIB);

3. While the United States would not typically c onsider toxic and allergenic effects to be
diseases, measures taken to address concerns that a biotech plant might cause disease to humans
would appear to fall squarely within the scope of paragraph 1(c)–"to protect human life or
health...from risks arising from diseases carried by...plants or products thereof."

4. To the extent allergenic a nd toxic effects are not considered to be diseases, such concerns
would still fall within paragraph 1(c). Because the Directive does not address the safety from the
human consumption of biotech food, the United States assumes that this relates to any toxic or allergic
effects arising from occupational or residential ex posures. These would be "risks to human health
arising from the entry, establishment or spread of pests." As the United States has previously
explained, the ordinary meaning of the term "pest" is "any thing or person that is noxious,

1 US Answers to Questions Posed in the Context of the First Panel Meeting, Q. 49.
3 Because the Directive is intended to encompass a much wider variety of products than are relevant to
this dispute (e.g., genetically modified insects or micr obes), the effects listed in these sections are extremely
broad, and there is consequently, some degree of ambiguity. In general, the United States has attempted to
address the effects in the context of the products at issu e in this dispute, rather than speculate on all of the
possible adverse effects that might be encompassed with in the categories, and the degree to which they might
fall within Annex A.

destructive, or troublesome."
4 Any plant responsible for causing allergic or toxic effects in any
person exposed to it would certainly qualify as "destructive" or "troublesome."

 disease to animals and plants including toxi c, and where appropriate, allergenic effects (see
e.g. items IIA(11) and IIC(2)(i) in Annex IIIA, and B(7) and D(8) in Annex IIIB);

5. This would appear to fall squarely within th e scope of paragraph1(a), irrespective of whether
toxic and allergenic effects are considered to be diseases. Whether one considers the biotech plants as
"disease-carrying or disease-causing" or as pests, the risks would fall squarely within paragraph 1(a)
as "risks arising from the entry, establishment, or spread of pests, diseases, disease-carrying
organisms, or disease-causing organisms."

 effects on the dynamics of populations of speci es in the receiving environment and the genetic
diversity of each of these populations (see e.g. items IVB(8), (9) and (12) in Annex IIIA);

6. Any damage that a biotech plant could cause to population dynamics or genetic diversity
would typically occur due to alterations in the inv asiveness or persistence of a certain plant species,
thereby causing changes in the relative abundances of different plant species that may secondarily
have a negative impact on animal life. Such chang es, should they occur, would be caused by the new
plant species (i.e., the biotech plant), or its hybrid progeny, establishing or spreading into new areas
and outcompeting and displacing wild flora thereby potentially altering the availability of resources
such as food and shelter used by wild fauna. As the United States has previo usly noted, such plants
would be a weed, and thus fall within the definition of a pest, pursuant to footnote 4. Accordingly,
measures taken to address such concerns would fall within paragraph 1(a), as measures taken to
protect animal or plant life or health from "risks arising from the entry, establishment, or spread of
pests." The intended breadth of the covered risks is confirmed by Footnote 4, which specifies that, for
purposes of the definitions in Annex A, "'animal' in cludes fish and wild fauna; 'plant' includes forests
and wild flora."

 altered susceptibility to pathogens facilitating the dissemination of infectious diseases and/or
creating new reservoirs or vectors;

7. As a general matter, based solely on the gene ral description, this endpoint would appear to
fall squarely within either paragra phs 1(a) or (c). To the extent the measure was adopted to protect
animal or plant life or health, the risk would appear to arise from "the establishment of disease-
carrying organisms, or disease-causing organisms," and would fall within the scope of paragraph 1(a).
If, however, the concern related to human health, th e measure would appear to fall within paragraph
1(c).

8. Alternatively, in the context of the products at issue, the question of whether the plant has the
potential to alter the susceptibility to pathogens or to create new vectors, is something that the IPPC
typically considers in determining whether an organi sm could be considered a pest. For example, in
ISPM 11, Pest Risk Analysis for Quarantine Pests, including Analysis of Environmental Effects and
Living Modified Organisms, Annex 3 specifically include the following as potential phytosanitary
risks for LMOs:

4 The Compact Oxford English Dictionary, Oxford University Press, 24th Printing, 1971, page 2145
(Ex. US-121).

b. Adverse effects of gene flow or gene transfer including, for example:
 – transfer of pesticide or pest r esistance genes to compatible species
– the potential to overcome existing reproductive and
recombination barriers resulting in pest risks
– potential for hybridization with existing organisms or
pathogens to result in pathogenicity or increased
pathogenicity.
c. Adverse effects on non-target organisms including, for example:
– changes in the host range of the LMO, including the case
where it is intended for use as a beneficial control agent or
organism claimed to be beneficial
– effects on other organisms, such as biological control agents,
beneficial organisms, or soil fauna and microflora, nitrogen-
fixing bacteria, that result in an phytosanitary impact
(indirect effects)
 – capacity to vector other pests

– negative direct or indirect effects of plant-produced
pesticides on non-target organisms beneficial to plants."5
Consequently, these risks fall within paragraph 1(a) as risks to plant health arising from pests.

 compromising prophylactic or therapeutic medical, veterinary, or plant protection
treatments, e.g. by transfer of genes conferri ng resistance to antibiotics used in human or
veterinary medicine (see e.g. items IIA(11) e) and IIC((2)(i)(iv) in Annex IIIA);

9. The relevant risks described by the above pa ragraph would primarily relate to concerns to
human and animal health arising from the presence of the antibiotic resistance marker genes in the
plants.

10. As the United States has previously explaine d, the risks the EC has raised relating to
antibiotic marker genes generally fall within para graph 1(a). The concern described is that the
antibiotic resistance gene could be transferred from the plant to a human or animal pathogen. For an
animal infected with the pathogen that would ordina rily be treated with the antibiotic to which the
pathogen had become resistant, the transfer of the resistance gene would contribute to the
establishment and spread of disease--the disease caused by the now resistant pathogen.

11. Additionally, the antibiotic resistance gene fa lls within the definition of an additive under the
SPS Agreement. As such, protection against any associ ated human or animal health risks, such as the
transfer of antibiotic resistance to human or animal pathogens that the antibiotics would be used to
treat, falls within paragraph 1(b).

5 ISPM 11, Pest Risk Analysis for Quarantine Pests, including Analysis of Environmental Effects and
Living Modified Organisms, at 36 (emphasis added) (Ex. US-123).

12. The reference to "compromising plant prot ection treatments" also appears to indicate a
concern that a biotech plant might compromise the u se of various pesticide or herbicides. The most
likely concern would relate to the development of pesticide resistance. As the United States has
previously explained
6, such risks would generally fall within the scope of paragraph 1(a).

 effects on biogeochemistry ( biogeochemi cal cycles), particularly carbon and nitrogen
recycling through changes in soil decomposition of organic material (see e.g. items IIA(11) f)
and IVB(15) in Annex IIIA, and D(11) in Annex IIIB).

13. As Dr. Andow described, biogeoc hemical cycles relate to the environmental fate of individual
chemical elements in the environment–how these chemicals, which are generally plant nutrients, cycle
through the environment. These are of concern, a nd particularly the ones explicitly referenced above,
primarily because they could affect the availability of nutrients to plants, which is relevant to plant
health. In addition, changes in these cycles can indicate that there have been effects or changes in soil
microorganisms. Although the experts' testimony confirmed that there is no evidence that biotech
crops affect biogeochemical cycles, concerns that biotech plants might alter biogechemical cycles
would generally fall within the scope of paragraph 1(a) as risks arising from pests.

14. The Panel also requested that the parties comme nt on the effects listed in Annex II, section D;
section D.1 applies only to "GMOs other than higher plants," and as none of the products at issue in
this dispute fall within this category, there is no need for the Panel to reach this question. Section D.2,
relating to the effects of higher plants, lists nine potential endpoints to be addressed as part of an
environmental safety assessment.

15. Section D.2, relating to the effects of highe r plants, lists nine potential endpoints to be
addressed as part of an environmental safety assessment.

 1. Likelihood of the GMHP becoming more persistent than the recipient or parental
plants in agricultural habitats or more invasive in natural habitats.

 2. Any selective advantage or disadvantage conferred to the GMHP.

 3. Potential for gene transfer to the same or other sexually compatible plant species
under conditions of planting the GMHP and any selective advantage or disadvantage
conferred to those plant species

16. The first three points would primarily relate to the potential for the plant to become invasive
or weedy. The Agreement explicitl y provides that pests include weeds
7, and measures applied to
address such concerns would generally fall within th e scope of paragraph 1(a) as a measure to protect
plant life or health from risks arising from the entry, establishment or spread of pests. It is also
theoretically possible that the risks would fall within the scope of paragraph 1(c), depending on
whether the biotech plant presented a hazard to human or animal health.

 4. Potential immediate and/or delayed en vironmental impact resulting from direct and
indirect interactions between the GMHP and target organisms, such as predators,
parasitoids, and pathogens (if applicable).

6 US Answers to Questions Posed in the Context of the First Panel Meeting, Response to Q. 75,
paras. 103-107.
7 SPS Agreement, Annex A, note 4.

 5. Possible immediate and/or delayed en vironmental impact resulting from direct and
indirect interactions of the GMHP with non-target organisms, (also taking into account
organisms which interact with target organisms), including impact on population levels of
competitors, herbivores, symbionts (where applicable), parasites and pathogens.

17. These two concerns relate to direct and indirect effects on non-target organisms caused by the
biotech plant. Measures taken to address such eff ects would generally fall within paragraph 1(a) as
measures to protect animal life or health from the establishment of pests.

 6. Possible immediate and/or delayed effe cts on human health resulting from potential
direct and indirect interactions of the GMHP and persons working with, coming into contact
with or in the vicinity of the GMHP release(s).

18. Measures taken to address an y risks from occupational or residential exposure to the biotech
plants would generally fall with in paragraph 1(c), as measures "to protect human life or health...from
risks arising from...the establishment or spread of pest s." In addition, to the extent the concern relates
to the presence of the Bt toxin/pesticidal substance in the plan t, the measure would fall within para
1(b) as a "measure to protect human life from a risk arising from...a contaminant in foods."

 7. Possible immediate and/or delayed effect s on animal health and consequences for the
feed/food chain resulting from consumption of th e GMO and any products derived from it if it
is intended to be used as animal feed.

19. Concerns relating to effects on animal health resulting from the consumption of feed derived
from a biotech plant would generally fall within the sc ope of paragraph 1(b). This would also include
any effects on the feed/food chain, which could relate to concerns that the biotech feed would contain
contaminants or toxins that would pass through the animal and remain in the meat or milk.

 8. Possible immediate and/or delayed e ffects on biogeochemical processes resulting
from potential direct and indirect interacti ons of the GMO and target and non-target
organisms in the vicinity of the GMO release(s).

20. As discussed in other responses, measures take n to address concerns that a biotech plant may
adversely affect biogeochemical processes or non-target organisms, either directly or indirectly,
would generally fall within paragraph 1(a).

 9. Possible immediate and/or delayed, direct and indirect environmental impacts of the
specific cultivation, management and harvesting techniques used for the GMHP where these
are different from those used for non-GMHPs.

21. These are specific examples of potential indirect effects of biotech crops, and as such, would
generally fall within the scope of paragraphs 1(a) or (c), relating to risks arising from pests.

171. In Japan - Apples, the Appellate Body in terpreted Article 5.7 of the SPS Agreement and
notably the phrase "in cases where relevant scientifi c evidence is insufficient". It stated at
para. 179 that:

Article 5.1 [...] informs the other provisions of Article 5, including Article 5.7.
We note, as well, that the second sentence of Article 5.7 refers to a "more
objective assessment of risks". These contextual elements militate in favour of a

link or relationship between the firs t requirement under Article 5.7 and the
obligation to perform a risk assessment under Article 5.1: "relevant scientific
evidence" will be "insufficient" within the meaning of Article 5.7 if the body of
available scientific evidence does not allow, in quantitative or qualitative terms,
the performance of an adequate assessm ent of risks as required under Article
5.1 and as defined in Annex A to the SPS Agreement. [...] The question is
whether the relevant evidence [...] is sufficient to permit the evaluation of the
likelihood of entry, establishment or spread of, in this case, fire blight in Japan.
In this regard, please answer the following questions:

 (a) Is there a reason to believe that a lack of relevant scientific evidence could
prevent a Member from performing a risk assessment "as required under
Article 5.1 and as defined in Annex A to the SPS Agreement"? Or is it rather a
question of that Member perhaps being unable, due to the insufficiency of
scientific evidence, to conduct a fully obj ective risk assessment, such that any
measure based on that assessment migh t be maintained without sufficient
scientific evidence?

 (b) Does the phrase "more obj ective assessment of risks" in Article 5.7 support the
view that a provisional measure adopted in accordance with Article 5.7 must be
based on risk assessment, as required by Article 5.1? (Canada may wish to
elaborate further on what it has alread y said in its supplementary rebuttal in
relation to this point.)

22. This question pertains to the relationshi p between the following phrases used in the SPS
Agreement:

 (1) "assessment of ... risks" (Article 5.1) and "risk assessment" Annex A(4);

 (2) "cases where relevant scientific evid ence is insufficient" (Article 5.7); and

 (3) "more objective assessment of risk" (Article 5.7).

23. The Appellate Body in the above quote from Japan – Apples explicates the relationship
between (1) assessment of risk/risk assessment, as those phrases are used in Article 5.1 and Annex A;
and (2) "insufficient" scientific evidence as used in Article 5.7. The key statement is as follows:

These contextual elements militate in favour of a link or relationship between the first
requirement under Article 5.7 and the oblig ation to perform a risk assessment under
Article 5.1: "relevant scientific evidence" will be "insufficient" within the meaning of
Article 5.7 if the body of available scientif ic evidence does not allow, in quantitative
or qualitative terms, the performance of an adequate assessment of risks as required
under Article 5.1 and as defined in Annex A to the SPS Agreement.8
24. The first sentence in Question 171(a) above – "Is there a reason to believe that a lack of
relevant scientific evidence could prevent a Member from performing a risk assessment "as required
under Article 5.1 and as defined in Annex A to the SPS Agreement"? – is largely consistent with the
Appellate Body's explication as set out above. It is important, however, to clarify that the question is

8 Japan – Apples, para. 179.

not whether the evidence is suffi cient to perform a risk assessmen t in the abstract. Rather, the
pertinent question is whether the evidence is suffi cient for a Member to meet its obligation of
performing a risk assessment in relation to the sp ecific risk at issue. Or, as the Appellate Body
summarized the issue above, was the evidence sufficient to perform an "adequate" risk assessment, as
required under Article 5.1 and as defi ned in Annex A. So, for example, in light of the fact that the
measure at issue in the Apples case was intended to st op the spread in Japan of fire blight (a plant
disease), the Appellate Body explained that:

Thus, the question is not whether there is sufficient evidence of a general nature or
whether there is sufficient evidence relate d to a specific aspect of a phytosanitary
problem, or a specific risk. The question is whether the relevant evidence, be it
"general" or "specific", in the Panel's parl ance, is sufficient to permit the evaluation
of the likelihood of entry, establishment or spread of, in this case, fire blight in
Japan.
9
25. The second sentence in Question 171(a) above – "Or is it rather a question of that Member
perhaps being unable, due to the insufficiency of sci entific evidence, to conduct a fully objective risk
assessment, such that any measure based on that ass essment might be maintained without sufficient
scientific evidence?" – is somewhat inconsistent with the Appellate Body's explication as set out
above. As noted, the question is whether the evid ence is sufficient for the Member to perform an
adequate risk assessment, as requi red under Article 5.1 and as defined in Annex A. The term "fully
objective risk assessment" is not used in the SPS Agreement, and the meaning of this phrase is
uncertain. In addition, the second part of the a bove question – such that any measure based on that
assessment might be maintained without sufficient scientific evidence – is incomplete. Article 5.7
applies where the scientific evidence is not sufficient for the Member to complete an adequate risk
assessment, as required under Article 5.1 and as defined in Annex A. However, the measure must still
be based on "available pertinent information," a nd the Member must also meet the additional
requirements in the second sentence of Article 5.7.

26. With regard to Question 171(b), the United States does not agree that " the phrase 'more
objective assessment of risks' in Article 5.7 support[ s] the view that a provisional measure adopted in
accordance with Article 5.7 must be based on risk assessment, as required by Article 5.1 ". As noted
above, the Appellate Body explained that "insufficien t" scientific evidence, as used in Article 5.7,
means "insufficient" scientific evidence for a Memb er to perform an adequate risk assessment, as
required under Article 5.1 and as defined in Annex A. Since a precondition for the application of
Article 5.7 is the insufficiency of evidence for an adequate risk assessment, it would not make sense
to conclude that a provisional measure under Article 5.7 must nonetheless be based on a risk
assessment (as required under Article 5.1 and as defined in Annex A to the SPS Agreement).
However, a measure under 5.7 cannot be adopted on an arbitrary basis. To the contrary, Article 5.7
explicitly provides that a provisional measure must be adopted on the basis of "available pertinent
information."

27. In Japan – Agricultural Products , the Appellate Body addressed the interpretation of "more
objective assessment of risk," as used in Article 5.7:

Neither Article 5.7 nor any other provisi on of the SPS Agreement sets out explicit
prerequisites regarding the additional info rmation to be collected or a specific
collection procedure. Furthermore, Article 5.7 does not specify what actual results
must be achieved; the obligation is to "seek to obtain" additional information.

9 Id.

However, Article 5.7 states that the additiona l information is to be sought in order to
allow the Member to conduct "a more objec tive assessment of risk". Therefore, the
information sought must be germane to c onducting such a risk assessment, i.e., the
evaluation of the likelihood of en try, establishment or spread of, in casu , a pest,
according to the SPS measures which might be applied. We note that the Panel found
that the information collected by Japan do es not "examine the appropriateness" of the
SPS measure at issue and does not address th e core issue as to whether "varietal
characteristics cause a divergency in quaran tine efficacy". In the light of this
finding, we agree with the Panel that Jap an did not seek to obtain the additional
information necessary for a more objective risk assessment.10
As confirmed by the above interpretation, Article 5.7 does not call for a "fully objective" risk
assessment. Rather, Article 5.7 uses the term "more objective assessment" to highlight that a Member
applying an Article 5.7 provisional measure has an ongoing obligation to seek to obtain more and
better information that is germane to performi ng an adequate risk assessment, as required under
Article 5.1 and as defined in Annex A.

172. Annex A(1) of the SPS Agreement sugg ests that "approval procedures" are SPS
measures. When a Member decide s to delay the completion of such an approval procedure for
a number of days, would such action be another SPS measure within the meaning of
Annex A(1), or would such action rather need to be characterized as an application of an SPS
measure (the application of the approval procedure)?

28. This question addresses the analysis to be used under the SPS Agreement of a Member's
decision "to delay the completion of an approval pr ocedure." The United States submits that in the
context of the facts and circumstances of this disp ute, such a decision to delay completion of approval
procedures should be analyzed both:

 (1) under the provisions of Annex C, incl uding the "undue delay" provision of
Annex C(1)(A); and

 (2) as a distinct SPS measure that must be consistent both with the obligations in
Annex C of the SPS Agreement and with the obligations outside of Annex C,
including the obligations in SPS articles 2.2, 2.3, 5.1, 5.5 and 7.

29. Annex C Obligations
: Article 8 of the SPS Agreement provides that "Members shall observe
the provisions of Annex C in the operation of control, inspection and approval procedures ... ." 11 A
decision to delay the completion of an approval proce dure fits squarely within Article 8's disciplines
on the "operation of ... approval procedures," including the "undue delay" discipline in Annex C(1)(a).

30. SPS Obligations Outside of Annex C, including Articles 2.2 and 5.1
: The United States has
not contended that a decision to delay the comple tion of an approval procedure for a particular
product for a day, or a week, would amount to a di stinct SPS measure that requires analysis of SPS
obligations outside of Annex C. 12 Rather, the United States submits that a decision to delay
completion of approval procedures for biotech products for an indefinite period of time – in this case

10 Japan – Agricultural Products, AB-1998-9, para. 92 (emphasis added).
11 Question 172 uses the phrase "application of an approval procedure." Given the text of SPS
Agreement Article 8, perhaps a more precise phrasing would be "operation of an approval procedure."
12 Such delays in the operation of approval procedures would, of course, have to be consistent with the
"undue delay" obligation in Annex C(1)(A).

from late 1998 up through at least August 2003 – and wh ich consequently has the effect of preventing
the sale or marketing of new biotech products – am ounts to both a single distinct SPS measure (the
general moratorium) and separate distinct SPS measures for each cove red product (the product-
specific moratoria) and that these measures must meet obligations outside of Annex C.
13 T h e
reasoning is straightforward: a decision to dela y approval procedures for an indefinite period is
effectively equivalent to decision to adopt bans on the import and marketing of all products subject to
the approval procedure. The requirement that pr oduct bans must, for example, not be "maintained
without sufficient scientific evidence" 14 lies at the core of the object and purpose of the SPS
Agreement.

173. May the fact that existing approval legislation does not permit a Member to adopt
certain risk management measures which that Member considers appropriate serve as a
justification, for purposes of an analysis under Annex C(1)(a) of the SPS Agreement, for
delaying approval procedures conducted pursuant to the existing legislation? Are the
provisions of Article 27 of the Vienna Convention on the Law of Treaties relevant to such a
situation?

31. As an initial matter, the United States notes th at it does not accept the premise that any delays
in the EC's processing of biotech applications were due to any need by the EC to adopt additional
legislation authorizing new or different risk manageme nt measures. In fact, this premise is directly
contrary to the EC's own contention that it adopt ed an "interim approach" in 2000, under which
products could be cons idered and approved
 under the legal authority of Directive 90/220 while
applying the (allegedly different) standards of Dire ctive 2001/18 (which did not enter into force until
2003).15 Furthermore, the EC has denied that the EC delayed all final decisions on biotech approvals
until the April 2004 entry into force of the GM Food and Feed and Traceability and Labelling
legislation.

32. As the United States has explained previously, questions of "undue delay" must be
determined on the basis of the facts and circumstanc es of any particular delay. In this case, the EC
has not shown that the moratorium lasting fro m October 1998 through at least August 2003 was
justified by any purported need for additional legisl ation (nor has the EC shown that the moratorium
was justified for any other reason). Likewise, the EC has not shown that any particular delays in
processing applications were delayed by any purported need to await new legislation.

33. Although questions of "undue delay" must be addressed on a case-by-case basis, there is an
important legal principle that is implicated by the Panel's question: the United States submits that a
Member's supposedly inadequate legislation cannot excuse a member from its obligation under
Annex C(1)(A) to undertake and complete approval procedures without "undue delay." A finding to
the contrary would render the "undue delay" obl igation a nullity: a Member could avoid the
obligation to undertake and complete approval proce dures without "undue delay" simply by failing to
take the steps necessary under its domestic law to adopt the necessary legislation.

13 See First US Submission, sections IV(b)(1)(f), (g), (h), and (i) (discussion of general moratorium)
and IV(b)(2)(e),(f), and (g) (discussion of product-specific moratoria).
14 SPS Agreement, Article 2.
15 EC Answers to First Set of Questions, para. 35. Furthermore, as Canada explained in Part II.B.1 of
its Second Written Submission, the EC has entirely faile d to show that Directive 2001/18 was adopted for the
purpose of authorizing additional risk management measures.

34. An analogy to provisional measures under Article 5.7 is also instructive.
16 A decision by a
Member to suspend approval procedures until the Member adopts new legislation has an effect
equivalent to the adoption of a provisional ban on all new products covered by those procedures.
When the drafters of the SPS Agreement consider ed provisional bans, the only circumstance included
in Article 5.7 for the adoption of provisional measures is "in cases where relevant scientific evidence
is insufficient." If inadequate legislation were also considered to be a justification for the adoption of
provisional measures, Article 5.7 could have stat ed "in cases where relevant scientific evidence or
domestic legislation is insufficient." But, of course, Article 5.7 includes no such statement.

35. With regard to Article 27 of the Vienna C onvention on the Law of Treaties, the United States
agrees that the principle set out in Article 27 – namely, that "A party may not invoke the provisions of
its internal law as justification for its failure to perfo rm a treaty" – is relevant for a consideration of
whether inadequate domestic legislation excuses a Member from its WTO obligations. The United
States submits, however, that the principle in Article 27 is already fully reflected in the text of the
WTO Agreement and is confirmed in Appellate Body reports. Accordingly, there is no need to turn to
general principles of international law in orde r to support a finding that inadequate domestic
legislation does not excuse a WTO Member from its WTO obligations.

36. The text of the SPS Agreement explicitly states that SPS measures include "all relevant
laws,"
17 and the Agreement sets out specific obligations with regard to those measures (including a
Member's domestic laws). By imposing obliga tions on "all relevant laws" of a Member, the
Agreement is clear that inadequate laws cannot serve as an excuse for non-performance of SPS
obligations.

37. In addition, in one of its first reports – US – Reformulated Gasoline – the Appellate Body
confirmed that a WTO Member is responsible for the actions of its legislative branch. In that case,
the United States explained that it had adopted the measure at issue (a measure found to be
inconsistent with GATT Article III) because of "di fficulties of verification and enforcement." The
Appellate Body agreed with the Panel that coope rative, non-discriminatory measures were available
to overcome those difficulties. The Appellate Body acknowledged that such cooperative measures
required the US Congress to provide funding, but explained that "of course" this fact did not excuse
the United States from compliance with its GATT obligations:

The fact that the United States Congress might have intervened, as it did later
intervene, in the process by denying fundi ng [for the cooperative verification and
enforcement measures], is beside the point : the United States, of course, carries
responsibility for actions of both the ex ecutive and legislative departments of
government.
18
38. In sum, even if the EC could show that it adopted the moratorium and delayed product
applications in order to await th e legislative enactment of revised SPS legislation, this showing could
not justify a five-year moratorium and resulting delays, or otherwise bring the measure into
compliance with the EC's obligations under the SPS Agreement. The principle that inadequate
legislation does not justify a Member's noncomplian ce with WTO obligations is plainly reflected in
the text of the WTO Agreement and is confirmed in Appellate Body reports.

16 As noted in response to the Panel's Question No. 125, the United States considers that Article 5.7 can
serve as relevant context to be examined in deciding how to apply the "undue delay" provision of Annex C.
17 SPS Agreement, Annex C(1).
18 United States - Standards for Reformulated and Conventional Gasoline, AB-1996-1, at 27.

174. With regard to Article 2.2 of the TBT Agreement:

 (a) Please explain the phrase "the risks no n-fulfilment [of a legitimate objective]
would create" and illustrate using an example.

 (b) Article 2.2 refers to "scientific informat ion" which must be taken into account in
assessing risks. Article 5.2 of the SPS Agreement, on the other hand, refers to
"scientific evidence". Are these different concepts? Why?

39. As the United States has previously shown, and as the EC does not contest, each measure at
issue in this dispute was adopted for at least so me reasons covered within the scope of the SPS
Agreement. This fact brings the measures within the scope of the SPS Agreement, and – pursuant to
Article 1.5 of the TBT Agreement
19 – the TBT Agreement does not appl y to the measures at issue.
Accordingly, the United States respectfully submits that the Panel need not engage in an analysis
under the TBT Agreement of the measures at issue.

175. Are measures applied to ensure co-existen ce of biotech crops and non-biotech crops
covered by Annex A(1) of the SPS Agreement or do they fall, in whole or in part, outside of the
scope of Annex A(1)?

40. As an initial matter, the United States notes th at the EC has not shown or even claimed that
any measures at issue in this dispute are applied so lely to ensure "co-existence" of biotech and non-
biotech crops. The EC has denied even the existe nce of the general and product-specific moratoria,
and the EC has conceded that each of the member State measures was adopted for at least some
reasons that the EC agrees are covered within the scope of the SPS Agreement.

41. Also, the United States notes that the concep t of "co-existence" is not well-defined.
Accordingly, the analysis of whether any particul ar "co-existence" measure would fall within the
scope of the SPS Agreement would turn on the details of the particular measure.

42. However, the United States would make th e following two points on the application of the
Annex A definition of an SPS measure to a hypothetical EC measure addressed only to
"co-existence." In the event that the entry, establis hment or spread of a biotech crop created a risk of
damage to other crops (be they other biotech or non-biotech crops) – by, for example, reducing the
quality of such other crops – such risks would be covered by either Annex A(1)(a) (covering risks to
plant life or health) or A(1)(d) (covering other damage within the territory of a Member). It should be
noted that the United States is not aware of any evid ence that the entry, establishment, or spread of a
biotech crop poses the risk of causing such damage.

43. The United States has serious concerns, however , with the notion that merely mixing biotech
crops with non-biotech crops could amount to a "risk to plant life or health" or to "other damage" –
either as a matter of fact, or for purposes of applyi ng Annex A(1) of the SPS Agreement. Every time
any new crop variety is introduced into a Member, there are possibilities that the new varieties will
mix with existing varieties by mechanisms such as cross-pollination, delaye d germination of the new
seeds in fields subsequently used for existing va rieties, and mixing in handling and transportation
facilities. The United States understands that such mixing normally would not cause "damage" to

19 "The provisions of this Agreement do not apply to sanitary and phytosanitary measures as defined in
Annex A of the Agreement on the Application of Sanitary and Phytosanitary Measures ." TBT Agreement, art.
1.5.

either the new varieties or to the existing varie ties. The United States would need to evaluate
carefully any EC argument to the contrary.

For Argentina, the United States and the European Communities

176. With reference to Austria's safeguard meas ure on Bt-176 maize, please comment on the
reference in exhibit EC-158 att. 7 to insuffi cient labelling requirements laid down in the
Commission Decision relating to the relevant produc t. In particular, what is the basis for the
concern expressed about insufficient labelling (e.g ., food safety, consumer information, etc.),
and how does the labelling issue affect the analys is of whether the Austrian safeguard measure
falls within the scope of the SPS Agreement and/or the TBT Agreement?

44. The Austrian reference to insufficien t labeling requirements is unclear. Since
Regulation 258/97 already included a labeling requirement for biotech foods,
20 Austria's concern is
particularly puzzling.

45. Based on Austria's statement in the cover not e, Austria's rationale for labeling may relate
solely to the provision of information about the method used to produce BT-176 maize, and may not
have any purported rationale based in food sa fety. On the other hand, the accompanying
memorandum also refers to a concern that biotech corn seed will be bred, and that subsequent progeny
will not be labeled, even though they cont ain antibiotic resistance marker genes.
21 To the extent this
was intended to express a concern that the products should be labeled to communicate a potential risk
from the presence of the antibio tic marker, the concern would fall within the scope of the SPS
Agreement–either pursuant to subparagraph 1(a) or (c), depending on the precise nature of the
concern.

46. But ultimately, the reference to concerns re garding the adequacy of labeling does not affect
the conclusion that Austria's safeguard measure fa lls within the scope of the SPS agreement. As
outlined in the accompanying eight-page memorandum, the Austrian safeguard measure was adopted
to address concerns relating to human and animal health risks arising from the presence of the
antibiotic resistance marker gene in the plant, a nd concerns relating to the development of insect
resistance to the Bt toxin. As previously discussed, these
 concerns fall within the scope of the SPS
Agreement–under Annex 1(a) or (b) and under subparagraph (c).

For the United States and the European Communities:

177. At para. 336 of Canada's first writte n submission and paras. 570 and 544-545 of
Argentina's first written submission, the allegation is made that certain member State safeguard
measures are inconsistent with Article 2.1 of the TBT Agreement because imported biotech
products subject to the safeguard measures ar e treated less favourably than like domestic
non-biotech product varieties which may be sold freely in the relevant member States. Do the
United States and the European Communities sh are the interpretation of the concept of less
favourable treatment underlying Argentina's and Ca nada's claims? In answering this question,
please discuss the relevance of para. 100 of the Appellate Body report on EC - Asbestos. If it is
relevant, could the United States and the Euro pean Communities (a) indicate whether they
agree with the interpretation offered at para. 100, and (b) explain in detail how this
interpretation could be applied in practice?

20 Regulation 258/97, Article 8(d).
21 EC Exhibit 158, att. 7, p. 8.

47. The United States respectfully refers the Pa nel to the US response to Question 174 above.

For all complaining parties

178. Please indicate whether the following allege d effects of biotech products fall within any
of the subparagraphs of Annex A(1) of the SPS Agreement:

 (a) Environmental components of biodiversi ty "outside human, animal or plant life
or health, such as the ecological comple xes referred to in the Convention on
Biodiversity" (EC rebuttal, para. 266).

48. It is unclear what effects the above phrase would encompass that would be relevant to the
products at issue in this dispute. A biotech pl ant can only damage biodiversity or the ecological
balance of an area through its ability to adversely aff ect, directly or indirectly, the wild flora or fauna
of the area. And as the United States has previously explained, such effects are generally covered by
paragraph 1(a), as risks to animal or plant life or health "arising from the entry, establishment, or
spread of pests."

49. To the extent this phrase is intended to a ddress the health of the entire web of life in a
particular environment--such as the ecological rela tionship among plants and animals, apart from the
life or health of individual plants and animals--thi s ultimately does relate to life and health of the
members of the individual species within that web, su ch that a particular species or subtype within a
species in a particular environment would not survive.

50. Moreover, the pertinent question is not whet her the SPS agreement covers every conceivable
environmental risk, but whether the risks that the EC has raised with respect to the products at issue in
this dispute, either in whole or in part, fall w ithin the scope of the SPS Agreement. And as the United
States has previously explained, the text of Anne x A clearly encompasses the full range of adverse
environmental effects that a biotech plant might present.

51. Any damage that a biotech plant might cause to biodiversity or the ecological balance of an
area would typically occur due to alterations in th e invasiveness or persistence of a certain plant
species, thereby causing changes in the relative abundances of different plant species that may
secondarily have a negative impact on animal life. Such changes, should they occur, would be caused
by the new plant species (i.e., the biotech plant), or its hybrid progeny, establishing or spreading into
new areas and outcompeting and displacing wild flor a thereby potentially altering the availability of
resources such as food and shelter used by wild fauna . Further, to the exte nt the issue relates to
concerns regarding direct or indirect effects on non-target organisms, the measure would generally
fall within the scope of paragraph 1(a).

 (b) "A predator insect eating another insect because it is itself growing better on a
diet of Bt maize" (EC rebuttal, para. 266).

52. This hypothetical effect is simply a speci fic example of a possible indirect effect of a Bt crop.
To the extent the crop is either directly or indir ectly responsible for an adverse ecological effect, it
would fall within the definition of a pest. Measu res taken to address risks arising from pests fall
squarely within Annex A.

 (c) Human health risks arising from occupational exposure to a substance in a
biotech product that is a toxin for insects (e.g., the Bt toxin) as opposed to risks
arising from the consumption of the biotech product (EC rebuttal, para. 316).

(The United States may elaborate on its response to Panel Question 73 or
comment on the European Communities' response).

53. As the United States originally noted in its response to Panel Question 73, given that footnote
4 clearly identifies pesticide residues as contaminants , such a measure would fall within the scope of
paragraph A(1)(b). In this regard, it should be noted that paragraph A(1)(b) is not limited to the risks
from the "consumption" of contaminants in foodstuffs.

54. In addition, as the United States has noted above in response to these questions, measures
taken to address risks from occupational or residentia l exposure to the biotech plants would generally
fall within paragraph 1(c), as measures "to protect human life or health...from risks arising from...the
establishment or spread of pests."

179. Please comment on the European Communi ties' statement that "for the purposes
specifically of proving a 'moratorium' that ap plies across the board, it does not suffice to
address only a limited selection of product applications" (EC rebuttal, footnote 212).

55. The EC's argument is without merit, and based on two false premises.

56. The first false premise is that the complain ants have defined the general moratorium as a
decision to suspend all processing of all applications, regardless
 of where those applications stand in
the EC's complex approval process. However, as the complainants have explained repeatedly, the
general moratorium was a political decision to prevent any products from reaching the final stage of
approval. Thus, nothing in the theory of the US case requires an examination of each and every delay
for each and every product. Moreover, the fact that some applications made some progress in the
EC's complex approval procedures is entirely consistent with the adoption of a general moratorium on
final approvals.

57. The second false premise is that the complain ants "address only a limited selection of product
applications." This is untrue: the United States has shown that no
 biotech product application under
consideration in the period October 1998 to A ugust 2003 completed the EC's community-level
approval procedures. 22 (Indeed, the EC does not even contest this fundamental fact.) Because the
complainants assert that the general moratorium wa s a decision not to allow any product to reach the
final stage of the approval process, a showing that indeed no product reached a final decision is
precisely the evidence the complainants needed to support complainants' contention that the EC
adopted a general moratorium.

For Canada and the United States:

182. Could Canada and the United States provide examples of why and how allergens in food
can be said to "destroy[] life or injure[] heal th" (US rebuttal, attachment II, para. 27)or
"destroy[] life or impair[] seriously the functions of organs or tissues" (Canada's supplementary
rebuttal, para. 51)?

58. An allergen present in food can cause a variety of symptoms in individuals allergic to that
allergen. Some examples of food allergic reactions include angioe dema (swelling and redness of the
skin), urticaria (itchy hives), allergic rhinitis (runny nose), asthma, and anaphylaxis (a sudden and

22 First US Submission, Part III.C.1.

severe reaction characterized by a sudden drop in blood pressure and breathing difficulties that may
be fatal).
23

For the United States

191. In relation to antibiotic marker gene s, please answer the following questions:

 (a) With reference to para. 22 of atta chment II of the US rebuttal and Codex
standard 192, (i) what is the "technological purpose" for which antibiotic
marker genes are added to food and (ii) in what way does the antibiotic marker
gene become a "component" or "otherwise affect the characteristics" of the food
to which it is added?

59. (Question 191(a)(i)): Antibiotic resistance marker genes are used in the development of
biotech food crops. They aid the developer in isolatin g and amplifying the gene of interest, so that the
gene of interest can be introduced into the plant. In some cases, it may also be used to isolate plant
cells that have incorporated the newly introduced gene of interest. Those plant cells are then used to
generate the bioengineered plant. Thus, the t echnological purpose of antibiotic resistance marker
genes is to aid in the manufacture of the food from the biotech plant.

60. (Question 191(a)(ii)): The marker gene becomes a part of the DNA of the plant, and of food
from the plant. Thus, it is a component of the food from the plant, the addition of which to food for a
technological (including organoleptic) purpose in the manufacture, processing, preparation, treatment,
packing, packaging, transport or holding of such food results, or may be reasonably expected to result
(directly or indirectly), in it or its by-products becoming a component or otherwise affecting the
characteristics of such foods.

 (b) Please comment on the European Comm unities' assertion that "there is concern
about the development of antibiotic resistance in connection with 'plants' as
such" (EC rebuttal, para. 64) and on whether a measure applied to address this
concern would fall within the scope of Annex A(1).

61. As noted in answer to 191(a)(i) above, an antib iotic resistance marker gene can be considered
an additive in foods and feedstuffs, under Annex A(1)(b), and as such, measures applied to address
risks in foods and feedstuffs from such marker genes is covered under Annex A(1). Whether the
European Communities believes that antibiotic resistance marker genes pose additional risks in
"plants as such," and whether those risks are or are not covered by the SPS Agreement, in no way
alters the fact that risks posed by antibiotic resi stance marker genes include risks covered by the SPS
Agreement.

62. However, we would note that the main (if not onl y) risk that can be posed by "the persistence
of plant-derived DNA in the environment during crop cultivation and harvesting, and in soil residues,"
(EC rebuttal, para. 64) such that there could be "concern about the development of antibiotic
resistance in connection with "plants" as such" (EC rebuttal, para. 64) is that resistance will pass to
microbial pathogens that would ot herwise be treatable by the antibiotic at issue if the pathogens
should infect and cause disease in humans or animals. As noted by the food safety expert to the panel,
there is no evidence that such transf er occurs at a biologically significant rate so as to pose a real risk

23 Additional information on food allergy and its impacts on human health can be found in HA
Sampson. Food allergy Part 1: Immunopathogenesis and Clinical Disorders, J Allergy Clin Immunol 1999;
103:717-28, attached to these responses as Exhibit US-149.

to life or health of plants or animals. However, whatever risk is posed would be posed similarly from
food on the plant and from parts of the plant that are not used as food. We would further note that
animals eat almost all parts of the crops at issue in this dispute. Therefore, there is little real
distinction for the purposes of this discussion between "plants as such" and "food from plants."

192. With reference to paras. 16 and 17 of th e US supplementary rebuttal, please clarify
whether a measure applied to protect against ri sks to wild fauna from increased use of the
herbicide associated with a biotech crop or another herbicide, due to the development of
herbicide resistance, falls within the scope of Annex A(1) of the SPS Agreement. If so, please
indicate the relevant subparagraph.

63. A measure applied to protect against risks to wild fauna from increased use of an herbicide in
the circumstances described above would fall within the scope of Annex A( 1), subparagraph (a)–a
measure to protect "animal ... life or health ... fro m risks arising from the en try, establishment, or
spread of pests."

64. In the circumstances described in paragraphs 16 and 17 of the US rebuttal, the pest against
which the measure was directed would be the herbicid e resistant crop. As previously explained, the
phrase, "arising from" does not require that the risk be direct or immediate. The critical question is
whether the risk results from the presence of the organism, and in the scenarios described in
paragraphs 16 and 17, the risks "arise from" the organism in that it is the presence of the organism that
triggers the necessary sequence of events. Here, th e herbicide resistant crop would ultimately be
responsible for any increased potential for risks to an imal life or health that resulted from either the
increased use of an herbicide, or the applica tion of a more toxic alternative, because the
herbicide-resistant crop would have been responsible for the need to apply the additional herbicide.

193. With reference to paras. 62 and 63 of the US supplementary rebu ttal, did the United
States submit evidence that the UK supported th e alleged moratorium at the time it completed
its initial assessment of GA21? If not, what is the basis for the assertion that the alleged inaction
by the UK was "politically motivated"?

194. With reference to paras. 52 and 59, 102-103, 159, 168 and 195-196 of the US
supplementary rebuttal, did the United States su bmit evidence that the Netherlands supported
the alleged moratorium at the time at issue in the aforementioned paragraphs?

195. With reference to paras. 72, 95, 150-151 an d 190 of the US supplementary rebuttal, did
the United States submit evidence that Spain suppo rted the alleged moratorium at the time at
issue in the aforementioned paragraphs?

65. (Combined response to questions 193, 194, and 195) : In its prior submissions, the United
States has submitted overwhelming evidence of the ex istence of the de facto moratorium. Such
evidence consisted of, inter
 alia , statements from EC member States and EC officials that openly
acknowledged a general moratorium on the approval of biotech products. And, as the United States
has detailed in its prior answer to Panel's ques tion 151, the EC's own evidence provide numerous
additional examples of EC member States confirming the existence of the moratorium. That evidence
includes numerous examples of countries other th an the above five "moratorium countries"
acknowledging the moratorium and even stating thei r support for the moratorium. For example, EC
Exhibit 92, attachment 24_trans, provides:

In the German Government's view, th e effective moratorium on approval for
genetically modified organisms will be lifted by the Commission once the regulations

on the approval and traceability/labelling of genetically modified foods and feeding
stuffs have entered into force.
66. Spain likewise recognized the moratorium. For example, in EC Exhibit 73, attachment 12,
the Spanish authority stated: "Sin embargo, en el año 1999 se votaron ambos expedientes y no se
alcanzó la mayoría cualificada, quedando pendientes y paralizados durante la moratoria de facto."

67. Such statements against interest are particular ly compelling evidence. In this regard, at least
Austria, France, Belgium, Germany, Spain, Italy, Luxembourg, Denmark, Sweden, and the
Commission have all made statements or made reference to the fact that a moratorium existed. As the
United States said in its oral statement at the second s ubstantive meeting of the panel, it is only in the
context of this case that the EC denies the existence of a moratorium.

68. In its supplementary rebuttal, the United St ates has complemented th is core evidence with
further examples, culled from the information s ubmitted by the EC during the course of this
proceeding, of various actions by member States that resulted in undue delay, were wholly consistent
with the moratorium, and reflected the impact of the moratorium. When assessed within the context
of all the prior evidence Complainants have already provided, these numerous examples of
unexplained delays and gaps across the spectrum of biotech applications, and of unjustified requests
for additional data, serve to further confirm the mo ratorium's existence and to confirm that biotech
applications were unduly delayed. As the United St ates stated in its supplementary rebuttal, once the
EC had made a political-level decision to adopt a moratorium on biotech approvals, EC and member
State regulators understandably were in no hurry to process pending biotech applications.

69. Thus, for example, in paragraphs 62 and 63 of its supplementary rebuttal, the United States
pointed out a 7 month delay by the UK competent authority in forwarding the application on to the
Commission after the UK authority had reached a pos itive safety assessment on the product at issue.
Many EC member States, including the UK, are di vided internally on their position related to
biotechnology. On the one hand, elements of the UK government have been supportive of
agricultural biotechnology. On the other hand, cer tain political figures are not supportive. In
particular, the UK Environment Minister at the ti me of the delay in question was Michael Meacher,
and Mr. Meacher was and is strongly opposed to the introduction of genetically modified foods in the
UK.
24 Thus, such examples show that countries ot her than the "moratorium countries" allowed the
moratorium to continue, recognized its political rea lity, and that this reality at times affected the
manner in which they conducted their assessments of biotech applications.

196. With reference to para. 38 of the European Communities' second oral statement, does
the United States agree that the assessment of a hybrid cannot be concluded as long as the
assessment of one of its parental lines is still op en, such that a competent authority would be
justified in awaiting the outcome of the missing assessment?

70. No, the United States does not agree. 25 The general approach to assessing the safety of a new
plant variety developed through biotechnology is to perform a molecular characterization, a safety

24 See attached Exhibit US-150 (a rticle by Mr. Meacher comparing his anti-biotech stance with the
more pro-biotech stance of "the Pr ime Minister, ministers on the rele vant cabinet sub-committee, Defra
officials, and the Government's chief scientific advisers.")
25 The United States also notes that the above assertio n by the EC appears to be inconsistent with the
EC's positions as stated during the meeting with the expert s. In particular, at the experts' meeting, the United
States understood the EC to be asserting that a de novo safety evaluation of hybrids was necessary even if the
parental lines had been favorably assessed.

assessment of any newly expressed substances, and compositional analysis. The compositional
analysis consists of a comparison of the levels of key compositional components (e.g., key nutrients,
key anti-nutrients, and key toxicants) of the new va riety with those of conve ntional varieties of the
same crop. One way that is often done is to compar e the composition of the new variety with that of
its parents. However, if the safety of one or both of the parental varieties has not been established for
use as a comparator, one might use other closely related lines. For example, para. 44 of the Codex
Plant Guideline (CAC/GL 45-2003) states: "The comp arator(s) used in this assessment should ideally
be the near isogenic parental line. In practice, th is may not be feasible at all times, in which case a
line as close as possible should be chosen."

197. For the purposes of demonstrating the existe nce of the European Communities' alleged
failure to consider specific biotech products for approval ("product-specific moratoria"), is the
United States seeking to rely on the evidence and argument adduced in support of the existence
of a general moratorium? In other words, is th e United States arguing that the existence of a
general moratorium necessarily implies the exis tence of product-specific moratoria? Please
clarify.

71. The United States submits that the EC has adopted a general moratorium on biotech
approvals, under which no biotech application was al lowed to reach final decision up through August
2003 (the time of the establishment of the Panel) . Since the general moratorium applied to all
products, a necessary corollary is that the EC also a dopted product-specific moratoria on each of the
product applications covered in the US panel request. 26 Thus, the evidence and arguments that the
United States adduced in support of the existence of a general moratorium also establish the existence
of the product-specific moratoria, and that the EC did not under take and complete its approval
procedures for each individual product without "undue delay."

72. In addition, the evidence and arguments a dduced by the United States include examples of
unwarranted delays in the processing of particular applications,
27 as well as delays specifically arising
from scientific questions posed by member States that were not required for completion of the EC's
approval procedures. 28 Such evidence and arguments, like the non-product-specific evidence and
arguments adduced by the United States, serves tw o purposes. First, the showing of particular,
product-specific delays is further confirmation of th e existence of the general moratorium, and rebuts
the EC's contention that all applications subject to the moratorium were processed normally and
without undue delays. Second, the showing of pa rticular, product-specific delays provides further
confirmation of the existence of the product-specifi c moratoria, and establishes specific instances of
"undue delay" for those particular products.

26 As the United States noted previously, the United States is not requesting findings on the
product-specific moratoria for appli cations that were withdrawn prior to the establishment of the Panel in
August 2003.
27 See, e.g., US Rebuttal Submission, Part V.A; US Supplementary Rebuttal, Part III.
28 See US Supplementary Rebuttal, Part IV.

ANNEX F-3

COMMENTS BY THE UNITED STATES ON THE REPLIES
OF THE EUROPEAN COMMUNITIES TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING
18 MARCH 2005

1. The United States appreciates this opportuni ty to comment on the EC's responses to the
questions posed by the Panel in connection with th e second substantive meeting. Many of the points
raised by the EC have already been addressed by the United States in prior oral and written
submissions, or are not relevant to the resolution of this dispute. In the responses below, the United
States will focus on new points raised by the EC that are pertinent to the resolution of this dispute and
which have not been addressed in prior US submissions.
For all parties

119. With reference to exhibit US-123 (reproduced at para. 9 of attachment II of the US
rebuttal), do the references in ISPM 11 to "indirectly affect plants … by other processes such as
competition" (page 34) and "significant reduction, displacement, or elimination of other plant
species" (page 19) support the view that the term "injurious" in the IPPC definition of "pest"
("any species, strain or biotype of plant, animal, or pathogenic agent, injurious to plants or
plant products") should be given a broad interpretation?

2. Generally, the EC responses that concern the scope of the SPS agreement present few issues
that have not already been fully addressed in prev ious filings. Of these, the United States will focus
primarily on two overarching points, before addressing some of the individual arguments.
3. First, the EC acknowledges that many of the ri sks alleged to be relevant to this dispute fall
within the SPS agreement.
1 Consequently, the Panel does not need to engage in a sweeping
examination of whether every risk the EC has raised falls within the scope of the SPS Agreement.
The SPS Agreement explicitly provides that "any me asure" applied to protect against one of the
enumerated risks falls within its scope. The Ag reement does not require that an SPS measure be
exclusively applied to protect against enumerated risks.
4. The second point relates to the EC's repeated attempts to confuse the question before the
Panel by arguing that "biodiversity and environmen tal issues do not fall within the scope of the SPS
agreement."2 This argument attempts to create an ar tificial distinction between effects on the
environment and biodiversity in the abstract, and the specific effects on biodiversity and the
environment that the EC has alleged are relevant to the products at issue in this dispute.
5. While it is clear that, as a general matter, th e text of the Agreement does not support the EC's
categorical exclusions of "risks to biodiversity and the environment," the Panel need not reach the
question of whether the SPS Agreement covers all envi ronmental risks to resolve this dispute. Even
assuming some need to examine whether individual risks fall within the scope of Annex A, the
pertinent question is whether the risks the EC has id entified as relevant to th is dispute, based on the
characteristics of the products at issue, fall with in the risks in Annex A, not whether the SPS
Agreement generally covers every conceivable environmental risk. Thus, for example, the Panel need

1 EC Answers of March 11, 2005, paras. 1-52.

not find that all risks to non-target organism s are necessarily covered under the SPS Agreement in
order to conclude that any risks to soil microorgani sms from a biotech plant falls within the ordinary
meaning of a risk to animal or plant life or health from a pest, pursuant to Annex A.1(a).
6. Accordingly, the Panel should only consider th e facts presented in this dispute, not the
hypothetical facts the EC has presented. As the Un ited States has previously explained, the specific
environmental effects that the EC has raised fall within the scope of Annex A.
3 And as discussed
more specifically below, none of the EC's responses effectively rebuts this conclusion.
7. A central flaw in the EC categorization of risk s is the EC's inconsistent and illogical treatment
of IPPC and Codex definitions. As the United Stat es has explained, the Panel is to interpret the
Agreement "in accordance with the ordinary meaning to be given to the terms of the treaty in their
context and in the light of its object and purpose." 4 The United States has also explained that
definitions in Codex and IPPC doc uments may be used as additional factual evidence of the ordinary
meaning of terms contained in Annex A of the SPS Agreement, but that IPPC and Codex definitions
cannot control the interpretation of the Agreement. Thus, the point is not that environmental issues
fall within the SPS Agreement because ISPM 11 addresses environmental risks. Rather, the point is
that the ordinary meaning of the SPS Agreement encompasses the specific risks that the EC has
alleged to be relevant–for example, because the term "pest" encompasses organisms that pose both
direct and indirect risks. Consequently, for example, measures adopted to address risks to animal or
plant health arising from changes in the biogeochemical cycles, as a result of the biotech plant, would
fall squarely within Annex A.1(a).
8. With respect to the EC's use of IPPC and Codex definitions, however, no logical, consistent
underlying principle can be discerned from the EC 's responses. For example, the responses
simultaneously argue that the Panel is, in some cases, bound
 by a subset of the IPPC definition: "If a
GMO crop adversely affects the biogeochemical cycle, for example, it is simply not behaving as a
"pest" within the meaning of the IPPC–and in this respect the European Communities also refers to its
answer to question 119. These matters therefor e fall outside the scope of the SPS Agreement." 5 Yet
in other cases, the EC argues it would be "legal error to simply transpose [the IPPC] definition [of a
pest] into Annex A.1 of the SPS Agreement."
6
9. In yet other responses, the EC argues that the Panel may consider "parts of [Codex and IPPC
standards as] relevant context." 7 However, the sole basis the EC articulates for how the Panel is to
determine the "parts" that provide relevant context appears to be whether the EC has any "particular
difficulty" with the standards.8
10. In its most recent submission, the EC raises several objections to consideration of ISPM 11,
attempting to discount the fact that the IPPC's inte rpretation of the term "pest" contradicts the EC's
attempts to rely on the IPPC definition of a pest to support its categorical exclusions. These include
the arguments that ISPM 11 (rev. 2) should be rejected because (1) it post-dates the Panel's
establishment, and (2) that the envi ronmental risks described in ISPM 11 were merely "designed to
reflect the Biosafety Protocol." The EC is wrong on both counts.

3 US Rebuttal Submission, Attachment II; Responses of the United States to the Questions by the Panel
Posed During and After the Second Substantive Meeting with the Parties; Responses of the United States to the
Additional Questions Posed by the Panel on March 4, 2005.
4 Vienna Convention on the Law of Treaties, Article 31(1).

11. First, with regard to the timing of the IPPC document, the IPPC also articulated the
interpretation that the term "pest" applies to organisms that have indirect effects on plants in ISPM 11,
Rev 1
, Pest Risk Analysis for Quarantine Pests In cluding Analysis of Environmental Risk in April
2003, prior to the date the Panel was established. Annex 1 of that document reads:
"COMMENTS ON THE SCOPE OF THE IPPC IN REGARD TO
ENVIRONMENTAL RISKS
"The full range of pests covered by the I PPC extends beyond pests directly affecting
cultivated plants. The coverage of the I PPC definition of plant pests includes weeds
and other species that have indirect effects on plants, and the Convention applies to
the protection of wild flora. The scope of the IPPC also extends to organisms which
are pests because they:
– directly affect uncultivated/unmanaged plants
Introduction of these pests may have few commercial consequences, and therefore
they have been less likely to be evaluate d, regulated and/or placed under official
control. An example of this type of pest is Dutch elm disease ( Ophiostoma novo-
ulmi)
– indirectly affect plants
In addition to pests that directly affect host plants, there are those, like most
weeds/invasive plants, which affect plants primarily by other processes such as
competition ( e.g., for cultivated plants: Canada thistle ( Cirsium arvense ) [weed of
agricultural crops], or for uncultivated/unmanaged plants: purple loosestrife (Lythrum
salicaria) [competitor in natural and semi-natural habitats]).
– indirectly affect plants through effects on other organisms
Some pests may primarily affect other organisms, but thereby cause deleterious
effects on plant species, or plant health in habitats or ecosystems. Examples include
parasites of beneficial organisms, such as biological control agents."
9
12. Similarly, the IPPC document elsewhere makes cl ear that part of the evaluation of whether an
organism is a quarantine pest includes considerati on of both an organism's direct and indirect
effects.10 For example, section 2.3.1.1 "Direct pest effects," provides:
"In the case of the analysis of environmental risks, examples of direct pest effects on
plants and/or their environmental consequences that could be considered include:
– reduction of keystone plant species
– reduction of plant species that are major components of ecosystems (in terms
or abundance or size) and endangered na tive plant species (including effects
below species level where there is evidence of such effects being significant)

9 ISPM 11, Rev 1, Pest Risk Analysis for Quarantine Pests Including Analysis of Environmental Risk
(2003), p. 29 (Ex. US-151).
10 ISPM 11, Rev 1, Pest Risk Analysis for Quarantine Pests Including Analysis of Environmental Risk
(2003), pp. 18-20 (Ex. US-151).

– significant reduction, displacement or elimination of other plant species
The estimation of the area potentially endangered should relate to these effects."
13. The EC also has no basis for its second argument – that the environmental risks described in
ISPM 11 were merely "designed to reflect the Biosafety Protocol." In fact, the earlier, 2003 version
of ISPM 11 (rev. 1) did not even specifically address biotech organisms. Accordingly, there is no
reason to believe that ISPM 11's inclusion of an organism's direct and indirect effects on the
environment related to the adoption of the Protocol.
120. With reference to Annex A(1)(d) of th e SPS Agreement, please answer the following
questions:

(a) What is the meaning of the term "other damage"?
(b) Does the term "other" imply that Annex A(1)(a) through (c) are also
about "damage"? If so, does the term "other damage" cover damage sustained
by plants, animals or humans other than damage to their "life or health"?
Please provide examples.
(c) Is "other damage" limited to damage sustained by plants, animals or
humans? If not, please provide examples.
14. In it answer to Question 120, the EC ag ain makes the unsupported – and unsupportable –
assertion that "environmental damage is not covered by the SPS Agreement."
11 As the United States
previously explained, the SPS Agreement contains no such exclusion of environmental damage. To
the contrary, SPS Agreement specifically provides that for purposes of the definitions in Annex A,
"'animal' includes fish and wild fauna; [and] 'plant' includes forests and wild flora."12
15. In its answer, the EC for the first time cit es to a late 1990 draft text of the SPS Agreement,
and argues that the changes from th at draft to the final SPS text s upports the EC's view regarding a
purported exclusion of environmen tal damage. As an initial matter, the United States notes that
where, as here, the text of the agreement explicitly covers damage to wild flora and fauna, there is no
ambiguity and thus no need to examine negotiating history on whether damage to wild flora and fauna
is covered within the scope of the SPS Agreement. 13 That said, the EC's citation to the negotiating
history is incomplete and misleading, and in no way supports the EC's contention.
16. The EC's citation to the late 1990 draft te xt includes no footnotes, document numbers, or
exhibits.14 However, based on the quotations in the EC submission, the EC is apparently referring to
"Negotiating Group on Agriculture: Working Group on Sanitary and Phytosanitary Regulations and
Barriers; Draft Text on Sanitary and Phyt osanitary Measures," MTN.GNG/NG5/WGSP/7 (20
November 1990). The cover note to this document does include the following language quoted by the
EC: "the brackets in the note to definition 1 an d in definition 4 (Annex A) are all linked to the

12 US Rebuttal Submission, Attachment II.
13 See Vienna Convention on the Law of Treaties, Article 32 ("Recourse may be had to supplementary
means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in
order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the
interpretation according to article 31: (a) leaves the me aning ambiguous or obscure; or (b) leads to a result
which is manifestly absurd or unreasonable.").

question of whether or not this agreement should a pply to measures taken for the protection of animal
welfare and of the environment, as well as of consumer interests and concerns".
17. The EC then goes on to assert "The bracketed text (which included a reference to the
environment) disappeared in the final text of the agreement, as we all know. As a result,
environmental damage per se does not fall under the scope of the SPS Agreement." What the EC fails

to explain, however, is precisely what that "bracket ed text" contained. As a result, and as explained
below, the EC's assertions are completely baseless.
18. The "bracketed text" referred to above is actually two different bracketed phrases. Both of
these phrases are contained in the concluding pa ragraph of the Annex A(1) definition of "SPS
measure" (that is, in the paragr aph following lettered paragraphs a) to d ) – a paragraph which (in its
final form) describes types of measures – such as labelling and quarantines – as opposed to describing
particular types of risks. 15 One of the bracketed phrases would have expressly included animal
welfare, environment, and consumer interests and concerns. 16 The second bracketed phrase would
have expressly excluded those issues.17
19. The final text of the SPS Agreement drops both the proposal for an explicit inclusion and the
proposal for an explicit exclusion of environmental and animal welfare concerns. Thus, contrary to
the EC's assertions, this change is not the least bit instructive on whether the drafters of the agreement
intended to include or exclude environmental issues. On the other hand, this change could support an
interpretation that the drafters decided to leave the last paragraph of Annex A(1) to describe types of
measures (such as labelling and quarantines) and to place the types of covered risks within the lettered
paragraphs a to d.
20. Moreover, the EC does not make note of a more relevant and significant change between the
late 1990 draft text and the final SPS Agreement. The late 1990 draft text did not include footnote 4,
which defines "animal" to include "wild fauna" and "plant" to include "wild flora." The fact that these
clarifications were added to the text means that the issue of environmental damage was in fact
considered by the drafters, and that the drafters purposely and specifically decided to include damage
to wild flora and fauna within the scope of the SPS Agreement. Thus, contrary to the EC's assertions,
the negotiating history of the SPS Agreement provides no support for the EC's contention that the SPS
Agreement was not intended to cover damage to the environment.18

15 That paragraph, in its final form, states "Sanitary or phytosanitary measures include all relevant laws,
decrees, regulations, requirements and procedures includ ing, inter alia, end product criteria; processes and
production methods; testing, inspection, certification and approval procedures; quarantine treatments including
relevant requirements associated with the transport of animals or plants, or with the materials necessary for their
survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk
assessment; and packaging and labelling requirements directly related to food safety."
16 The first bracketed phrase, which followed "packaging and labelling requirements directly related to
food safety" in the concluding paragraph to Annex A(1), was "[measures for the protection of animal welfare
and of the environment, as well as of consumer interests and concerns]." MTN.GNG/NG5/WGSP/7, Annex A
(20 November 1990). This phrase would have explicitly included these issues within the scope of an SPS
measure.
17 The second bracketed phrase was in a new sentence at the end of the concluding paragraph to
Annex A(1): "Requirements concerning quality, compos ition, grading, [consume r preferences, consumer
information, animal welfare, the environment or ethi cal and moral considerations] are not included in the
definition of sanitary or phytosanitary measures." MTN.GNG/NG5/WGSP/7, Annex A (20 November 1990).
18 The EC also asserts that the "negotiating hist ory of the SPS Agreement supports the European
Communities view that Annex A.1 must be interpreted st rictly and not in a broad manner." EC Answers of

For the European Communities

135. In paragraph 52 of the EC Responses to the Questions from the Panel (16 June 2004)
that "Since the late '80s, the EC institutions are required to provide an explanation of the
reasons for not following the opinion of the spec ific scientific committee relevant to the matter
under consideration". Are these explanations made public or provided to the notifier
concerned?

21. The United States notes that the EC answer to this question – "yes" – needs more of an
elaboration than the EC gave in order not to leave a misimpression. In the context of this dispute, the
situation referred to in this question arises when member States continue to oppose approvals of
biotech applications after those applications have received positive assessments by EC-level scientific
committees. As the EC's product histories show , in many cases member States requested more
information without providing any explanations (public or otherwise) for why that member State did
not accept the scientific committee's positive assessment.
22. Perhaps the EC's answer was intended to mean that had
 the EC actually made a final decision
on a biotech application during the period October 1998 through August 2003 – instead of imposing a
moratorium on final decisions – then the EC ins titution involved would have had to issue a reasoned
decision if that decision departed from the view of the EC scientific committee.
136. In the context of paragraph 195 of the EC Responses to the Questions from the Panel
(16 June 2004), does the EC maintain that the appropriate level of protection that might be
relevant to a definitive action is different from the ALOP that would be relevant to a provisional
measure taken in the face of insufficient scientific evidence?

23. The United States has two comments on the EC's response to this question. First, the EC
answer assumes that EC member States and the EC itself have adopted different levels of protection.
However, there is no basis in the record for this assertion by the EC. In fact, when the Panel in
Question 162 asked the EC to elaborate on any suppo sed differences in levels of protection, the EC
did not provide a specific response, and did not e xplain how the EC member States might have a
different level of protection than that adopted by the EC itself. Instead, the EC asserted only that:

March 7, 2005, para. 20. The United States does not agree that the negotiating history supports any such view.
The United States also notes that the EC statement is inconsistent with the EC's own position elsewhere in the
same submission, where the EC states that: "In shor t, the European Communities does not consider that
Annex A.1 of the SPS Agreement should be given either a narrow interpretation or a 'broad' interpretation." EC
Answers of March 7, 2005, para. 12. The most instructive factor in interpreting Annex A(1) is of course the text
itself. In this regard, the United States notes that the text uses inclusive language. In particular, footnote 4 is
drafted to make clear that the definitions in the footnote are inclusive and not limiting:

"animal" includes fish and wild fauna; "plant" includes forests and wild flora; "pests" include
weeds; and "contaminants" include pesticide and veterinary drug residues and extraneous
matter.

Also, paragraph (d), covering "other damage", is plainly a catch-all provision, and undermines any EC
contention that Annex A(1) is to be construed "strictly" or "narrowly."

"It is not possible to describe an 'appropriate level of protection' in general terms. It
is clear from the terms of the above measur es that they seek to secure a high level of
protection."
19
24. Second, the EC seems to be stating that th e appropriate level of protection for provisional
measures may differ from the level of protection fo r other (non-provisional) measures. The United
States fails to see any basis in logic or in the te xt of the SPS Agreement for this assertion. Members
must select an appropriate level of protection, a nd then must ensure that any measures adopted to
meet that level "are not more trade-restrictive th an required to achieve their appropriate level of
sanitary or phytosanitary protection."20
For all parties:

140. With reference to (1) Codex standards 192 and 193, (2) IPPC and (3) ISPM 11:

(a) Are they "rules of international law applicable in the relations between
the parties to this dispute " within the meaning of Article 31(3) of the Vienna
Convention on the Law of Treaties?
(b) May they be used as additional factual evidence of the ordinary meaning
of terms contained in Annex A of the SPS Agreement, as the United States
appears to suggest in its rebuttal at para. 6 of attachment II? (The United States
is invited to provide elaboration on its statement at para. 6.)
25. Please see the above US comments in relation to Question 119.
141. With reference to Annex (B)(1) of th e SPS Agreement, please answer the following
questions:

(a) Does the term "sanitary and phytosanitary regulations" cover
administrative decisions which relate to the operation of approval procedures
and which are generally applicable?
(b) May the phrase "sanitary and phytosanitary regulations which have
been adopted" be interpreted to enco mpass also sanitary and phytosanitary
regulations which have been adopted de facto (e.g., generally applicable
decisions which have been reached informally and which are unrecorded)?
26. The EC's answer to this question – that a measure like the moratorium on biotech approvals
cannot be "adopted de facto" (as the term "de facto" is used in the question) – is completely without
merit. The EC's entire argument is based on th e EC's unsupported assertion that the word "adopted"
connotes some sort of "formal context."
21 The EC has no basis for this assertion. The normal
meanings of the verb "adopt" are to "choose for one's own practice, take up"; or "approve, accept." 22
Nothing in the normal usage of the verb "adopt" entails a "formal context." Thus, the EC has
presented no reason why a measure like the morato rium – which was adopted and applied to all

20 SPS Agreement, para. 5.6.
22 New Shorter Oxford English Dictionary (1993), p. 29.

pending biotech product applications – cannot be "adopted," as that phrase is used in Annex B of the
SPS Agreement.
27. The United States also makes note of the EC's statement that "the European Communities can
only repeat that it is not possible, in the Community ju risdiction, to adopt an act with legal effects that
is 'unrecorded'."
23 This assertion, however, is directly contradicted by the EC's own claim that it
adopted an "interim approach." As the EC d escribed it, under that approach the EC would not
approve products unless those products met standard s of new, yet to be enacted legislation (and
changing approval standards is certainly an act with a "legal effect"). Yet, this approach apparently
went "unrecorded" – it certainly was never published in the EC's official journal nor notified to the
WTO.
144. The Panel notes that a number of products containing the same transgenic modifications
as products at issue in this dispute were prev iously approved by the European Communities
prior to July 1998 (eg, swede rape tolerant to glufosinate ammonium (MS1, RF1) and (MS1,
RF2); swede rape tolerant to glufosinate ammonium (Topas 19/2); maize tolerant to
glufosinate ammonium (T25); maize expressing the Bt cry1A(b) gene (MON 810); maize
tolerant to glufosinate ammonium and expressi ng the Bt cry1A(b) gene (Bt-11); soybean
tolerant to glyphosate; chicory tolerant to glufosinate ammonium; maize Roundup Ready
NK603). To what extent and how were the prev ious assessments of potential risks to human,
animal or plant health and/or the environment associated with these transgenic modifications
taken into consideration in the evaluation of po tential risks arising from the products at issue
before the Panel?

28. The United States notes that it does not agree with the EC's claim that "as explained in
previous EC submissions and confirmed by Dr. Nutt i at the hearing, the understanding of the concept
of substantial equivalence has greatly evolved since 1998."
24 The EC has not established, as it
implies, that "substantial equiva lence [was] recognised to constitute a risk assessment in itself."
Likewise, the United States did not understand Dr. Nu tti to be supportive of this claim, nor did the
United States understand that Dr. Nutti agreed w ith the EC's more general claim that "the
understanding of the concept of substantial equivalence has greatly evolved since 1998."
154. At paras. 27 and 30 of the European Communities' second oral statement, reference is
made to concerns regarding "regulatory requirements outside the scope of this dispute
(traceability and labelling)". Is it the European Communities' view that any delays that may
have occurred as a result of member States invok ing the need for legislation on traceability,
labelling or coexistence were justified? Why?

29. The EC's response to this question is illogical, and lacking in any legal or factual basis. The
EC's entire response is as follows:

"When referring to 'regulatory requireme nts outside the scope of this dispute
(traceability and labelling)' the European Co mmunities was referring to the fact that
the Complainants have not claimed that the requirements relating to traceability and
labelling set out in its GMO legislation were unjustified. Accordingly, delays

resulting from the need to satisfy these requirements cannot be considered to be
"undue" or contrary to the WTO Agreements."
25
30. First, the EC is correct that the United Stat es in this dispute has not taken issue with the
specific requirements contained in the traceability and labelling legislation. However, the EC has not
explained what the relevance of the particular requi rements of such legislation might be to the present
dispute. The traceability and labelling legislati on did not even enter into force until April 2004 –
which is eight months after the terms of reference of this Panel were established. Moreover, the EC
has denied that it delayed any final decisions on product approvals until such legislation entered into
force.

31. Second, to the extent that the EC is arguing that it would be entitled to adopt a moratorium
until traceability and labelling legislation entered into force in April 2004, the United States submits
that such a delay would indeed be "undue" under Annex C of the SPS Agreement. As explained in
the US answer to Question 173 , a Member's supposedly inade quate legislation cannot excuse
 a
member from its SPS obligations, including the ob ligation under Annex C(1)(A) to undertake and
complete approval procedures without "undue delay."

158. In paragraph 313 of the EC Responses to the Questions from the Panel (16 June 2004)
the European Communities states that the absence of final consent from the lead CA does not
mean that the applicant is not entitled to pla ce the product on the market. Has the product at
issue (canola/oilseed rape MS1/RF1 and MS1/RF2) been sold in all of the European
Community, including in France, and if not, why not?

32. It is remarkable that the EC asserts that canola/oilseed rape MS1/RF1 and MS1/RF2 have
been approved for sale in the EC. As the complain ants have explained, the EC deliberate release
legislation clearly provides that the lead competent authority must take the final step of placing the
product on the market.
26 The United States would also note that the Commission's own official status
document on biotech approvals shows that France has failed to take the final step of placing the
product on the market.27

26 Directive 90/220, art 13.4 "(Wh ere the Commission has taken a favourable decision, the competent
authority shall give consent in writing to the notification so that the product shall be placed on the market . . . .);
Id. art. 13.5 (Once a product has received a written consent, it ma y be used without further notification
throughout the Community"). Directive 2001/18 includes comparable provisions. 2001/18, art. 18.2 ("Where a
favourable decision has been taken, the competent authority which prepared the report shall give consent in
writing to the placing on the market . . . ."); Id. art. 19.1 ("only if a written consent has been given for placing on
the market of a GMO as or in a product may that product be used without further notification throughout the
Community ...").
27 Questions and Answers on the Regulation of GMOs in the EU, MEMO/02/160 Rev., Brussels 4
March 2003 (Ex. US-107), at page 14 (MS1/RF1 "not fi nally approved by F"); page 15 (MS1/RF2 "not finally
approved by F").

160. What is the current status of Italy's safeguard measures on maize Bt11, MON 809,
MON 810 and T-25? If these products are now permitted to be marketed in Italy, as of when
was this marketing permitted?

33. The United States does not understand the EC's contention that this safeguard measure
adopted by Italy was repealed in July 2004.
28 To the contrary, the United States understands that the
safeguard remained in force at least through Nove mber 2004, because at that time the measure was
subject to a ruling by the Regional Administrative Tribunal. 29 The United States further notes that
although the Tribunal ordered that the safeguard measure be annulled, the United States has no
information indicating that the Government of Ital y has actually implemented the tribunal's order by
annulling the safeguard.

34. In any event, however, the central fact remain s that the Italian safeguard was in force at the
time the Panel was established in August 2003. The United States, as explained previously, submits
that the Panel should make findings on the EC measu res as of August 2003. The DSU contemplates
separate proceedings for determining whether a meas ure found to be inconsistent with a Member's
WTO obligations remains in existence or has been made consistent with a covered agreement.

For Argentina, European Communities and the United States

169. With respect to the safeguard measures invoked for Maize Bt-176, please list the
scientific evidence on which the concerns raised by Austria and Germany on potential adverse
effects on non-target organisms were based (August 2003).

35. The United States has three comments on the EC's response to Question 169.

36. First
, the EC response states that the EC "again summarises" the reasons given by Austria and
Germany for adopting these safeguards. The EC's Marc h 7, 2005 answer to question 169, however, is
the first time in this dispute that the EC has described in any detail the purported rationales for any of
the member State safeguard measures.

37. Second , the EC does not assert that any of the ratio nales put forth by Austria or Germany are
in fact correct,30 nor that such rationales provide the basi s for a product ban (as would be required for
such a measure under the obligations set out in th e SPS Agreement). The reluctance of the EC to
make such claims is understandable, in light of th e fact that the Commission itself disagrees with the
member States' decisions to adopt safeguards. Fu rthermore, the EC does not dispute that the EC's
own scientific committees examined and rejected a ll of the rationales put forward by the member
States. The EC also does not discuss whether, or how, the analysis of the EC's own scientific
committees was in any way inadequate.

38. Third
, the EC does not address whether the member States sought "to obtain the additional
information necessary for a more objective assessm ent of risk" or "review[ed] the sanitary or

28 The EC's supporting exhibit (EC-166) contains a copy of a letter from the Government of Italy to the
Commission, but the exhibit does not include an official document from the Italian health ministry repealing the
safeguard measure.
29 The ruling, which appears to be included in the Ex. EC-166, resulted from a legal proceeding
brought by seed companies and a biotech association.
30 To the contrary, the EC's language – by using phrases such as "Austria and Germany consider" and
"According to Austria and Germany," – is carefully qualified so as not to indicate whether the EC even agrees
with the rationales put forth by the member States.

phytosanitary measure accordingly within a reasonabl e period of time," as required under Article 5.7.
Nor does the EC discuss whether there may have been less trade-restrictive measures (such as
measures other than complete product bans) that would have met the concerns expressed by the
member States. For example, the member State concerns are addressed to purported risks associated
with planting, but the safeguards ban all uses of the biotech products, including import and
processing.

39. Thus, although the EC for the first time has described purported rationales for certain member
State safeguards, the EC has not begun to develo p the information and arguments that would be
needed for the Panel to consider a claim that these safeguards met all the requirements of Article 5.7.
Rather, the most pertinent information on the record remains that the EC's own scientific committees
found that the available evidence was sufficient fo r the completion of risk assessments, that those
committees made positive assessments, and those committees reviewed and rejected the rationales put
forth by the member States in relation to the safeguard measures.

For all parties

170. With reference to EC Directive 2001/18, Annex II, Section C.2.1, please indicate for each
of the listed potential adverse effects of GM Os whether measures applied to prevent or
minimise such effects fall within the scope of Anne x A(1) of the SPS Agreement, and if so, why.
The parties are also invited to address Section D with the same question in mind.

40. Please see the above US comments in relation to Question 119.
For Argentina, the United States and the European Communities:
176. With reference to Austria's safeguard meas ure on Bt-176 maize, please comment on the
reference in exhibit EC-158 att. 7 to insuffi cient labelling requirements laid down in the
Commission Decision relating to the relevant produc t. In particular, what is the basis for the
concern expressed about insufficient labelling (e.g ., food safety, consumer information, etc.),
and how does the labelling issue affect the analys is of whether the Austrian safeguard measure
falls within the scope of the SPS Agreement and/or the TBT Agreement?

41. The EC response on Austria's purpose for requiring food labelling is not supported by the
exhibits. The EC reasoning is as follows:
"The second concern (the insufficient labelli ng for the purpose of effective and fair
consumer information) is also an issue th at is independent and not related to any
component of the risk analysis process to t ackle any of the risks to human, animal or
plant life or health, which may be at stake in the Austrian provisional measure."
"Indeed, the Commission Decision for this product states (fifth recital, 6th indent)
that 'there are no safety grounds for mentioning on the label that the product has been
obtained by genetic modification techniques'."
31
42. To be sure , the Commission found that there were no food safety grounds for labelling the
product. But the question posed by the Panel is why Austria wanted additional labelling. And
Austria, of course, disagreed with the Commissi on on many issues – that is why it adopted the
safeguard. And, as the United States noted in its prior answer to this question, the Austrian

31 EC Answers of March 11, 2005.

memorandum does
 indicate an Austrian concern with purpor ted risks to human health from antibiotic
resistance marker genes. Thus, the EC has no basis for asserting that Austria's concerns regarding
labelling were unrelated to purported risks to human health.
200. With reference to para. 20 of the European Communities' second oral statement
(concerning Bt cotton 531), is the European Communities asserting that the applicant was
formally required or requested to submit the in formation in question? If so, please provide
support.

43. The issue with Bt cotton 531 is that the Regulatory Committee voted on the application in
February 1999 and failed to reach a qualified majori ty to approve or disappr ove; that the EC did not
follow its own procedures by then sending the appl ication on to the Council and if necessary, the
Commission, for final decision; and that the application then languished for over 3 years
, without any
activity other than purported "interservice consultations," until the application was updated in early
2003 to meet the requirements of Directive 2001/18. 32 This delay, as the United States has explained,
is a clear example of the EC applying its moratori um to a product that under EC law, should have
proceeded promptly to a final decision.
44. At the second substantive meeting, the EC trie d to justify this lengthy delay by claiming that
in fact there were outstanding requests for informati on that justified the delay of more than 3 years,
and that those requests for information were refl ected in the comments of the member States during
the vote of the Regulatory Committee.
45. In its response to Question 200, the EC now retreat s from this assertion. In particular, the EC
claims that in its oral statement, it only meant to make the point that member State objections before
"February 1999" – that is, prior to the Regulatory Committee vote – were transmitted to the applicant.
The United states appreciates that the EC is no longer contending that a non-decision in the
Regulatory Committee is equivalent to a request for information. In fact, elsewhere in its answers, the
EC states that the Regulatory Committee voting procedure cannot serve as a request for information:
"The role of a Regulatory Committee is to vote on a proposal for a decision presented
by the Commission. It cannot itself propose any decision nor amend the one
proposed by the Commission. Equally, it does not itself have any power to seek
further information from the applicant. If the Regulatory Committee does not
endorse the Commission's proposal, the procedure moves up to the next level."33
Having dropped its argument that the Regulatory Committee vote served as a request for additional
information, the EC simply has no rationale for claimi ng that the delay of more than three years in the
consideration of Bt cotton 531 was justified. The only explanation for this delay is that it reflected the
EC's decision to adopt a moratorium on making final decisions on biotech product applications.

32 See EC Exhibit 65, Chronology. As the United States explained in its Supplementary Rebuttal
(paras. 40-51), the applican t took the initiative to provide some update d information in 2002, although this
information was not requested by the EC.
33 EC Answers of March 7, 2005, para. 124 (emphasis added).

ANNEX F-4

REPLIES BY CANADA TO QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING
7 MARCH 2005

For all parties

119. With reference to exhibit US-123 (reproduced at para. 9 of attachment II of the US
rebuttal), do the references in ISPM 11 to "indirectly affect plants [… ] by other processes such
as competition" (page 34) and "significant re duction, displacement, or elimination of other
plant species" (page 19) support the view that th e term "injurious" in the IPPC definition of
"pest" ("any species, strain or biotype of plant, animal, or pathogenic agent, injurious to plants
or plant products") should be given a broad interpretation?

1. Yes. The references in ISPM No. 11 support th e view that the term "injurious" in the IPPC
definition of "pest" should be given a broad interpreta tion. In turn, the broad interpretation given to
the term "pest" in ISPM No. 11 confirms that the ordinary meaning of the term "pest" in the SPS
Agreement, in its context and in the light of the object and purpose of the SPS Agreement, should be
given a broad interpretation. Such a broad interpreta tion is consistent with the definition of "pest" in
the SPS Agreement which has been defined to include "weeds" . The references in ISPM No. 11 cited
in the Panel's Question are examples of the type of injury to plant life and health that can be caused by
weeds or other invasive plant pests.

2. That being said, for something to qualify as a "pest" for the purposes of ISPM No. 11 it must
be "injurious" to plants or plant products in the sense of causing damage, either directly or indirectly,
to plant life or health. Similarly, in the light of the object and purpose of the SPS Agreement , for
something to be considered a "pest" for the purposes of the SPS Agreement, it must be "injurious" to
plants, animals, or humans in the sense of causing damage, either directly or indirectly, to life or
health. The presence of a biotech seed or crop woul d not be "injurious" to plants or plant products
merely because that presence caused an economic loss resulting from a legal restriction imposed on
the marketing of a product. Such an economic loss is a consequence of the decision to impose
arbitrary thresholds for the admixture of transgen ic and non-transgenic products – a decision relating
to the marketing of a product, rather than to protect plant life or health.

3. Canada wishes to anticipate Question 140 of the Panel regarding the relevance of the IPPC
and ISPM No. 11 to the interpretation of the term "pest" in the SPS Agreement. Canada notes that the
1997 revised text of the IPPC ("IPPC 1997"), whic h contains the definition of "pest" cited above in
Question 119, is not yet in force, as the requisite two-thirds of the contracting parties to the IPPC have
not yet deposited their instruments of acceptance of the amendments to the IPPC, as reflected in IPPC
1997.
1 Consequently, the IPPC 1997 cannot be considered to be a "rule[] of international law" under
Article 31(3)(c) of the Vienna Convention on the Law of Treaties . If the IPPC is to be considered a
"rule[] of international law", it is the 1979 version that must be so considered.2

1 See Article XIII of the IPPC 1979. Also see Canada's Answers to Questions from the Panel (16 June
2004), Question 4.
2 The IPPC 1979 defines "pest" as "any form of plant or animal life, or any pathogenic agent, injurious
or potentially injurious to plants or plant products;".

4. That being said, ISPM No. 11 incorporates th e updated definition of "pest" used in the IPPC
1997.
3 As Canada explains in its response to Qu estion 140, ISPM No. 11 may be considered as a
supplementary means of interpretation for terms in the SPS Agreement pursuant to Article 32 of the
Vienna Convention. Although the IPPC 1997 is not yet in force, it nonetheless would be consistent
with the object and purpose of the SPS Agreement to consider the updated version of the definition of
"pest" as a supplementary means of interpretation given that the ISPM No. 11 has been endorsed by
the Interim Commission on Phytosanitary Measures as an international phytosanitary standard.

120. With reference to Annex A(1)(d) of th e SPS Agreement, please answer the following
questions:

 (a) What is the meaning of the term "other damage"?

 (b) Does the term "other" imply that Annex A(1)(a) through (c) are also about
"damage"? If so, does the term "oth er damage" cover damage sustained by
plants, animals or humans other than damage to their "life or health"? Please
provide examples.

 (c) Is "other damage" limited to damage su stained by plants, animals or humans?
If not, please provide examples.

5. As the answers to the three above questions tend to overlap, Canada will group its answers to
these questions together.

6. The ordinary meaning of the term "damage" is "harm done to a thing…; esp. physical injury
impairing value or usefulness."
4 The context of the term "damage" includes the definitions set out in
Annex A of the SPS Agreement, in particular the definition of "risk assessment", and other provisions
of the Agreement, in particular Article 5.3. The defin ition of "risk assessment" requires an evaluation
of both the likelihood of an event occurring ( e.g. the entry, establishment or spread of a pest) as well
as the "associated potential biological and econo mic consequences". Article 5.3 requires WTO
Members to take into account, in assessing the risk to animal or plant life or health, "the potential
damage in terms of loss of producti on or sales in the event of the entry, establishment or spread of a
pest or disease; the costs of control or eradicati on…and the relative cost-effectiveness of alternative
approaches to limiting risks."

7. Thus, the context suggests that "damage" means the injurious or harmful potential biological
and economic consequences that result from the occurren ce of an event. The concept of "damage" in
the SPS Agreement is subsumed within the concept of "risk" . "Risk" refers to the likelihood of an
event occurring as well as the extent of potential damage associated with that event.
5

8. The term "other" implies that Annex A(1)(a ) and (c) are also about "damage". However,
while Annex A(1)(a) and (c) involve an evalua tion of the likelihood of the event occurring ( e.g. entry,
establishment and spread of pests or diseases) as well as any associated damage to life or health,
Annex A(1)(d) is only concerned with the "other da mage" that flows from the entry, establishment or

3 ISPM No. 11, "Pest Risk Analysis for Quarantine Pests, Including Analysis of Environmental Risks
and Living Modified Organisms", April 2004, p. 6. (Exhibit EC-130)
4 The New Shorter Oxford English Dictionary, vol. 1 (Oxford: Clarendon Press, 1993), p. 588. (Exhibit
CDA-202)
5 See Australia – Salmon , Report of the Panel, para. 8.72 and 8.116, where the Panel considered the
two types of risks to be evaluated in a risk assessment: (i) the risk of entry, establishm ent or spread and (ii) the
risk of the associated potential biological and economic consequences.

spread of pests. Annex A(1)(d) presupposes that da mage to animal or plant life or health from the
entry, establishment or spread of pests has been established. Consequently, Annex A(1)(d) is
concerned only with "other damage."

9. The use of the term "other" in Annex A(1)(d) suggests that the type of damage contemplated
in Annex A(1)(d) is distinct from the damage to animal or plant life or health (Annex A(1)(a)) and
human life or health (Annex A(1)(c)) arising from th e entry, establishment and spread of pests.
Canada recalls that the terms "animal" and "plant" are defined broadly in the SPS Agreement .
6
Accordingly, many of the risks to biodiversity or the environment cited by the EC falls within the
risks to animal and plant life or health contemplated by Annex A(1)(a). 7 In terms of the second
question in Question 120(b), Canada does not consid er that plants, animals, or humans can be
"damaged" unless there is damage to their "life or health". In the light of Canada's response to
Question 119, it would be inconsistent with the object and purpose of the SPS Agreement to extend
the definition of damage to plants, animals or humans to include so-called damage that is not based on
injury or harm to their life or health. In this par ticular context, reduced yield of a crop, as a result of
competition from a pest such as a weed, would be c onsidered impairment to the health of the crop
plant.

10. In terms of Question 120(c), "other damage" is not limited to damage sustained by plants,
animals or humans. "Other damage" includes damage from the entry, establishment or spread of pests
to the functioning of the environment or the ecosyst em taken as a whole, inde pendent of damage to
the life or health of specific plants or animals. This would include, for example, damage resulting
from ecosystem destabilization and from control, er adication or management programs that would be
needed if a quarantine pest was introduced, and impacts of such programs (e.g. pesticides…) on
biological diversity. Canada refers the Pane l to paragraphs 64-65 of Canada's Third Written
Submission, which discusses the Interim Commission on Phytosanitary Measures' Guidelines On The
Understanding of Potential Economic Importan ce and Related Terms Including Reference To
Environmental Considerations.
8

11. Specific examples of "other damage" may include:

 – environmental and other undesired effects of control measures;
 – capacity to act as a vector for other pests;
 – significant effects on designated environmentally sensitive or protected areas;
 – significant changes in ecological processes and the structure, stability or processes of
an ecosystem (including further effects on plant species, erosion, water table changes,
increased fire hazard, nutrient cycling etc.);
 – effects on human use (water quality, recreational uses, tourism, animal grazing,
hunting, fishing); and
 – costs of environmental restoration.
9

6 SPS Agreement, Annex A, footnote 4.
7 Canada Third Written Submision, paras. 55 to 65.
8 Exhibit CDA-151, pp. 2-3.
9 ISPM No. 11, "Pest Risk Analysis for Quarantine Pests, Including Analysis of Environmental Risks
and Living Modified Organisms", April 2004, pp. 23-24. (Exhibit EC-130)

121. With reference to Article 5.1 of the SPS Agreement, what were the relevant risk
assessment techniques developed by the relevant international organizations that the European
Communities had to take into account in the relevant period (October 1998 – August 2003)?

12. During the period in question (October 1998 – August 2003), there were no "relevant risk
assessment techniques" that had been developed by "r elevant international organizations". While risk
assessment guidelines were in the process of being developed in "relevant international organizations"
such as the Codex Alimentarius Commission (Codex) and under the auspices of the International
Plant Protection Convention (IPPC), during the relevant period, these guidelines remained in the draft
stages.

13. Even if we assumed, for the sake of argument, that Annex III of the Cartagena Protocol on
Biosafety (BSP) constituted a "relevant risk assessment technique" and that it had been developed by a
"relevant international organization" – and Ca nada does not agree with either of these two
propositions – the BSP was not in force during the rele vant period of time. It only came into force on
September 11, 2003.

122. Please explain your views as to the relatio nship between a Member's appropriate level of
protection and the requirement in Article 5.1 to en sure a measure is based on a risk assessment,
as appropriate to the circumstances. Is the appropriate level of protection relevant to the
conduct of the risk assessment?

14. The appropriate level of protection (ALOP) is not directly relevant to the conduct of the risk
assessment. It is, however, relevant once the risk assessment has been completed and, assuming that a
risk has been identified, a risk management measure has to be selected.

15. This is reflected in the international standa rds for risk assessment that have been developed,
for example, in Codex and under the auspices of the IPPC. A review of the Codex Principles for the
Risk Analysis of Foods Derived from Modern Biotechnology
10 (Codex Principles) reveals that the
ALOP is not a relevant consideration in conducting either the safety assessment or the risk
assessment. For instance, under Section 3 – Principles, paragraph 10 states that:

Risk assessment includes a safety assessment, which is designed to identify whether a
hazard, nutritional or other safety concern is present, and if present, to gather
information on its nature and severity…If a ne w or altered hazard, nutritional or other
safety concern is identified by the safety assessment, the risk associated with it should
be characterized to determine its relevance to human health.
11
16. It is noteworthy that in the quoted statement, which sets out the basic principle with respect to
the conduct of a risk assessment under the Codex Principles, there is no indication that the level of
protection chosen by the country conducting the risk assessment is a factor to be taken into account.

17. Similarly, ISPM No. 11 makes no mention of the ALOP as a factor or determinant in the
conduct of a pest risk assessment. It is at Stage 3 – Pest Risk Management – that ISPM No. 11
addresses the role of acceptable levels of risk.
12

10 Exhibit EC-44.
11 Ibid., p. 44.
12 ISPM No. 11, "Pest Risk Analysis for Quarantine Pests, Including Analysis of Environmental Risks
and Living Modified Organisms", April 2004, p. 28. (Exhibit EC-130)

18. In short, neither the Codex Principles, nor I SPM No. 11, support an argument that the conduct
of the risk assessment is affected in any way by the ALOP. To the contrary, they confirm that the
conduct of a risk assessment relies on the best and mo st complete scientific information available in
order to enable the risk assessor to identify the hazards and characterize the risks with as much
certainty as is possible.

19. Put differently, a risk assessment is conduc ted according to pre-established parameters.
These parameters reflect the range of hazards that c ould arise from the activity or product in question.
According to present international standards, th e risk assessor should have the best available
information at his or her disposal in order to assess the hazards and characterize the potential risks
with as much certainty as is possible. The va lue of the risk assessment hinges on the degree of
certainty with which the risk assessor can state his or her conclusions. This is true regardless of the
ALOP sought to be achieved.

20. The risk manager, in turn, weighs the conclusi ons of the risk assessment in light of the ALOP
and, on that basis, selects the risk management me asure that is expected to achieve that level of
protection.

21. It is true that the first part of the defi nition of risk assessment in paragraph 4 of Annex A
refers to "the evaluation of the likelihood…accord ing to the sanitary or phy tosanitary measures which
might be applied", but this language does not im ply that the conduct of the risk assessment is
influenced by the level of protection sought to be achieved. It simply requires the WTO Members to
examine the range of risk management measures av ailable in light of the risks that have been
identified. The chosen level of protection may influence the range of risk management measures
available, but it does not affect the identifica tion of hazards and the characterization of any
consequent risks.

22. In short, whether the chosen level of protection is low or high does not affect the risk
assessor's need to have sufficient information at his or her disposal to come to a conclusion that is as
certain as possible. A risk assessment that is characterized by significant uncertainty as to the
likelihood or magnitude of adverse ef fects occurring is less helpful to the risk manager, regardless of
the level of protection sought to be achieved because it is less likely to serve as an accurate predictor
with respect to whether that level of protection will actually be achieved.

123. Please assume for the sake of argument that Article 5.7 of the SPS Agreement provides
for an exception in the nature of an affirmative defence:

 (a) Could the Panel assess the merits of an y such defence without having previously
found an inconsistency with Article 2.2 of the SPS Agreement?

23. Technically, the Panel could assess a measure against Article 5.7 without first making a
determination whether that measure was inconsistent with Article 2.2. However, the first question
that would have to be answered is whether ther e was insufficient evidence to complete a risk
assessment. It is only if there is insufficient eviden ce to complete a risk assessment that Article 5.7 is
available as a defence. The insufficiency of the evidence means that the measure cannot be based on
a risk assessment, and that it is being maintained without sufficient scientific evidence. In other
words, the measure is ipso facto inconsistent with Articles 5.1 and 2.2, at least on a provisional basis.
Conversely, if there is sufficient
 scientific evidence to complete a risk assessment, the measure cannot
benefit from the protection afforded by Article 5.7, a nd the analysis has to revert to the question of
whether the measure is in fact based on a risk assessment and therefore maintained with sufficient
scientific evidence.

24. Hence, in a practical sense, the need to assess the merits of a defence under Article 5.7 should
not logically arise unless the defending party concedes that its measure does not meet the
requirements of Article 2.2. That is, the defendi ng party would have to assert that its measure was
being maintained without sufficient scientific ev idence because sufficient sci entific evidence did not
exist to complete a risk assessment. Having invoke d Article 5.7, it would then be for the defending
party to establish a prima facie case that the circumstances were su ch that the "relevant scientific
evidence is insufficient" to complete a risk a ssessment, and that the measure meets all of the
requirements of Article 5.7.

25. Thus, an inconsistency with the requirement s of Article 2.2 – whether conceded by the
defending party or determined by the Panel through its own analysis – is a natural precursor to turning
to Article 5.7 to see if the measure cannot be justified on other grounds.

26. That this is correct seems clear fro m the approaches taken by the panels in Japan –
Agricultural Products II and Japan – Apples. In both cases, the complain ing party alleged a violation
of Article 2.2. In neither case did the complaining party assert a violation of Article 5.7 as part of its
claim. The defending party raised Article 5.7 as an alternative defence, predicated on a finding by the
panel that the measure was being maintained without sufficient scientific evid ence. The panels in
those two cases came to the conclusion, on a provisiona l basis, that the measure in question was being
maintained without sufficient scientific evidence.
13 The panel in each case then noted that Japan had
invoked Article 5.7 as an alternative defence. That is, the panels concluded that if the measure met
the requirements of Article 5.7, then they could not conclude that Article 2.2 had been violated. Both
panels went on to conclude that the measures in qu estion did not meet the requirements of Article 5.7,
and, on that basis, the panel in each case confirmed the violation of Article 2.2.

27. In other words, in both cases, the question of whether Article 5.7 applied was meaningful or
relevant only because the panels had first determ ined that the measure in question was being
maintained without sufficient scientific evidence.

 (b) If not, in a case such as this one where a claim of inconsistency with Article 2.2 of
the SPS Agreement is based on a claim of inconsistency with Article 5.1 of the
SPS Agreement, would it be correct for the Panel to begin its analysis with the
Article 5.1 claim, then move to the co nsequential Article 2.2 claim and finally
turn to the Article 5.7 defence?

28. Yes. Given the jurisprudence,
14 it seems axiomatic that a measure that is not based on a risk
assessment is necessarily inconsiste nt with Article 2.2, third element (likely also second element).
Therefore, determining whether the measure is not based on a risk assessment, that is, whether
Article 5.1 has been violated, logically precedes a determination whether Article 2.2 has been
violated. Once a provisional finding has been made that the measure is being maintained without
sufficient scientific evidence, contrary to Article 2. 2, it is for the defending party, if it so chooses to
invoke Article 5.7 as a defence on the initial grounds th at insufficient evidence exists to complete a
risk assessment. Thus, the question of whether the measure meets the requirements of Article 5.7
arises, with the burden of proof falling on the defending party as the party who "asserts the affirmative
of a particular claim or defence".
15

13 Japan – Agricultural Products II , Report of the Panel, para. 8.43; Japan – Apples , Report of the
Panel, para. 8.199.
14 Australia – Salmon, Report of the Appellate Body, para. 138.
15 US – Wool Shirts and Blouses, Report of the Appellate Body, p. 14.

For all complaining parties:

124. With reference to para. 19 of the Europe an Communities supplemen tary rebuttal, do
the complaining parties agree that the Panel "i s not asked to determine whether a prudent
government, in the abstract, should have behaved or not in a certain manner thus causing delay.
It merely needs to find whether, in the concrete case and in light of the factual information and
the legal arguments before the relevant authorities, that behaviour which in the end caused a
delay could justifiably have been adopted"?

29. As it has already indicated in its Second Oral Statement, Canada does not agree with the EC's
view of the standard of review with resp ect to paragraph 1(a) of Annex C of the SPS Agreement.
16
Canada specifically disagrees with the EC's assertio n in paragraph 19 of its Supplementary Rebuttal.
In particular, the distinction that the EC seeks to create between the so-called "more general wording"
of paragraph 1(a) of Annex C and the, presumably, more specific wording of Article 5.2, is a false and
ultimately irrelevant dichotomy.

30. Thus, in Canada's view, the standard of re view with respect to whether the EC's measures
amount to undue delay under paragr aph 1(a) of Annex C is not a question of whether the EC's
"behaviour… could justifiably have been adopted; it is a question of whether a reasonably diligent
government would and should have acted in view of the factual information at its disposal. This
characterization is consistent with the Appellate Body's statement in EC – Hormones that "the
applicable standard is neither de novo review as su ch, nor 'total deference', but rather the 'objective
assessment of the facts'".
17

31. Furthermore, a determination as to whether a WTO Member has violated the obligation in
paragraph 1(a) of Annex C to undertake and comple te approval procedures "without undue delay" is a
question of mixed law and fact. As such, there is no reason for the Panel to adopt a deferential
approach to its determination as to what constitut es "undue delay". As the Appellate Body noted in
EC – Hormones:

In so far as legal questions are concerned – that is, consistency or inconsistency of a
Member's measure with the provisions of the applicable agreement – a standard not
found in the text of the SPS Agreement itself cannot absolve a panel (or the Appellate
Body) from the duty to apply the customary rules of interpretation of public
international law.
18
32. In any event, the EC's proposed "standard of review" in paragraph 19 of its Supplementary
Rebuttal sounds eerily similar to the standa rd of review that the EC proposed in EC – Hormones. In
that case, the EC pointed to Article 17.6(i) of the Anti-Dumping Agreement as the basis for what it
called a "deferential reasonableness standard" to be applied to factual issues in the SPS Agreement.
Article 17.6(i) states, in part, that:

In its assessment of the facts of the matter, the panel shall determine whether the
authorities' establishment of the facts w as proper and whether their evaluation of
those facts was unbiased and objective. If the establishment of the facts was proper
and the evaluation was unbiased and objectiv e, even though the panel might have
reached a different conclusion, the evaluation shall not be overturned.

16 Canada Second Oral Statement, paras. 97-100.
17 EC – Hormones, Report of the Appellate Body, para. 117.
18 Report of the Appellate Body, para. 118.

33. The EC argued in that case that this standa rd is applicable in "all highly complex factual
situations, including the assessment of the risk s to human health arising from toxins and
contaminants".
19

34. A review of the EC's argument in paragraph 19, including its assertion that "the Panel merely
needs to look at the applications to satisfy itself th at such delays that may have occurred were based
on reasonable justification",20 and its contention that the panel me rely needs to determine whether the
"behaviour which in the end caused a delay could justifiably have been adopted", 21 calls to mind the
language in Article 17.6(i).

35. The Appellate Body soundly rejected the EC 's proposed "deferential reasonableness standard"
in EC – Hormones .
22 This Panel should reject any effort by the EC to resurrect that standard in this
dispute.

125. The European Communities' opening statemen t at the Panel's meeting with the experts
includes the following statements:

• "[T]he European Communities' approach is to seek more evidence to establish
whether or not there is a risk [… ] in order to make a definitive decision on the
basis of full information – even if that takes a little more time". (para. 19)

• "The European Communities reacts [to uncertainty as to the appropriate risk
management strategies ] by saying 'let's take our time and reduce the
uncertainty". (para. 17)

Do the complaining parties consider that it woul d be consistent with Annex C(1)(a) of the SPS
Agreement to delay making a definitive decision based on the approach outlined by the
European Communities? In answering this questio n, please take into account the provisions of
Article 2.2 of the SPS Agreement
23 and Article 5.7 of the SPS Agreement (adoption of
provisional measures based on available pertinent information).

36. Canada refers the Panel to paragraphs 148-150 of Canada's Third Written Submission.

37. Canada agrees that, while there may be circumstances in which the application of a
precautionary approach in the selection of the risk management measure is warranted, this must be
qualified so as to ensure that the purported application of the precautionary approach does not become
a disguise for protectionism. As the Appellate Body found in EC – Hormones , while the
precautionary approach finds reflection in several of the provisions of the SPS Agreement , the
precautionary approach does not override the provisions of Articles 5.1 and Article 5.2.
24 Similarly,
in Canada's view, the precautionary approach ca nnot override the requirements of Annex C or
Article 2.2.

19 Quoted in EC – Hormones, Report of the Appellate Body, para. 113.
20 EC Supplementary Rebuttal, para. 19. (Emphasis added)
21 Ibid. (Emphasis in the original)
22 EC – Hormones, Report of the Appellate Body, para. 114 and 119.
23 (This footnote appeared in the Panel's question) In EC – Hormones , the Appellate Body stated in
relation to Article 2.2 that "a panel charged with determin ing [...] whether 'sufficient evidence' exists to warrant
the maintenance by a Member of a particular SPS measure may, of course, and should, bear in mind that
responsible, representative governments commonly act from perspectives of prudence and precaution where
risks of irreversible, e.g. life-terminating, damage to human health are concerned" (para. 124).
24 EC – Hormones, Report of the Appellate Body, paras. 124-125.

38. As Canada set out in its Second Oral Stat ement, in determining whether a Member has
complied with its obligations under the SPS Agreement , the question is not whether scientific
uncertainty exists, but whether there is sufficient scientific evidence to enable the completion of a risk
assessment.
25 By raising the spectre of "uncertainty" a nd a lack of "full information", the EC is
suggesting that insufficiency of scientific evidence justifies a prolonged delay in the completion of an
approval procedure. This is nothing other than an indirect attempt to justify the product-specific
marketing bans under Article 5.7.

39. Where pre-marketing approval is required for a product to be marketed, the decision by a
regulatory authority not to complete the approval pr ocedure on the basis of insufficiency of relevant
scientific evidence amounts to a ban on the product. 26 Whether or not this ban is adopted in the form
of a legal instrument does not affect the application of Article 5.7 to the approval procedure. Thus, a
ban arising from a decision not to complete th e approval procedure will be exempted from the
requirements of Article 2.2, third element, only if the Member is able to demonstrate that the ban
satisfies the requirements of Article 5.7. Similarl y, in order to justify the delay in completing the
approval procedures under Annex C of the SPS Agreement, the defending WTO Member would have
to demonstrate that the ban satisfies the requirements of Article 5.7. If the ban does not satisfy those
requirements, then the delay in completing the approval procedures is "undue".

40. However, despite asserting scientific uncertain ty, the EC has not claimed the protection of
Article 5.7, let alone demonstrated that its require ments have been satisfied. Instead, the EC appears
to assume that Article 5.7 does not apply to th e operation of inspection, control and approval
procedures. As Canada has previously argued,27 this assumption is invalid. It is incumbent on the EC
to demonstrate that the requirements of Article 5.7 have been met where it argues that a risk
assessment cannot be completed on the basis of insufficiency of scientific evidence.

126. In paragraph 10 of the EC Responses to the Questions from the Panel (16 June 2004),
the European Communities compares the definitions of risk assessment as used in the SPS
Agreement and as used in Codex, and concludes th at "It is clear that the SPS definition of risk
assessment is equivalent to 'weighing policy alternatives in the light of the results of risk
assessment' which is part of the Codex Definition to ¨'risk management'". Do you agree with
this conclusion? Please explain your response.

41. Canada does not agree. Cana da refers the Panel to paragr aphs 80-95 of Canada's Second
Written Submission and paragraphs 15-20 of Canada's Third Writte n Submission where Canada has
responded in detail to the EC's assertions in this regard. Canada's arguments can be summarized as
follows.

42. First, to the extent that a risk arises from the entry, establishment or spread of a pest or
disease, the risk assessment must eval uate the likelihood of entry, establishment or spread of a pest or
disease according to the sanitary and phyto sanitary measure which might be applied
. Building on the
framework adopted by the Appellate Body in Australia – Salmon , such a risk assessment must
evaluate both (1) the likelihood of entry, establi shment or spread and the associated potential
biological and economic consequences and (2) evaluate such likelihood according to the SPS
measures which might be applied . It is not sufficient to merely identify and evaluate the risks and
biological and economic consequences. The re ference to "according to the SPS measures which
might be applied" implies that different risk management measures or, to use the EC's language,

26 Canada First Written Submission, paras. 159 and 255.

"policy alternatives", that might be applied to control the identified risks – what the Panel in Australia
– Salmon referred to as "risk reduction factors"
28 – must also be evaluated in order for the risk
assessment to meet the requirements of the firs t definition in paragraph 4 of Annex A of the SPS
Agreement. The reference in Article 5.3 to "the rela tive cost-effectiveness of alternative approaches
to limiting risks" as a relevant economic factor to be taken into account in conducting a risk
assessment supports this conclusion.

43. Second, it is important to note that the "polic y alternative" that is selected becomes the SPS
measure. Pursuant to Article 5.1, the SPS measur e in question must be based on the risk assessment,
that is, there must be a rational connection betw een the so-called "policy alternative" and the
evaluation of the risks.

44. Third, the EC stresses the distinction between risk assessment strictu sensu and risk
management and the respective roles of the scientific committees and Regulatory Committee.
29 The
EC divides the term "risk assessment" into thr ee components: "(1) risk assessment in the narrow
sense, i.e. as a 'scientifically based process ', and (2) risk management, and (3) risk communication." 30
The EC stresses that risk management decisions are made by the Regulatory Committees and risk
assessment strictu sensu falls to the scientific committees. In other words, the scientific committees
are responsible for evaluating the risks while th e Regulatory Committees are responsible for selecting
the appropriate SPS measure.31

45. To the extent that the EC s uggests that only the "risk assessment in the narrow sense" must be
a "scientifically based process", Canada disagrees. This is tantamount to claiming that only part of
the "risk assessment" in the SPS Agreement must be science-based, an assertion at odds with the
definition of "risk assessment" in Annex A and the requirement to base an SPS measure on a risk
assessment.

46. If one accepts, for the sake of argument, that the Regulatory Committees are responsible for
"weighing policy alternatives", it follows logica lly that the Regulatory Committees must have
evaluated the various risk management options that mi ght be applied in the light of the risks that were
identified in the risk assessment as is required by the SPS Agreement. Ironically, the EC quotes in its
Responses to Questions from the Panel (16 June 2004) from a decision of the European Court to the
effect that if the Regulatory Committee disregards the scientific opinion, "it must provide specific
reasons for its findings by comparison with those ma de in the opinion and its statement of reasons
must explain why it is disregarding the latter. The st atement of reasons must be of a scientific level at
least commensurate with that of the opinion in question."
32

28 Australia – Salmon , Report of the Panel, paras. 8.89 and 8.90. The Appellate Body endorsed this
approach in para. 134 in concluding that Australia failed to fulfil the third requirement of the first definition of
risk assessment, namely "the required evaluation of the likelihood of entry, establishment or spread of the
diseases of concern according to the SPS measures which might be applied."
29 See generally EC Responses to Questions from the Panel following the First Substantive Meeting (16
June 2004), Question 2, para. 12 and EC Second Written Submission, paras. 27-31.
30 EC Second Written Submission, para. 21. [emphasis added]
31 It should be noted that the EC has consistently de-emphasized the role of the Commission. The
Commission is responsible for drafting the measure to be placed before th e Regulatory Committee after inter-
service consultation; if the Regulatory Committee fails to act, the Commission is oblig ated to refer the draft
measure to Council without delay; if Council fails to act within three months, the Commission is obligated to
adopt the measure.
32 EC Responses to Questions from the Panel following the First Substantive Meeting (16 June 2004),
Question 17, para. 57.

47. In not one instance has the EC itself put forth information of this nature that would justify
ignoring the advice of its own scientific committ ee. In the more than six years since the moratorium
was imposed, the EC has failed to evaluate the SPS meas ures that might be applied. In a sense, this is
not surprising given that with the possible excep tion of a few cases, the risk assessments have not
identified any risks of a different nature or magnitude than those arising from conventional
counterparts of the biotech products in question.

127. At para. 42 of Canada's supplementary re buttal, Canada suggests that crop husbandry
includes breeding and that if a scientist employs selective breeding methods in the laboratory,
this should qualify as crop husbandry because the scientist would be performing the same
operations as a farmer who employs selective breeding methods on the farm. But is the
insertion of a transgene part of the breeding of biotech crops? Or is the breeding rather the re-
production of the biotech seed?

48. The insertion of a transgene is part of the br eeding of biotech crops. As Dr. Andow has stated
"breeding involves two important processes: (1) finding and introducing usable genetic variation into
the breeding population and (2) improving and selecting desired varieties from the breeding
population."
33 Dr. Andow indicated that transgenesis, as well as mutagenesis, is a process to
introduce genetic variation into the breeding population. He indicated that transgenesis is "a part of
the breeding process", although only one part. Once th e transgene has been in serted, the transgenes
are introgressed into an elite, adopted germplasm.

49. Dr. Andow's description of modern plant breedi ng is supported by scientific reports before the
Panel. For instance, in Exhibit CDA-195, th e authors refer to "breeding" as encompassing
conventional breeding techniques as well as breeding using rDNA technology.

50. Thus, in the light of modern plant breeding techniques, it would be artificial to exclude one
method for introducing genetic variation – transgen esis – from the concept of "breeding" and crop
husbandry.

Questions not Previously Provided to the Parties

For all parties

140. With reference to (1) Codex standards 192 and 193, (2) IPPC and (3) ISPM 11:

 (a) Are they "rules of international law applicable in the relations between the
parties [to this dispute ]" within the meaning of Article 31(3) of the Vienna
Convention on the Law of Treaties?

51. Canada does not consider Codex Standards 192 and 193, or ISPM No. 11 to be "rules of
international law". Hence they do not fall w ithin the scope of Article 31(3)(c) of the Vienna
Convention. With respect to the IPPC, Canada refers the Panel to Canada's response to Question 119.

52. Canada also questions the Panel's apparent assumption that the reference to "parties" in
Article 31(3)(c) is a reference to the parties in a given dispute. Canada is of the view that the
reference to "parties" is a reference to the parties to the treaty that is being interpreted. In the case of
the WTO Agreement, the rules of international law in question would have to be applicable in the
relations among all the WTO members.

33 Dr. Andow, Responses to Questions, para. 102.01.

 (b) May they be used as additional factual evidence of the ordinary meaning of
terms contained in Annex A of the SPS Agreement, as the United States appears
to suggest in its rebuttal at para. 6 of attachment II? (The United States is
invited to provide elaboration on its statement at para. 6.)

53. Notwithstanding the fact that Codex Sta ndards 192 and 193, and ISPM No. 11 are not
captured by any of the categories of Article 31 of the Vienna Convention , they may be relevant as
supplementary means of interpretation pursuant to Article 32 in order to confirm the meaning of terms
resulting from the application of Article 31, or to determine the meaning when the interpretation
according to Article 31 leaves the meaning ambiguous or obscure, or leads to a result which is
manifestly absurd or unreasonable ( e.g., the EC's argument that risks arising from allergens in the
context of food safety is excluded from the scope of the SPS Agreement because the specific term
"allergen" is not explicitly included in paragraph 1(b) of Annex A).

141. With reference to Annex (B)(1) of the SPS Agreement, please answer the following
questions:

 (a) Does the term "sanitary and phytosani tary regulations" cover administrative
decisions which relate to the operation of approval procedures and which are
generally applicable?

54. Yes.
34 The definition found in footnote 5 indicates that the list ("laws, decrees or
ordinances") is illustrative rather than exhaustive. Article 7 states clearly that "Members shall notify
changes in their sanitary or phytosanitary measures"; this obligation is elaborated upon in paragraph 1
of Annex B, where it states "Members shall ensure that all sanitary and phytosanitary regulations
which have been adopted are published promptly…". This would include "administrative decisions
which relate to the operation of approval procedures and which are generally applicable". As Canada
has already demonstrated, the moratorium is a measure that falls within the scope of Article 7 and
paragraph 1 of Annex B; therefor e the EC was under an obligation to "notify" the "change" in its
existing regulatory regime for the assessment a nd approval of biotech pr oducts for environmental
release and for food safety purposes.

 (b) May the phrase "sanitary and phytosanitary regulations which have been
adopted" be interpreted to encompa ss also sanitary and phytosanitary
regulations which have been adopted de facto (e.g., generally applicable decisions
which have been reached informally and which are unrecorded)?

55. Yes. This is precisely the purpose of Article 7 and Annex B of the SPS Agreement. As the
Appellate Body stated:

The object and purpose of paragraph 1 of A nnex B is 'to enable interested Members
to become acquainted with' the sanitary and phytosanitary regulations adopted or
maintained by other Members and thus to enhance transparency regarding these
measures. In our opinion, the scope of a pplication of the publication requirement of
paragraph 1 of Annex B should be interpreted in the light of the object and purpose of
this provision.
35
56. If the provision were to be given a more restrictive scope, for example, by only including
measures that had been formally adopted ( de jure ), WTO Members could easily evade their

34 Canada First Written Submission, paras. 246-253.
35 Japan – Agricultural Products II, Report of the Appellate Body, para. 106.

obligations under Article 7 and paragraph 1 of Annex B by structuring their decision-making in such a
way as to avoid formal decisions with respect to SPS measures. This would be contrary to one of the
central principles underlying the WTO Agreement as a whole, that is, the promotion of transparency
with respect to all measures affecting trade. The EC would be able to claim that, because the
moratorium was not formally adopted via a decision of one of the Community organs, there was no
obligation on the EC to notify the moratorium or to publish it promptly. Such an argument would be
completely at odds with both the letter and the spirit of the WTO rules.

142. Please explain the meaning and rationale of the requirement in Article 2.2 that SPS
measures be "based on scientific principles" and how this is different from the requirement that
SPS measures not be maintained "without sufficient scientific evidence".

57. Generally speaking, the reference in Article 2.2 to "scientific principles" relates to the
methodological soundness and rigour of the process wh ereby the "scientific evidence" relied upon to
support the measure in question is adduced. "Scien tific principles" are reflected to some degree
reflected in the requirements set out in Articles 5.1 through 5.3 and in the definition of "risk
assessment" found in paragraph 4 of Annex A.

58. "Scientific" is, in relevant part, defined as "of, pertaining to, or of the nature of science" and
"valid according to the objective principles of scientific method".
36 "Science" is defined as "a branch
of study that deals either with a connected body of demonstrated truths or with observed facts
systematically classified and more or less comprehended by general laws, and which includes reliable
methods for the discovery of new truth in its own domain".
37 "Principle" has a variety of meanings,
the most relevant definitions be ing "a fundamental truth or propo sition on which others depend" and
"a general or inclusive theorem or law, having numerous special applications across a wide field".38

59. The foregoing suggests that "scientific principles" as used in Article 2. 2 relates to the use of
scientific methods of analysis, such as empirici sm, objectivity, peer review and falsifiability
(hypotheses can be tested and previous results verified or refuted). It is important that the data and
other information put before the risk assessor is free from bias. In other words, it addresses the
scientific rigour of the knowledge relied upon by the risk assessor. This can be distinguished from the
term "scientific evidence", which focuses on the re lationship between the conclusions of the risk
assessment – rather than its conduct per se – and the risk management (SPS) measure selected.

60. To some degree, the notion of "scientific princi ples" is reflected in the requirements set out in
Article 5.2 and 5.3 with respect to the conduct of th e risk assessment, and in the definition of "risk
assessment" found in Annex A. The two provisions speci fy, to a certain degree, the types of factors
that must be included in the risk assessment, a nd the definition establishes the rigour that must be
observed in its conduct.

143. The Panel notes a number of instances where the same or a related product was
apparently submitted under separate applications fo r approval. This appears to be the case for
Monsanto Roundup Ready oilseed rape GT73 (EC-70, EC-79); Syngenta Bt 11 maize (EC-80,
EC-92, and related EC-69); Pioneer/Dow AgroSc iences Bt corn Cry1F (1507) (EC-74, EC-75,
EC-95); Monsanto Roundup Ready corn NK603 (EC-76, EC-96); Monsanto Roundup Ready
corn GA 21 (EC-78, EC-85, EC-91); and the various "stacked" products. To what extent does
the assessment by a lead CA, the relevant EC Scientific Committee and any information

36 The New Shorter Oxford Dictionary , vol. 2 (Oxford: Clarendon Press, 1993), p. 2717. (Exhibit
CDA-203)
37 Ibid.
38 Ibid., p. 2356. (Exhibit CDA-204)

provided by a notifier under one application serv e as a basis for consideration of another
application for the same or a related product?

61. There are many cases in which the data provi ded by the notifier in support of applications
under both the Directives 2001/18 (and 90/220) and Regulation 258/97 is fundamentally similar. For
instance, in relation to risk assessments for food, feed or environmental release, the molecular
characterization data, including data regarding the inserted gene, the nature and level of proteins
expressed by that gene, the toxicology or allergenicity of the new expressed proteins, is essentially the
same. Consequently, the assessment of a product by one scientific committee could have and should
have served as a basis for consideration of another application for the same or related product to the
extent that the risks being assessed were the same or similar.

144. The Panel notes that a number of products containing the same transgenic modifications
as products at issue in this dispute were prev iously approved by the European Communities
prior to July 1998 (eg, swede rape tolerant to glufosinate ammonium (MS1, RF1) and (MS1,
RF2); swede rape tolerant to glufosinate ammonium (Topas 19/2); maize tolerant to
glufosinate ammonium (T25); maize expressing the Bt cry1A(b) gene (MON 810); maize
tolerant to glufosinate ammonium and expressi ng the Bt cry1A(b) gene (Bt-11); soybean
tolerant to glyphosate; chicory tolerant to glufosinate ammonium; maize Roundup Ready
NK603). To what extent and how were the prev ious assessments of potential risks to human,
animal or plant health and/or the environment associated with these transgenic modifications
taken into consideration in the evaluation of po tential risks arising from the products at issue
before the Panel?

62. This question highlights the extent to wh ich the products with pe nding applications are
similar to products that have already been approved by the EC in terms of their genetic modification.
Indeed, the range of transgenic modification in currently commercialized products is very limited
(tolerance to specific herbicides and the expressi on of specific toxins). These transgenic
modifications, and their associated potential risks, are well-understood.

63. To the extent that there are similarities betw een different products with the same transgenic
modification, such as the transformation method used, the type of protein expressed, the plant
biology, the end use to which the product will be put, the previous risk ass essments evaluating these
elements are relevant to and s hould have been taken into consideration in the evaluation of the
potential risks arising from the products at issue before the Panel. For instan ce, where the toxicology
of the expressed protein had already been examined for one product ( e.g. soybean tolerant to
glyphosate or oilseed rape Ms1xRf1 and Ms1xRf2 to lerant to glufosinate ammonium), this should
have simplified considerably the toxicological ev aluation where the same protein was expressed by a
second product (e.g. NK603 maize and Ms8xRf3 oilseed rape, respectively).

64. In the evaluation of potential risks arising fro m the products at issue before the Panel, the EC
does not appear to have given much weight to th e previous assessments of potential risks associated
with these transgenic modifications undertaken by its own scientific bodies. Had credible scientific
evidence existed to bring into question the scientif ic conclusions regarding the previously approved
products, one would have expected the EC to have revoked the approval of these products. In no case
did the EC do so. Indeed, where EC Member Stat es adopted safeguard measures, in no case did the
EC consider the additional information put forth by the Member State in attempting to justify its
safeguard measure sufficient to warrant the revocation of the initial approval.

For all complaining parties

145. With reference to para. 7 of the European Co mmunities second oral statement, is it "for
the Complainants to rebut this evidence [submi tted by the European Communities] by putting
forward arguments and evidence as to why reaso ns for delays put forward in the European
Communities' submissions are unjustified"?

65. Canada disagrees. Canada and th e other complainants have established a prima facie case
that the moratorium and product-specific marketing bans are not based on a risk assessment contrary
to Articles 5.1 and 2.2 of the SPS Agreement and that the resulting delay in processing applications
under the EC's approval regime for biotech products is undue contrary to Annex C. The onus shifts to
the EC to demonstrate that the moratorium and product-specific marketing bans are either (a) based
on a risk assessment or (b) justified under Article 5. 7. The EC cannot do the former because there is
no risk assessment upon which the bans can be based and has not even advanced an argument in
relation to the latter.

66. In terms of undue delay, Canada has demonstrated that there has been undue delay in the
completion of the approval procedures for all specific products of interest to Canada. In fact, the
chronologies for individual applications, rather than refuting the prima facie case established by
Canada, confirm the validity of Ca nada's arguments regarding the moratorium and resulting product-
specific marketing bans.

For Canada

147. With reference to exhibit CDA-118, how does this exhibit support Canada's assertion at
para. 38 of its rebuttal?

67. The second sentence of paragraph 38 should r ead: "[a]t a 28 January 2003 meeting of the
Agriculture Ministers, several Member States stated their opposition to lifting the moratorium until
the regulations on genetically modified food and feed
 were adopted." In terms of traceability and
labelling, Canada refers the Pa nel to paragraphs 29 and 30 of its Second Written Submission, and
exhibits referred to therein, for support for the asser tion that EC Member States continued to refuse to
lift the moratorium until new legislation regarding traceability and labelling was in place.

148. Please explain your contention, in paragraph 73 of your Third Written Submission, that
"in the only instance where an EC member St ate raised concerns about "biogeochemical
cycles", the concern was not pursued."

68. On 14 March 2000, the EC Member State in ques tion, Italy, made identical requests for more
information on "biogeochemical cycles" in relati on to both oilseed rape Falcon GS40 and Ms8xRf3.
Indeed, the documentation provided by the EC in relation to each request is identical – see Exhibits
EC-62 – attachment 95 and EC-63 – attachment 87. Given that the two products, Falcon GS40 and
Ms8xRf3, both oilseed rape cultivars with a tr ansgenic modification conferring tolerance to
glufosinate-ammonium, were being assessed in paralle l, Canada considers the Italian requests, made
on the same date in relation to oilseed rape products with the same transgenic modification, to be a
single request.

69. The notifier's response to the Italian request, sent on November 13, 2000, 39 was transmitted to
all EC Member States. 40 The notifier explained that the proteins that confer tolerance to glufosinate-

39 Exhibit EC-63 – attachment 88. Also, see Exhibit EC-62 – attachment 97.
40 Exhibit EC-63 – attachments 89 and 90.

ammonium (the PAT enzyme) are highly specific a nd hence there is no reason to expect that the
product would have any impact on biogeochemical cycles.
41 Following receipt of this response, it
does not appear that the any Member State disputed the notifier's explanation or raised additional
concerns in relation to "biogeochemical cycles". Tw o years later, the notifier re-stated its conclusion
in this regard in its revised environm ental risk assessment submitted pursuant to Directive 2001/18.42
Again, the relevant EC authorities do not appear to have disputed this specific conclusion.

70. Canada is unaware of any other specific re quest for information concerning "biogeochemical
cycles" in relation to a specific pending application.

For Canada, European Communities and the United States

168 (EC-72). The Panel notes that the chrono logy provided by the European Comunities
shows no actions on this application betw een 12/99 (when according to the European
Communities the UK CA allegedly advised the company that the dossier required substantial
revision and clarification) and its re-submission in 1/03 under Directive 2001/18. Could the
parties please explain the lack of action?

71. Canada has not made any claims in relation to this particular product – oilseed rape T45 and
accordingly is not in a position to comment on this application.

41 Exhibit EC-63 – attachment 88.
42 Exhibit EC-63 – attachment 112, p. 40.

ANNEX F-5

REPLIES BY CANADA TO ADDITIONAL QUESTIONS POSED BY THE PANEL
IN THE CONTEXT OF THE SECOND SUBSTANTIVE MEETING
11 MARCH 2005

For all parties:

170. With reference to EC Directive 2001/18, Annex II, Section C.2.1, please indicate for each
of the listed potential adverse effects of GM Os whether measures applied to prevent or
minimise such effects fall within the scope of A nnex A(1) of the SPS Agreement, and if so, why.
The parties are also invited to address Section D with the same question in mind.

1. Measures applied to prevent or minimize each of the following "potential adverse effects of
GMOs," as set forth in Directive 2001/18 , Annex II, Section C.2.1, fall within the scope of
Annex A(1) of the SPS Agreement.

 – disease to humans including allergenic or toxic effects (see for example items II.A.11.
and II.C.2(i) in Annex III A, and B 7 in Annex III B);

 – disease to animal and plants including toxic, and where appropriate, allergenic effects
(see for example items II.A.11 and II.C.2 (i) in Annex II A, and B 7 and D 8 in
Annex III B);

 – altered susceptibility to pathogens facilita ting the dissemination of infectious diseases
and/or creating new reservoirs or vectors;

2. Measures to protect against these three types of adverse effects fall squarely within
Annex A(1)(b) of the SPS Agreement, which refers to measures applied "to protect human or animal
life or health … from risks arising from … toxins or disease-causing organisms in foods, beverages or
feedstuffs." The "adverse effects" set forth above concern the potential that a GMO product could be
toxic to or cause disease in (directly or by increasing susceptibility to disease) humans or animals,
which are the same risks as those enumerated in A nnex A(1)(b). This conclusion is confirmed by
each of the following information requirements for GMO notifications referenced in the first two
provisions above: (1) item II.A.11 in Annex III A, wh ich relates to "pathological traits" of GMOs,
including "infectivity, toxigenicity , virulence [and] allergenicity," (2) item II.C.2(i) in Annex III A,
which relates to "considerations for human health and animal health," arising from the compromised
clinical efficacy of such antibiotics including "toxi c or allergenic effects" of GMOs, (3) item B 7 in
Annex III B, which relates to "potential interacti ons, relevant to the GMO…including information on
toxic effects on humans," and (4) item D 8 in Annex III B, which relates to "toxic, allergenic or other
harmful effects" arising from GMO crops when u sed for "animal feedstuffs." For these reasons,
measures to address these effects fall within the Annex A(1)(b) of the SPS Agreement.

3. Measures to prevent the second and third types of adverse effects above also could fall within
Annex A(1)(a) of the SPS Agreement, which refers to measures applied "to protect animal or plant life
or health … from risks arising from the entry, est ablishment or spread of pests, diseases, disease-
carrying organisms or disease-causing organisms." A measure falls within this provision if the
adverse effects to animal health against which th e measure seeks to protect arise from exposure to a
GMO product other than a feedstuff.

4. Annex II, Section C.2.1 also includes the following "adverse effects":

 – effects on the dynamics of population species in the receiving environment and the
genetic diversity of each of these populations (see for example items IV B 8, 9 and 12
in Annex III A);

 – effects on biogeochemistry (biogeochemical cycles), particularly carbon and nitrogen
recycling through changes in soil decomposition of organic material (see for example
items II.A.11(f) and IV.B.15 in Annex A, and D 11 in Annex III B).

5. Measures to prevent these two types of adverse effects fall within the scope of Annex A(1)(a)
of the SPS Agreement, which refers to measures applied "to pr otect animal or plant life or health …
from risks arising from the entry, establishment or spread of pests," or Annex A(1)(d) of the SPS
Agreement, which refers to measures applied "to prevent or limit other damage within the territory of
the Member from the entry, establishment or spread of pests." Each of these adverse effects concerns
the impact of a GMO product as a "pest," which the SPS Agreement defines to include "weed." More
specifically, these adverse effects refer to the risk that a GMO product becomes a "weed," that is, a
persistent and invasive plant that grows in envi ronments where it is not wanted and overtakes other
plant species, raising broader ecological concerns.
1 The adverse effects, therefore, relate to "other
damage" caused by the "entry, establishment or spread of pests." This conclusion is confirmed by the
following information requirements for GMO notifica tions referenced in the two provisions above:
(1) items IV B 8 in Annex III A, which relates to the "potential for excessive population increase in
the environment," and (2) item IV B 9, which rela tes to the "competitive advantage of the GMOs in
relation to the unmodified [organisms]." Accordingl y, measures to prevent or minimize these adverse
effects fall within the scope of Annex A(1)(d) of the SPS Agreement.

-compromising prophylactic or therapeutic medical, veterinary, or plant protection
treatments, for example by transfer of gen es conferring resistance to antibiotics used
in human or veterinary medicine (see for example items II.A.11(e) and II.C.2(i)(iv) in
Annex III A);
6. Measures to prevent such adverse effects fa ll within the scope of Annex A(1)(a) of the SPS
Agreement, which refers to measures applied "to protect animal or plant life or health … from risks
arising from the entry, establishment or spread of…diseases, disease-carrying organisms or disease-
causing organisms." If the antibiotic marker gene compromises the clinical efficacy of antibiotics
used to protect animal life or health, then the measure would fall clearly within Annex A(1)(a).2

7. To the extent that the antibiotics in questi on are used to treat diseases arising from "disease-
causing organisms" found in food, beverages or f eedstuffs, the risks to human and animal life or
health arising from the compromised clinical e fficacy of such antibiotics would be covered by
Annex A(1)(b). To the extent that the antibioti cs in question are used to treat diseases in humans
arising from "diseases carried by animals, plants or products thereof, or from the entry, establishment
or spread of pests", the risks to human life or hea lth arising from the compromised clinical efficacy of
such antibiotics would be covered by Annex A(1)(c).

1 See Canada Answers to Panel Questions (7 March 2005), Question 120, paras. 10, 11.
2 See Canada Answers to Panel Questions (16 June 2004), Question 40, para. 74.

171. In Japan – Apples, the Appellate Body interpreted Article 5.7 of the SPS Agreement and
notably the phrase "in cases where relevant scientifi c evidence is insufficient". It stated at
para. 179 that:

Article 5.1 [...] informs the other provisions of Article 5, including Article 5.7.
We note, as well, that the second sentence of Article 5.7 refers to a "more
objective assessment of risks". These co ntextual elements militate in favour of a
link or relationship between the first requirement under Article 5.7 and the
obligation to perform a risk assessment under Article 5.1: "relevant scientific
evidence" will be "insufficient" within the meaning of Article 5.7 if the body of
available scientific evidence does not allow, in quantitative or qualitative terms,
the performance of an adequate a ssessment of risks as required under
Article 5.1 and as defined in Annex A to the SPS Agreement. [...] The question is
whether the relevant evidence [...] is sufficient to permit the evaluation of the
likelihood of entry, establishment or spread of, in this case, fire blight in Japan.
In this regard, please answer the following questions:

 (a) Is there a reason to believe that a lack of relevant scientific evidence could
prevent a Member from performing a risk assessment "as required under
Article 5.1 and as defined in Annex A to the SPS Agreement"? Or is it rather a
question of that Member perhaps being unable, due to the insufficiency of
scientific evidence, to conduct a fully obj ective risk assessment, such that any
measure based on that assessment migh t be maintained without sufficient
scientific evidence?

8. Canada is not sure that it fu lly understands the nature of the Panel's question, but it will do its
best to respond to what it believes the question to be.

9. Yes. It is possible that a lack of releva nt scientific evidence could prevent a Member from
performing a risk assessment as required under Article 5. 1 and as defined in para graph 4 of Annex A.
In the quoted passage, Canada understands the Appellate Body to be indicating that the threshold for a
finding that the "relevant scientific evidence is insufficient" and that Article 5.7 therefore might be
applicable is linked to the obliga tion to perform a risk assessment foun d in Article 5.1. Thus, it is
only when the relevant scientific ev idence is insufficient to perform a risk assessment as required by
Article 5.1, and as defined in Annex A(4) of the SPS Agreement, that Article 5.7 can be successfully
invoked. Earlier in the paragraph, the Appellate Body refers to Article 5.1 as a "key discipline". The
Appellate Body's reference to the phrase "a more objective assessment of risk" implies a connection
between this phrase and a risk assessment as defined in Annex A(4). Hence, the two questions posed
in paragraph (a) are in reality two sides of the same coin, with the proviso that Canada doubts that
there is such a thing as a "fully objective" risk assessment. Risk assessments, like all processes of
observation and evaluation involving human bei ngs, inevitably involve a certain amount of
subjectivity.

 (b) Does the phrase "more obj ective assessment of risks" in Article 5.7 support the
view that a provisional measure adopted in accordance with Article 5.7 must be
based on risk assessment, as required by Article 5.1? (Canada may wish to
elaborate further on what it has alread y said in its supplementary rebuttal in
relation to this point.)

10. The structure and relationship between Articl es 2.2, 5.1 and 5.7 suggest that the phrase "a
more objective assessment of risk" in Article 5.7 refers to a risk assessment as defined in Annex A(4).

However, this does not mean that the initial "measure adopted in accordance with Article 5.7" must be
based on a risk assessment of the same standard as that required by Article 5.1. That would be
contrary both to the logic underlying Article 5.7, a nd the text of that provision, which refers to the
adoption of a measure "on the basis of available pe rtinent information". As Canada has already
argued, the reference in the second sentence of Arti cle 5.7 to a "more objective" assessment of risk
implies that "on the basis of available pertinent information" means that a risk assessment of some
form must be carried out, even if it does not meet the standard set out in Annex A(4).
3 It is also clear
from the context that the "available pertinent inform ation" refers to scientific information concerning
risks to human, animal or plant life or health.

11. Furthermore, the text of Article 5.7, as well as logic, suggests that the phrase "a more
objective assessment of risk" means a risk assessment of a standard that will enable the Member
concerned to shift the legal basis for its measure , unless it repeals it entirely – from Article 5.7 to
Articles 5.1 and 2.2. This inference is supported by the following considerations. First, measures of
the type covered by Article 5.7 must be adopted provisionally. Second, a duty is imposed on the
WTO Member concerned to "seek to obtain the a dditional information necessary for a more objective
assessment of risk". Third, the Member concerned is required to review its measure according to the
"more objective assessment of risk". In other words, the initial, or provisional, measure is intended to
be a temporary solution while the Member gathers the scientific evidence necessary to complete a risk
assessment that meets the standard set out in Article 5.1 and Annex A(4).

172. Annex A(1) of the SPS Agreement sugg ests that "approval procedures" are SPS
measures. When a Member decides to delay the completion of such an approval procedure for
a number of days, would such action be another SPS measure within the meaning of
Annex A(1), or would such action rather need to be characterized as an application of an SPS
measure (the application of the approval procedure)?

12. Canada refers the Panel to Part V II of Canada's First Written Submission.

13. Canada understands the ques tion to be: under what circumstances can a delay in the
completion of an SPS approval procedure become an SPS measure. The answer, of course, depends
on the factual circumstances.

14. First, Canada agrees with the Panel that approval procedures are SPS measures. Annex A(1)
of the SPS Agreement not only suggests that they are SPS measu res; it states it explicitly: "Sanitary
and phytosantiary measures include all releva nt…procedures including…testing, inspection,
certification and approval procedures…".

15. Second, the scenario set out in the Panel's question differs considerably from the factual
situation in the present case. Canada would agree with the proposition that, if a Member simply
delayed making a final decision on the approval of a given product for a few days, and communicated
this in clear terms to the applicant, explaining wh y it was delaying the decision, how much time was
involved, and informed the applicant what, if an ything, it could do to expedite the process, this
appropriately would be characterized as "an applicat ion of an SPS measure", rather than a separate
SPS measure.

16. However, that is not the situation in this dis pute. In general, a delay in the completion of an
SPS approval procedure becomes an SPS measure when the source of the delay supersedes the
approval procedure as the measure that exerts eff ective control over subject matter of the approval
procedure, in this case the product applicati ons. The EC has decided not to decide. The moratorium

is a conscious decision on the part of the EC not to approve biotech products for an unspecified period
of time. The moratorium is a separate SPS measure, distinct from the approval procedure. Although
the moratorium is inextricably linked to the approval pro cedure by virtue of its motivation, and
through its effect on the approval procedure, the moratorium essentially renders that procedure
irrelevant, in the sense that it prevented the biotech products with outstanding applications from being
approved. In this light, the various product applica tions are subject not merely to a delay, but to
decisions not to approve (which is not the same as a decision to reject) the products. These decisions,
or product-specific marketing bans , are a direct consequence of the moratorium, but constitute
separate SPS measures. They also represent strong evidence of the existence of the moratorium.

17. Furthermore, Canada draws the Panel's atten tion to Canada's answer to Panel Question 45,
wherein Canada made the point that the EC's "decision not to decide", in many instances, can be
equated with a complete deni al to approve a given product.
4 Given the limited commercial shelf-life
of many of these products, a prolonged delay in a pproval – and by any reasonable measure delays of
five years or more must be considered prolo nged – has led to lost and irretrievable market
opportunities. By the time these products receive approval, if they ever do, the market will have
passed them by.

173. May the fact that existing approval legislation does not permit a Member to adopt
certain risk management measures which that Member considers appropriate serve as a
justification, for purposes of an analysis under Annex C(1)(a) of the SPS Agreement, for
delaying approval procedures conducted pursuan t to the existing legislation? Are the
provisions of Article 27 of the Vienna Convention on the Law of Treaties relevant to such a
situation?

18. To a degree, this question is related to the Panel's Question 48(f), and Canada refers the Panel
to paragraph 98 of Canada's Answers to the Panel's Questions (June 16, 2004).

19. The issue is not whether the WTO Member considers the risk management measures
appropriate, but whether the risk management measur es (SPS measures) are justified in relation to the
outcome of a risk assessment that meets the require ments of Article 5.1 and Annex A(4), and viewed
in the light of the Member's appropriate level of pr otection. That is, in the words of the Appellate
Body, "a panel has to determine whether an SPS measure is sufficiently supported or reasonably
warranted by the risk assessment".
5

20. If a risk management measure that is "suffi ciently supported or reasonably warranted by the
risk assessment" does not fall within the scope of th e Member's "existing approval legislation" and no
other risk management measure exists that would also achieve the Member's appropriate level of
protection, and which falls within the scope of the approval legislation, then it may be justified for the
Member concerned to delay approving the produc t until the approval legislation can be amended
accordingly. In other words, it may not cons titute "undue delay" within the meaning of
Annex C(1)(a).

21. However, this conclusion must be subject to the proviso that the Member concerned is also
under an obligation to make the necessary legislativ e changes "without undue delay" so as to be in a
position to make a final decision as quickly as possible in the circumstances.

22. In the context of the above situation, Article 27 of the Vienna Convention would not be a
relevant consideration to the extent that it is not a situation where a party to a treaty is failing to

4 Canada's Answers to Questions from the Panel, 16 June 2004, para. 86.
5 EC – Hormones, Report of the Appellate Body, para. 186.

perform its obligations. The scenario described in Ca nada's answer is one where the party is acting in
a manner consistent with its treaty obligations, once again, subject to the proviso that it must make the
necessary legislative changes as quickly as possible in the circumstances.

23. If, on the other hand, the risk management m easure in question is not sufficiently supported or
reasonably warranted by a risk assessment that meet s the requirements of Article 5.1 and Annex A(4)
or the existing legislation allows for the impositi on of the risk manageme nt measure in question,
6 any
delay in the completion of an approval procedure in order to make legislative changes to allow such a
risk management measure to be adopted in a manner consistent with the Member's internal law would
be undue, and Article 27 of the Vienna Convention would apply.

174. With regard to Article 2.2 of the TBT Agreement:

 (a) Please explain the phrase "the risks no n-fulfilment [of a legitimate objective]
would create" and illustrate using an example.

24. The phrase "the risks non-fulfilment [of a le gitimate objective] would create" can only be
understood with reference to the underlying purpose of Article 2.2 of the TBT Agreement, which is the
proscription of "unnecessary obstacles to interna tional trade". Technical regulations can be
unnecessary obstacles to international trade in several ways. Measures that are not related to a
"legitimate objective", or that do not fulfill or materially contribute to the fulfilment of, a "legitimate
objective", are unnecessary obstacles to international trade. If the objective is legitimate and the
technical regulation fulfills it or materially contri butes to its fulfilment, it can still be an unnecessary
obstacle to trade if it is more trade-restrictive than is necessary. This would be the case if an
alternative measure exists that would achieve the same objective and is less trade-restrictive. The
requirement to "tak[e] account of the risks non-fulfilment would create" imposes an obligation of
proportionality that is linked to the legitimate objectiv e. In other words, whether a given measure is
more trade-restrictive than is necessary depends, in part, on the specific risks being addressed. The
nature and magnitude of the risks involved must be taken into account in determining how trade-
restrictive a technical regulation can be without b ecoming an unnecessary obstacle to trade. In this
context, the "risks non-fulfilment would create" m eans the risks that would be realized, in other
words, the occurrence of adverse effects.

25. As an example, let us say that a technical regulation is designed to protect human beings from
the risks arising from using a certain household ch emical cleaning product. However, the hazards
inherent in the chemical are mild; although the ch emical has toxic properties, it does not cause any
serious acute impairment of health, nor does it give rise to any chronic negative health effects. At
most, upon inhalation or ingestion at a given dose, a person might suffer from a mild headache and
nausea that passes quickly. To seek to prevent even these negative ef fects, the regulator has several
choices: it can require labelling to warn prospectiv e users; it can require the concentration of the
chemical to be so low that the adverse effect is essentially neutralized, keeping in mind that the higher
the concentration, the more effective the cleaning product is; and/or it can require a child-proof cap
and spraying mechanism. It can also ban the use of the chemical for this pur pose. In this scenario,
the objective is legitimate and all of the proposed measures either fulfill or materially contribute to the
fulfilment of the objective. Some are more trade -restrictive than others. The determination of
whether any one measure is "more trade-restrictive than necessary to fulfil [the] legitimate objective"
has to take into account the risks – identified above as being fairly mild – that non-fulfilment of the
legitimate objective would create.

6 Canada Second Written Submission, Part II.B.1 and 2.

 (b) Article 2.2 refers to "scientific informat ion" which must be taken into account in
assessing risks. Article 5.2 of the S PS Agreement, on the other hand, refers to
"scientific evidence". Are these different concepts? Why?

26. The difference between "scientific information" and "scientific eviden ce" can be seen in the
ordinary meanings of the words "information" and "evidence." The ordinary meaning of
"information" is "[k]nowledge or facts communicat ed about a particular subject, event, etc."
7 T h e
ordinary meaning of "evidence" is "facts or test imony supporting a conclusion, statement or belief". 8
It is logical that the SPS drafters would use the term "scientific evidence" in an agreement where a
core obligation is to base SPS measures on a scientific risk assessment. This obligation requires WTO
Members to provide specific factual support that meets a higher standard of quality and reliability,
that is, "evidence", for their SPS measures. The specific reference to "scientific evidence" in
Article 5.2 is a reflection of the requirements of Ar ticle 2.2 that a measure not be maintained without
sufficient scientific evidence, and the definition of a risk assessment in Annex A(4).

27. The TBT Agreement , by contrast, does not require, as an explicit obligation, that technical
regulations be based on a risk assessment. TBT draf ters used the term "scientific information" in
respect of an obligation that requires Members to take account of scientific facts, where they are
relevant to the selection of a particular measure. However, the TBT Agreement does not necessarily
require those facts, as a matter of legal obligation per se, to be of a quality commensurate with that
inherent in a risk assessment as defined in the SPS Agreement. In basic terms, the distinction between
"scientific evidence" in Article 5.2 of the SPS Agreement and "scientific information" in Article 2.2 of
the TBT Agreement relates to the differences in the respectiv e obligations of the two agreements for
measures to have a factual and/or scientific basis.

28. This does not mean, however, that a technical regulation would never need to be based on a
full risk assessment. It is quite possible, in Canada 's view, that some types of technical regulations
will need to be based on a full risk assessment, and that, as a matter of an evidentiary burden, the
WTO Member whose technical regulation is in issue will not be able to demonstrate that its measure
is in fact based on such a risk assessment. Whether a technical regulation, as a matter of fact, needs to
be based on a risk assessment can only be determined on a case-by-case basis.

29. In the particular case of the product-specific marketing bans and the EC Member State
national measures , risk assessments are necessary in order for demonstrate that these measures are
indeed not more trade-restrictive than is necessar y to achieve a legitimate objective, taking into
account the risks that non-fulfilment would create. As Canada has already demonstrated,
9 there is no
evidence to support the need for complete bans on e ither the biotech products of interest to Canada
that are subject to the product-specific marketing bans, or the biotech products that are subject to the
EC Member State national measures.

175. Are measures applied to ensure co-existen ce of biotech crops and non-biotech crops
covered by Annex A(1) of the SPS Agreement or do they fall, in whole or in part, outside of the
scope of Annex A(1)?

30. Canada understands co-existence to be about reducing the unintended admixture of biotech
and non-biotech seeds or crops. In the EC, the intentional or adventitious presence of biotech

7 The New Shorter Oxford Dictionary, vol. 1 (Oxford: Clarendon, 1993), p. 1364. (Exhibit CDA-205))
8 Ibid., p. 867. (Exhibit CDA-206)
9 Canada First Written Submission, paras. 337-352 and 486-499.

products above a prescribed threshold triggers the need for crops to be labelled as containing GMOs.
10
This is a requirement that has been imposed by EC legislation. The consistency of this legislation
with the EC's WTO obligations has yet to be determined and is not an issue in this case. What is in
issue, however, is whether the absence of EC me asures relating to co-existence can be a legitimate
reason for delaying an SPS approval procedure.11

31. A distinction must be made between risks to plant life and health arising from the admixture
of biotech and non-biotech seeds or crops and the "potential economic impact " arising from the
imposition of labelling requirem ents. A measure applied for the purpose of protecting plant life or
health from risks arising from the admixture of biotech and non-biotech seeds or crops would fall
within the scope of Annex A(1)(a) or (d) of the SPS Agreement . For example, where a biotech
product could be considered a "pest" for purposes of the SPS Agreement (e.g. if the biotech crop had
traits that conferred greater fitness resulti ng in enhanced "invasiveness" or "weediness"
12), the
economic impact of introduction of such pest could be considered "other damage" within the scope of
Annex A(1)(d) of the SPS Agreement . On the other hand, a measure applied solely to reduce or
prevent the "potential economic impacts " of the admixture of biotech and non-biotech products
resulting from the imposition of labelling thresholds for biotech products would not fall under the SPS
Agreement.

32. Were the EC's co-existence measures adopted solely to reduce or prevent the "potential
economic impacts " of the admixture of biotech and non-biotech products resulting from the
imposition of labelling thresholds for GM products, the pertinent question in this case would be
whether or not the economic aspects of co-existen ce can be a legitimate justification for delaying
indefinitely an SPS approval procedure. In Canada 's view, concerns about co-existence, arising from
labelling thresholds for marketing purposes, cannot serve as a legitimate reason for delaying an
approval procedure under the SPS Agreement . For instance, the adoption of future measures to
enhance consumer or producer choice ( e.g. a quality grading system for canned vegetables or
labelling purely for consumer information purposes) w ould not be a legitimate justification to delay
the approval of a product under an SPS approval pro cedure pursuant to Annex C(1)(a). As the panel
concluded in Indonesia – Autos , "the obligations contained in the WTO Agreement are generally
cumulative, can be complied with simultaneously and ... different aspects and sometimes the same
aspects of [a measure] can be subj ect to various provisions of the WTO Agreement ."
13 Just as the
panel in Indonesia – Autos found that compliance with one WTO Agreement would not excuse a
Member from violating another WTO Agreement, so too must the Panel find here that EC must meet
its obligations under the SPS Agreement even if another WTO Agreement were also to apply to the
measure at issue.

33. Tellingly, the European Commission itself has stated that the economic aspects of co-
existence must be distinguished from "the envi ronmental and health aspects dealt with under
Directive 2001/18/EC ".
14 It logically follows that the EC and its Member States cannot block
approvals under Directive 2001/18 on the basis of a putative "economic impact" of the admixture of

10 EC, Commission Recommendation of 23 July 2003 on guidelines for the d evelopment of national
strategies and best practices to ensure the co-existence of genetically modified crops with conventional and
organic farming, C(2003), pp. 6 and 7. (Exhibit CDA-165)
11 See the Belgian Competent Authorities rational for failing to approve Ms8xRf3, Exhibit EC-63 –
attachment 167, p. 3.
12 Canada Third Written Submission, paras. 68 – 75.
13 Indonesia – Autos, Report of the Panel, para. 14.56.
14 EC, Commission Recommendation of 23 July 2003 on guidelines for the d evelopment of national
strategies and best practices to ensure the co-existence of genetically modified crops with conventional and
organic farming, C(2003), pp. 6 and 7. (Exhibit CDA-165)

biotech and non-biotech crops where no risks to human health and the environment have been
identified. To do so, would not only violate the EC's obligations under the SPS Agreement, but would
seemingly violate the EC's own internal law.

34. In any event, the EC itself has failed to distinguish between the economic aspects and the
environmental health aspects of co-existence a nd has instead, when it suits its own purposes,
attempted to distort an economic issue, of its own cr eation, into an issue concerning risks to the plant
life and health.

35. Canada has demonstrated that the purposes of the moratorium and the product-specific
marketing bans must be inferred from the context, that the declarations – repeated and consistent – of
the EC Member States confirm that the purpose of the moratorium is to protect human health and
environment from risks arising from biotech products, and that it is reasonable to infer the purpose of
the moratorium and the product specific marketing bans is to protect against the same risks to human
health and the environment against which the EC's approval legislation is intended to protect.
15 In its
First Written Submission, Canada demonstrated that the purpose of the legislation, as expressed in
preambular language and in its legislative history, is the protection from risks of the type described in
Annex A of the SPS Agreement .16 Similarly, the nine Member State national measures subject to
challenge in this dispute fall within the scope of Annex A of the SPS Agreement.17

36. Throughout these proceedings, the EC has conced ed that its measures are designed to address
risks to human health and the environment. Ind eed, in its First Written Submission, the EC entitled
the relevant section "Possible harmful effects on human health and the environment."18

37. Yet in the face of the many statements by EC Member States and the overwhelming evidence
that the EC's measures are SPS measures, the EC now comes before the Panel and appears to suggest
instead that the measures were and are taken to a ddress the economic risk to farmers arising from co-
existence. As the economic risk to farmers as a result of the EC's own labe lling legislation would not
be covered by the SPS Agreement , the EC would have the Panel conclude that the measures are
therefore not subject to the disciplines of the SPS Agreement.

38. Such a conclusion would be patently inco rrect. The evidence presented by Canada during
these proceedings and admitted by the EC in its own legislation demonstrates that these measures
were taken to address the risks identified in Annex A of the SPS Agreement. That they might also be
taken to address other policy objectives is not relevant to their coverage under the SPS Agreement.
The drafters of the SPS Agreement could have written that an SPS measure was one that is applied
"solely" or "primarily" or "chiefly" to one of the enumerated policy objectives. They did not do so.
They provided that a measure that "is applied" to accomplish one of the enumerated policy objectives
and that affects trade would fall under the scope of the SPS Agreement, as set forth in Article 1.

15 Canada First Written Submission, paras. 160-162.
16 EC – Hormones , Report of the Panel, para. 8.25. ("That the EC measures are, inter alia, "applied to
protect human ... life or health" can be inferred from the preambles to, and legislative history of, [the relevant
EC Directives].")
17 Canada First Written Submission, paras. 376-385.
18 EC First Written Submission, p. 14.

For all complaining parties

178. Please indicate whether the following allege d effects of biotech products fall within any
of the subparagraphs of Annex A(1) of the SPS Agreement:

 (a) Environmental components of biodiversi ty "outside human, animal or plant life
or health, such as the ecological comple xes referred to in the Convention on
Biodiversity" (EC rebuttal, para. 266).

39. If humans, animals, and plants comprise the universe of living things and biodiversity is
concerned with the diversity of living things, then it is difficult to understand what component of
biodiversity is "outside human, animal or plant life or health." A measure taken to protect the
"environmental components of biodiversity" certainly could fall within Annex A(1), depending on the
type of risks against which the measure seeks to pr otect. Ecological processes, for instance, could fall
within "other damage" under Annex A(1)(d). See Canada's Answers to Panel Question 120.

 (b) "A predator insect eating another insect because it is itself growing better on a
diet of Bt maize" (EC rebuttal, para. 266).

40. It is unclear to Canada to what the EC is referring in para. 266 as the EC fails to identify any
concrete example of this type of risk, much l ess identify a risk assessment conducted by one of its
scientific committees where this risk is evaluated. In Canada's view, this is yet another example of
the EC resorting to hypothetical concerns that b ear no relationship to the actual risks posed by the
biotech products in question. Such hypothetical concerns cannot serve to transform an SPS measure
into a non-SPS measure.

41. In any event, "a predator insect eating a nother insect because it is itself growing better on a
diet of Bt maize" would fall within "other damage…f rom the entry, establishment or spread of pests."
If the introduction of a biotech plant facilitates the "spread of pests", the resulting damage could be
considered "other damage from … the spread of pest s." The biotech product does not have to be the
pest in issue.

 (c) Human health risks arising from oc cupational exposure to a substance in a
biotech product that is a toxin for insects (e.g., the Bt toxin) as opposed to risks
arising from the consumption of the biot ech product (EC rebuttal, para. 316).
(The United States may elaborate on its response to Panel Question 73 or
comment on the European Communities' response).

42. Canada agrees with the response of the Unite d States to Panel Question 73. A measure to
protect humans against occupational exposures from Bt toxins in corn, which is consumed as either a
food or feedstuff, are measures to "protect human or animal life or health fro m "risks arising from …
toxins … in foods … or feedstuffs" and are accordingly, subject to the SPS Agreement .
Annex A(1)(b) does not specify or restrict the mode of exposure. Not surprisingly, the EC disagrees,
suggesting that such a proposition might mean that "a heavy bar containing highly toxic
concentrations of lead" would be subject to the SPS Agreement. As a "heavy bar" is unlikely to be
consumed as a food or feedstuff, the EC example is simply specious.

43. Canada also notes that the Italian authorities have put forth no evidence of human health risks
arising from occupational exposure to Bt toxins in ma ize or any other food for that matter. The study

that the Italians appear to rely on involved the application of Bt pesticides in spray form.
19 This study
did not appear to the Italian scientific experts to be relevant to the determination of the safety of Bt
maize.20 This is yet another example of the EC reso rting to hypothetical concerns that bear no
relationship to the actual risks posed by the biotech product in question, and which have already been
rejected by its own scientists. Such hypothetical concerns cannot serve to transform an SPS measure
into a non-SPS measure.

179. Please comment on the European Communi ties' statement that "for the purposes
specifically of proving a 'moratorium' that ap plies across the board, it does not suffice to
address only a limited selection of product applications" (EC rebuttal, footnote 212).

44. Canada does not agree. As Canada has stated on numerous occasions, the moratorium did not
result in the complete shutdown of the EC biotech approval procedures. There was some progress
made in respect of some applications. However, the moratorium meant that regardless of the merits
of particular product applications, not a single deci sion was made by the EC to approve or reject a
biotech product under the relevant approval procedures, not just for a "limited selection of products".
The EC made a decision not to decide, or in other words, not to complete its approval procedures for
all biotech products.

45. The complainants need not provide eviden ce of the status of each and every product
application that is lodged at some point in the EC's approval procedures to establish the existence of a
moratorium on the consideration of applications for, or granting of, approval of biotech products.
Apart from the fact that not a single product application was either approved or definitively rejected
between October 1998 and May 2004, Canada has pr ovided ample evidence of the existence of the
moratorium and the product-specific marketing bans , being the manifestation of the moratorium in
the context of the approval procedures of the four specific products of concern to Canada. Having
established a prima facie case, it is for the EC to refute the existence of the moratorium and product-
specific marketing bans.

For Argentina and Canada

180. In relation to antibiotic marker gene s, please answer the following questions:

 (a) Do you agree with the United States that antibiotic marker genes can be
considered as food "additives" within the meaning of Annex A(1)(b) of the SPS
Agreement (see para. 22 of attachment II of the US rebuttal)? If not, is the
protection against any human health risk s arising from the development of
diseases which relevant antibiotics would be used to treat covered by another
subparagraph of Annex A(1)?

46. Canada is of the view that the United St ates' interpretation of the term "additive" is
linguistically plausible. An antibiotic resistance ma rker gene is a "substance" in the basic sense of
that term, and nothing in the Codex definition serv es to exclude the possib ility that an antibiotic
resistance marker gene can be considered an add itive. Canada also observes that the EC has not
offered any concrete evidence or argumentation to refute the interpretive approach offered by the
United States.

19 L. Bernstein et al., "Immune Responses in Farm Workers after Exposure to Baccillus Thuringiensis
Pesticides" Environmental Health Perspectives, 107:575, 1999. (Exhibit CDA-201)
20 Exhibit EC-157 – Attachment 002, pp. 6-7.

 (b) Please comment on the European Comm unities' assertion that "there is concern
about the development of antibiotic resistance in connection with 'plants' as
such" (EC rebuttal, para. 64) and on wh ether a measure applied to address this
concern would fall within the scope of Annex A(1).

47. The phrase "there is concern about the deve lopment of antibiotic resistance in connection
with 'plants' as such" is unclear . The absence of any kind of documentation or other supporting
evidence contributes to the obscurity of the statemen t. If Canada understands the thrust of the EC's
argument correctly, the EC is referring to the transfer of antibiotic resistance directly from plants to,
presumably animals and humans. This seems to be borne out by the two preceding sentences, which
suggest that antibiotic resistance may develop in humans and animals through uptake of antibiotic
resistance genes through means other than food and feed. The EC does not explain specifically how
this would occur, or why this "may" be an "important factor".

48. In any event, the EC's comment is not rele vant to this dispute unless the source of this
antibiotic resistance is materials from a transgenic plant carrying the an tibiotic resistance marker gene
(ARM) gene. To the extent that these ARM genes inadvertently find their way into food and feed,
they might be considered contaminants and therefore Annex A(1)(b) would apply.

49. Canada also notes that this appears to be a nother of the EC's many hypothetical scenarios
involving, at worst, a minute risk relative to the ready transfer of antibiotic resistance genes among
bacteria, and relative to the emergence of novel resistance genes which are (a) increasingly frequent,
and (b) have nothing to do with ARM genes in plants at all. The EC even admits in its Comments on
the Scientific and Technical Advice that "since marker genes are the same as those already spread in
nature, it is difficult to trace them."
21 In such a case, it is difficult to see what risk they could pose.

181. With reference to Argentina's and Canada's claims in respect of the member State
safeguard measures under Article 2.1 of the TBT Agreement, do the relevant safeguard
measures apply to the relevant biotech products when imported into the territory of the
relevant member States and when produced in the relevant member States, or do they apply
only when the products are imported?

50. In the case of the two French bans, on oilseed rape Topas 19/2 and Ms1/Rf1, the ministerial
decrees specify that commerciali zation is suspended, product shall be withdrawn from sale, and
importation is prohibited.
22 In the case of the Austrian ban on maize T25, the ordinance banned
commercialization.23 The Italian ministerial decree ba nning maize MON809, MON810, T25, and
Bt11 specified that it was suspending the commercialization and utilization.24

21 EC Comments on the Scientific and Technical Advice to the Panel (28 January 2005), para. 105.
22 France, Minister of Agriculture and Fishing, Decr ee of 16 November 1998 involving suspension of
the commercialization of genetically modified colza by virtue of article 16 of directive 90/220/CEE of 23 April
1990, pursuant to decision 98/291/CE of 22 April 1998, J.O., 18 November 1998, 17379 (English translation
and French original) (Exhibit CDA-64); France, Minister of Agriculture an d Fishing, Decree of 16 November
1998 involving suspension of the commercialization of genetically modified colza by virtue of article 16 of
directive 90/220/CEE of 23 April 1990, pursuant to decision 96/158/CE of 6 February 1996, J.O., 18 November
1998, 17379 (English translation and French original). (Exhibit CDA-68)
23 Austria, Federal Minister of Social Security and Generations, Ordinance issued 28 April 2000
prohibiting the commercialization of the genetically altered corn Zea Mays L. T25 in Austria, approved by the
European Commission on 22 April 1998 under Decision 98/293/EC, Federal Gazette, vol. 2000, 28 April 2000
(English translation and German original). (Exhibit CDA-76)
24 Italy, President of th e Council of Ministers, Pr ecautionary suspension of the commercialization and
utilization of certain transgenic products (Corn BT 11 , Corn MON 810, Corn MON 809 and CORN T25) in the

51. In fact, with the exception of the Greek import ban, none of the measures specify that they
apply only when the products are imported. Give n the broad language used, it must be assumed that
the measures apply to the relevant biotech products when imported into the territory of the respective
Member States and when they are produced in those Member States.

For Canada and the United States

182. Could Canada and the United States provide examples of why and how allergens in food
can be said to "destroy [] life or injure [] health" (US rebuttal, attachment II, para. 27)or
"destroy[] life or impair[] seriously the functions of organs or tissues" (Canada's supplementary
rebuttal, para. 51)?

52. An allergen present in food can cause a variety of symptoms in individuals susceptible to that
allergen. Some examples of food allergic reactions include angioe dema (swelling and redness of the
skin), urticaria (itchy hives), allergic rhinitis (runny nose), asthma, and anaphylaxis (a sudden and
severe reaction characterized by a sudden drop in blood pressure and breathing difficulties that can be
fatal). Thus, an allergen can "destroy life or impair seriously the functions of organs or tissues".

For Canada

184. At para. 24 of Canada's second oral statement it is stated that if there is credible
scientific evidence that the continued "processing " of applications under an existing approval
regime would give rise to actual risks to human he alth or the environment, a suspension of an
approval regime may be warranted.

 (a) What does Canada mean by "pro cessing" of applications? Their final
approval?

53. Canada means the final approval of the product resulting in the placing on the market of the
product.

 (b) If so, and if there was scientific evidence of an actual risk, why should a Member
not be expected, in the light of Annex C(1)(a) of the SPS Agreement, to complete
its approval procedures and either grant marketing approvals subject to
appropriate conditions, or to deny marketing approvals temporarily, with a
possibility to review the continued justification of denying marketing approval
once relevant circumstances change (e.g., the regulatory regime has been
updated)?

54. Canada agrees that, if there was scientific ev idence of an actual risk, a Member should, in the
light of its obligations under Annex C(1)(a) of the SPS Agreement, complete its approval procedure
and either grant marketing approvals subject to appropriate conditions, or to deny marketing
approvals temporarily, with the view to review ing the continued justification for denying the
marketing approval once the regulatory regime has been updated. The type of circumstances to
which Canada alluded in paragr aph 24 of its Second Oral Statement are addressed in Canada's
response to Question 173 above.

national territory, according to art. 12 of the regulation (EC) No. 258/97, 4 August 2000, Official Gazette, 8
August 2000, 184 (English translation and Italian original). (Exhibit CDA-78)

185. Canada's submissions on the alleged produc t-specific marketing bans are complex. At
paras. 121 and 123 of its supplementary rebutta l, Canada says that "[i]n relation to the
product-specific marketing bans, the measure at i ssue is the moratorium", even though Canada
also maintains that the alleged bans are measures in their own right. Similarly, at para. 203 of
its supplementary rebuttal, Canada says that "[i]n relation to the product-specific marketing
bans, one of the central issues before this Panel is whether, in the light of the moratorium and
given the resulting excessive delays in the proces sing of the applications in question, there was
an effective 'political' decision on the part of the EC not to approve these products". These
statements appear to suggest that the alleged pr oduct-specific marketing bans are the result of
the alleged decision on the part of the EC to stop authorizing any biotech product (general
moratorium). Later in the same submission, at para. 225, Canada argues that in respect of one
particular product (Ms8xRf3), a marketing ban arose only in March 2000. And Canada
suggests that any delay following that date was undue. In a similar vein, para. 192 of the same
submission states that the alleged product-speci fic marketing bans have caused undue delay in
the completion of the approval procedures for th e relevant products. Is Canada arguing that
the alleged product-specific bans, i.e., the measu res it is challenging, may have been adopted
after the alleged adoption, in 1998, of the decision to stop authorizing any biotech products
(general moratorium)? And is Ca nada arguing that once the alleged bans were adopted, they
gave rise to undue delays contrary to Annex C(1)(a) of the SPS Agreement?

55. The product-specific marketing bans are a direct consequence of the moratorium as applied to
individual product applications. They are also proof of the moratorium and, for Canada, the most
injurious manifestation of the moratorium.
25 They are however, distinct measures from the
moratorium and give rise to distinct violations of the WTO Agreement. The arguments in relation to
product-specific marketing bans are intended to focus on the direct and detrimental impact of the
moratorium on specific product applications.

56. In principle, the adoption of the moratorium led to the adoption of the product-specific
marketing bans. However, in some cases, it appears that the Commission attempted, unsuccessfully,
to convince the EC Member States to lift the moratorium. In the case of Ms8xRf3, in order to give
the Commission the benefit of the doubt in its attempt to break the moratorium and convince EC
Member States to adopt the Commission so-called interim approach, Canada has indicated the
alternative date of March 2000 as the date the product-specific marketing ban in relation to this
product was unquestionably imposed.

57. Canada is arguing that the product specific marketing bans imposed on each product have
caused undue delay in the completion of the approval pr ocedures. In respect of each of the specific
products, Canada has demonstrated specific instan ces of undue delay. The delay was not simply
because of inadvertence or neglect, but because of a decision not to complete the approval procedure.

186. Please explain the contrast between Canada 's statement that in determining whether a
delay is undue within the meaning of Annex C(1)(a) of the SPS Agreement, both the reason for
the delay and its duration must be taken into account (Canada's supplementary rebuttal,
para. 188) and the assertion that "a delay of seven years in approving this product [...] is, by any
reasonable standard, 'undue'" (Canada's second or al statement, para. 57 [similar statement at
para. 63]).

58. To the extent that there is a contrast between Canada's statements in paragraph 238 of its First
Written Submission and paragraph 188 of its Supplementary Rebuttal, and its assertions regarding the

failure of the EC to approve the product applicati ons for GT73 and Ms8xRf3 in paragraphs 57 and 63
of its Second Oral Statement, that contrast is more apparent than real.

59. As Canada noted in para graphs 57 and 63 of its Second Oral Statement, these product
applications have been in the system for approximately seven and nine years, respectively. In the case
of GT73, if the time is counted from the date wh en the notifier first submitted its application to
France, the amount of time that the product has been in the system actually rises to almost 10 years!
26
The length of time it has taken, so far, for these pr oducts to move through th e approval system has to
raise serious questions about whether the failure to make a decision amounts to undue delay, keeping
in mind that they still have not been approved.

60. However, the amount of time these product a pplications have languished in the EC's approval
procedure is not the sole reason for Canada's clai m that the delays have been, by any reasonable
standard, undue. First and foremost, the EC has had in place, since October 1998, a moratorium on
the approval of new agricultural biotech products. Th e EC has failed to demonstrate why this across-
the-board marketing ban on these products was neces sary. Furthermore, in the case of each product
application, Canada has demonstrated that the EC has not put forward a cogent rationale, based on
scientific evidence, for why it has refused to approve these products. In other words, the refusal to
approve these products is not based on a risk assessment, despite numerous favourable risk
assessments conducted by the EC's own scientific comm ittees. Canada has also demonstrated that the
EC's refusal to approve these products amounts to an arbitrary and unjustifiable distinction in the
application of its appropriate level of protection. It is for these reasons, as well, that the EC's failure
to approve GT73 and Ms8xRf3 (as well as Ms1xRf1 and Ms1xRf2) is both ex cessive and unjustified,
and therefore amounts to undue delay, contrary to paragraph 1(a) of Annex C and Article 8 of the SPS
Agreement.
27

187. With reference to para. 76 of Canada's supplementary rebuttal, please clarify whether a
measure applied to protect against risks to wild fauna from increased use of the herbicide
associated with a biotech crop or another herb icide, due to the development of herbicide
resistance, falls within the scope of Annex A(1) of the SPS Agreement. If so, please indicate the
relevant subparagraph.

61. First, Canada would like to emphasize that the introduction of a biotech product does not
necessarily result in the increased use of the associated herbicide. While herbicide-tolerant crops
permit greater flexibility in applica tion of the associated herbicide, ( e.g. the application of the
herbicide can be tailored to the actual weed pressure after the crop has emerged),
28 this does not imply
that herbicide use will increase or that wild fa una will be affected. If one is concerned about
increased herbicide use, one could impose restrictions on the use of the herbicide.

62. Second, the EC attempts to conflate risks as sociated with herbicide use with risks "arising
from" biotech crops. At the same time, the EC atte mpts to rely on an artificial distinction about the
cause of the risks to avoid compliance with the SPS Agreement. The EC is attempting to have it both
ways – suggesting that the risks arising from the u se of herbicides is a legitimate justification for
denying approval of a biotech product while also suggesting that such risks do not "arise from" the
introduction of the biotech product.

27 Canada First Written Submission, paras. 292-97.
28 See for example Exhibit EC-63 – attachment 163.

63. Canada does not agree that the EC can have it both ways. Contrary to the EC's assertions,
29
the phrase "arising from" does not require that the risk be direct or immediate. If the biotech product
qualifies as a "pest" that needs to be controlled with herbicides, any resulting risks to wild fauna "arise
from" the pest. It is the presence of that pest that triggers the sequence of events that ultimately leads
to damage to wild fauna, if any such damage actua lly exists (the absence of evidence of such a risk
implies it is yet another purely specu lative risk raised by the EC). Consequently, measures applied to
protect against risks to wild fauna from increased or altered use of herbicides, would fall within either
Annex A(1)(a) as measures applied to protect "animal [including wild fauna] life or health…from
risks arising from the entry, establishment or spread of pests " or, for good measure, Annex A(1)(d) as
measures applied to "prevent or limit other dama ge…from the entry, establishment or spread of
pests."

188. Please comment on para. 14 of the European Communities' second oral statement. Does
para. 20 imply that if the use of glufosinate-ammonium has not already been authorized in
Belgium under the relevant pesticide legislation, the potential effects of its use is a justification
for failing to grant approval of MS8xRF3 (see paras. 235, 240 and 246 of Canada's
supplementary rebuttal)? In this context, plea se also address the EC assertion that "the use of
the herbicide may affect the composition of the food or feed resulting from the HTGM crop as
compared with its non-GM equivalent" (EC se cond oral statement with regard to expert
meeting, para. 11).

64. Canada understands that when the Panel refe rs to paragraph 20 of the EC's Second Oral
Statement it intended to refer to paragraph 14. Paragraph 20 does not appear to relate to this issue.

65. In paragraph 14, the EC stated "as can be seen from the authorisation cited in footnote 208 of
Canada's supplementary rebuttal submission, that au thorisation is for a different use (seed production
only) for a different transformation event (MS1xRF2). " The EC claims that this has no relevance to
the authorization for Ms8xRf3. This assertion is without foundation.

66. First, "seed production" refers to the use to which the seeds may be put.
30 Regardless of the
end use of the seeds (whether for seed production, hu man food or animal feed), one still has to grow
the crop. The end use of the seeds has no effect on the use pattern of the herbicide (timing,
application method, frequency, dosage etc) and consequently no impact on the risks to the
environment from the use of the herbicide. The EC's attempt to dismiss the relevance of this
herbicide authorization on the basis that it involves "seed production" is devoid of logic.

67. The authorization of gluf osinate ammonium was limited to seed production because at the
time it had yet to be assessed for food and feed purposes. As the Belgian scientific experts, reviewing
the application for approval of Ms8xRf3, observed:

In 1996, questions were raised concerning the lack of toxicological tests for the
metabolites and residues derived from glufosinate ammonium herbicides. At that
time, the use of glufosinate ammonium as a total herbicide was authorized in
Belgium, but not the use of the herbicide on herbicide-tolerant plants. For this
reason, AgrEvo handed in a dossier for the broadening of the use of the herbicide
'Liberty' under the Directive 91/414/EEC. The risk assessment of the herbicide use

29 EC Rebuttal Submission, para. 63.
30 See for example Commission Decision 96/158/EC , authorizing oilseed rape Ms1xRf1. That
Decision limited the consent to "cover the notified use of the product for growing for obtaining seed , but does
not extend to the use for human food or animal food, without prejudice to any future assessment of the product
for such use." Exhibit CDA-62, p. 2, para. 2(b).

and thus the toxicity of glufosinate amm onium and metabolites were assessed by the
Belgian Health Council within the framew ork of the plant protection products
Directive 91/414/EEC . End 2000 [sic], the Health Council gave a positive opinion
for the use of glufosinate ammoni um on herbicide-tolerant plants . The final
authorization of the Ministry is not yet granted.31
68. Thus, the use of herbicide for other uses has now been assessed, although the final
authorization has yet to be granted. Perhaps the EC could provide the Panel with a copy of the Health
Council's positive opinion and explain why the Ministry has not yet granted final authorization.

69. Second, in terms of the EC's attempt to dism iss the relevance of the herbicide authorization on
the basis of a "different transformation" event, the Belgian authorization for glufosinate-ammonium
for use on genetically modified oilseed rape does not limit the application of the herbicide to a
specific transformation event. 32 To the contrary, the herbicide authorization merely states "for
genetically modified oilseed rape." The statem ent by the Belgian scientific experts quoted above
supports the conclusion that the authorization for the use of the herbicide glufosinate ammonium is for
oilseed rape generally and is not limited to a singl e transformation event. Yet again, the EC appears
to be advancing specious claims.

70. In any event, the potential impact on the e nvironment or "biodiversity" from the use of the
herbicide with oilseed rape Ms1xRf2 is equivalent to the use of that herbicide with oilseed rape
Ms8xRf3. The only significant difference between Ms 8xRf3 and Ms1xRf2 is that Ms1xRf2 contains
the nptII antibiotic resistance marker gene, while Ms 8xRf3 does not. Consequently, the different
transformation event has no impact on the pattern of use of the herbicide or potential risks to the
environment.

71. Paragraph 14 of the EC Second Oral Statem ent should be seen for what it is – a groundless
attempt to confuse in order to distract the Panel from the Belgian authority's patent inconsistency of
basing its failure to approve Ms8xRf3 on the puta tive risks from herbicide use while Belgian's own
pesticide authorities expressly authorized the herbicide for use with GMHT oilseed rape.

72. With that as background, Canada will now r espond to the Panel's Question. The absence of
the authorization of a particular herbicide use ca nnot serve as a justification for refusing to grant
approval for a biotech product. As the EC has r ecognized on numerous occasions, the approval of the
biotech product is independent of the approval of the use of chemical herbicides.
33 The Belgian
scientific experts also recognized that the risks associated with herbicide use are assessed by the
relevant pesticide authorities under Directive 91/414/EEC .34 Risks arising from the use of the
herbicide should not be considered as legitimate reasons for denying the approval of a HT biotech
product. The two are not related given that the risks arising from herbicide use are influenced by
numerous variables independent of the crop itself (application method, dosage, timing, frequency of
application etc.). Conflating the two provides a conven ient pretext for disguising the fact that the EC
is imposing a dramatically higher level of scrutiny and level of protection for herbicide use associated
with biotech products than for herbicide use generall y. This is yet a further example of, what Dr.
Squire describes as the EC's "inconsistency" in terms of scrutiny of agricultural practices.

31 Expertise Report of the Group of Experts Mandated by the Biosafety Advisory Council, Exhibit
EC-63 – attachment 167, p.18, Section 3.8.2 "Residue Assessment".
32 Canada Third Written Submission, para. 246, footnote 208, Exhibits CDA-152 and 160.
33 Canada Third Written Submission, para. 240 and footnote 199.
34 Exhibit EC-63 – attachment 166, p. 18.

73. In terms of the question regarding the impact of the herbicide on the composition of food and
feed, Canada notes that the "food" derived from oilseed rape is oil. The oil has been notified for food
use in the EC since 1999 as being substantially equivalent to conventional oilseed rape.
35 Had there
been compositional changes in the oil as a result of the use of glufosinate-ammonium on the crop,
presumably the oil could not have been notified as substa ntially equivalent. Alternatively, if this is a
genuine risk the EC overlooked back in 1999 that has only now come to light, one would expect the
EC to take some action to suspend the marketing of the oil. Tellingly, the EC has not because it has
no scientific basis to do so.

74. In fact, the impact of the herbicide on the composition of the food and feed derived from
oilseed rape tolerant to glufosinate-ammonium has been extensively reviewed by the EC's own
scientific committees. The SCP reviewing Ms8xRf3 in May 1998 assessed the safety of the gene
products, herbicide residues and metabolites.
36 The SCP specifically referred to the SCP opinion on
oilseed rape Topas 19/2 in relation to the assessment of herbicide residues and the metabolites
resulting from the interaction of the herbicide with the plant. There are two metabolites – one major
metabolite (3-methylphosphinico-propionic acid (MPP)) and one minor metabolite (N-acetyl-
glufosinate).37 In the latter opinion, the SCP stated the following:

6.2.2. Safety of Gene Products/Metabolites (Food and Feed Aspects):
Safety of gene products: PAT protein is ubiquitous in nature but represents only
0.005% of protein in finished canola meal. It is heat and acid labile and the enzyme
activity is always destroyed in toasted canola meal.
Additional in vitro tests demonstrated the in activity of PAT and npt II in gastric juice
of farm animals and it is hypothesised that it does not survive ingestion. In vivo tests
performed on broiler chickens fed canol a in their diets confirmed the safety
established in rats with purified protein.
Data concerning the chemical analysis de monstrated substantial equivalence with
control seeds for major nutrients including protein, oil, amino acids, fatty acids,
tocopherols and sterols. The content of gl ucosinolates and erucic acid in glufosinate
tolerant rape was identical with that of control seeds. Sequence comparisons show
that PAT protein does not have homology to known allergens. Acute toxicity tests on
PAT protein in rats showed no negative effects.
These results lead the Committe e to conclude that there is no significant risk to
human and livestock following ingestion of the GM seeds.
Residue assessment: The metabolism of glufosinate am monium in transgenic plants,
carrying the pat gene, has been thoroughly studied . The gene enables the plant to
rapidly metabolise the herbicidal active mo iety into a non-toxic metabolite, N-acetyl-
L-glufosinate. The metabolism studies on ge netically modified canola (rape) showed

35 Canada First Written Submission, para. 78 and EC , Summaries of Article 5 notifications received by
the Commission for the years 1997 [1998] O.J. C. 200/ 16, 1998 [1999] O.J. C. 181/22, 1999 [2000] O.J. C.
71/2, 2000 [2001] O.J. C. 46/8, 2002 [2003] O.J. C. 33/6, and 2003 [2004] O.J. C. 58/9, product No. 10.
(Exhibit CDA-25).
36 EC, Scientific Committee on Plants, Opinion regarding the Glufosinate tolerant, hybrid rape derived
from genetically modified parental lines (MS8 x RF 3) notified by Plant Genetic Systems (Notification
C/B/96/01), submitted 19 May 1998, pp. 4-5. (Exhibit CDA-35-A)
37 Opinion of the Scientific Committee on Plants Regarding the Genetically Modified, Glufosinate-
Tolerant Rape Notified by Agrevo Company (C/UK/95/M5/1), (Exhibit CDA-63).

a rapid conversion of glufosinate to N-acetyl-glufosinate
. In the immature canola
plant the principal residue identified was N-acetyl-glufosinate followed by
glufosinate with lesser quantities of 3-me thylphosphinico-propionic acid (MPP). In
seeds and hulls MPP was the major metabolite and the N-acetyl-glufosinate a minor
metabolite.
Magnitude of residues in gluf osinate tolerant rape seed : Many trials were conducted
in various Canadian regions during 1992 a nd 1993 with different application rates. In
no case were residues of the metabolite MPP found at levels above the limit of
determination; residues of parent glufosinate were found only in one trial; N-acetyl-
glufosinate was found in samples of 5 trials up to 0.14 mg/kg. The residue behaviour
in tolerant oilseed rape processed fraction was also studied in a trial conducted in
Canada. No detectable residues were found in crude/refined/refined bleached/refined
bleached deodorised/oil. N-acetyl-glufosinate was found in soapstock at a
concentration of up to 0.1 mg/kg after application at an exaggerated rate only.
Magnitude of residues in food of animal origin: Ruminant and poultry feeding studies
were conducted to determine the magnitude of glufosinate-derived residues in the
tissues and milk of dairy cows and in the tissues and eggs of chicken hens which were
dosed for 28 consecutive days with a mixture of parent glufosinate and the metabolite
N-acetyl-glufosinate in a ratio which repr esents the terminal residues in relevant
animal feed (15% / 85%) at 3 dose levels. No detectable residues were found in meat,
milk or eggs at the dose calculated to re present the highest residues in livestock feed
under Good Agricultural Practice and taking into account the potential use of
glufosinate herbicide in several tolerant crops.
Conclusion on residue assessment: On the basis of the available data, a maximum of
0.2 mg/kg of residues of glufosinate ammonium and its metabolites, N-acetyl-
glufosinate and 3-methylphosphinico-propionic acid (expressed as glufosinate-free
acid equivalents) can be calculated for im ported seed of tolerant swede rape. In food
of animal origin derived from livestock an imals fed with feedstuffs after application
of glufosinate herbicide in tolerant rape , no residues above the limit of determination
can be expected. In Canada, the MRL for glufosin ate-derived residues in tolerant
canola is covered under the existing MRL of 3.0 mg/kg for canola from desiccation
use (information by the applicant). The US EPA uses a Reference Dose of 0.02
mg/kg b.w. in the human dietary risk assessment for glufosinate-derived residues in
commodities from non-transgenic plants as we ll as from transgenic plants (Federal
Register, Vol. 62, No. 24, p.5333, 1997).
6.2.3. Substantial Equivalence: Compositional analysis on seed harvested from trials
at a number of locations within Canada in several successive years provided data on
oil content, fatty acid composition (including erucic acid content) and glucosinolate
levels. Those for the seed from the genetically modified plants fall within the range
for non-GM control varieties.
For food purposes the product is likely to be highly processed so that both the genetic
material introduced into the transgenic pl ant and its protein products would be absent
from the refined product.
On the basis of substantial equivalence, it can be concluded th at refined products
from plants derived from this glufosinate tolerant plant would be safe for food use.

75. Other EC scientific committees have also assess ed the impact of glufosinate- ammonium on
the composition of other types of food and feed (maize), finding no adverse effects.
38 Lastly, Canada
recalls the statement of the Belgian scientific e xperts of January 2004 in the assessment of Ms8xRf3
quoted above:

The risk assessment of the herbicide use and thus the toxicity of glufosinate
ammonium and metabolites were assessed by the Belgian Health Council within the
framework of the plant protection products Directive 91/414/EEC . End 2000 [ sic],
the Health Council gave a positive opinion for the use of glufosinate ammonium on
herbicide-tolerant plants. The final authorization of the Ministry is not yet granted.39
76. In the light of the comprehensive assessment of the impact of glufosinate-ammonium on the
composition of food and feed conducted by the EC's own regulatory authorities , for the EC to suggest
that this issue is only "now" coming to light and has yet to receive such a comprehensive assessment
is plainly disingenuous. More troubling is the failure by the EC to address, let alone refer the Panel
to, the detailed analysis directly relevant to this issue undertaken by its own scientists . The EC's
arguments in this regard are not only without scien tific justification but are patently misleading and
should be rejected.

189. At para. 254 of its supplementary rebuttal, Canada states that "[i]n the light of the
moratorium, it is reasonable to infer that the regulatory authorities were taking a decidedly go-
slow approach". The member State referred to in this statement is notably the Netherlands.
Did Canada submit evidence that the Netherlands supported the alleged moratorium at the time
it completed its initial assessment of GT73? If the Netherlands did not support the alleged
moratorium, why would the Netherlands take "forty-two months to conduct the initial
assessment, instead of the ninety days foreseen in the EC's approval procedures" if this was not
to resolve scientific or technical issues?

77. It is reasonable to infer from the surrounding circumstances, that The Netherlands, with the
knowledge that there was a moratorium in place and that the speed of its review would therefore have
little impact upon the eventual date of approval, in stead took the extended time to request information
from the notifier in an effort to upgrade the dossier to the anticipated new information requirements
(especially the detection method) of Directive 2001/18. Rather than being an active participant in the
moratorium, it is reasonable to conclude that The Neth erlands was placed in th e position of having to
accept it and to act or react, as the case may be. It would have been futile for The Netherlands to have
issued its favourable report and circulated the dossier to the Community level prior to the entry into
force of the Directive 2001/18 (October 2002) because the EC Member States, qua Regulatory
Committee, would, in the light of the moratorium, have simply stalled the application.

190. With reference to Greece's safeguard meas ure, Canada refers to this measure as an
"import ban" (Canada's first written submission, para. 114). Are import bans subject to
Article 2.1 of the TBT Agreement?

78. No. The language of Article 2.1 of the TBT Agreement , particularly the reference to
"products imported from the territory of any Member …", indicates that this provision is intended to

38 Opinion of the Scientific Committee on Plants on the Submission for placing on the market of
genetically modified insect resistant and glufosinate ammonium tolerant (Bt-11) maize for cultivation. (Exhibit
CDA-35-H).
39 Expertise Report of the Group of Experts Mandated by the Biosafety Advisory Council, Exhibit
EC-63 – attachment 167, p.18, Section 3.8.2 "Residue Assessment".

operate much like Article III:4 of the GATT 1994. Th at is, its disciplines apply to measures affecting
the product in question once it has entered into the territory of the Member whose measure is being
challenged.

79. This is why Canada, in its First Written S ubmission, does not make a claim that the Greek
import ban violates Article 2.1 of the TBT Agreement .
40 Notwithstanding the EC's argument in its
First Written Submission that "it is clear that the nature and aim of the Greek measures does not differ
from those of the other national measures",
41 the explicit wording of the measure itself establishes
incontrovertibly that the measure extends solely to a prohibition on the importation of the product in
question.42

42 Greece, Minister of the Environment, Regional Planning and Public Works, Prohibition on the
importation of seeds of a genetically modified rape line bearing the reference number C/UK/95/M5/1 ,
Government Gazette, 1008, 25 September 1998, pp. 11941-11942 (English translation and Greek original).
(Exhibit CDA-72)

ANNEX F-6

COMMENTS BY CANADA ON THE REPLIES OF OTHER PARTIES
TO QUESTIONS POSED BY THE PANEL IN THE CONTEXT OF
THE SECOND SUBSTANTIVE MEETING
18 MARCH 2005

TABLE OF CASES

Short Form Full Case Title and Citation
Australia – Salmon Australia – Measures Affecting the Importation of Salmon , Report of the
Appellate Body, WT/DS18/AB/R, adopted 6 November 1998.
EC – Asbestos European Communities - Measures Affecting the Prohibition of Asbestos and
Asbestos-Containing Products, Report of the Appellate Body,
WT/DS135/AB/R, adopted 5 April 2001.
Japan – Alcohol II Japan – Taxes on Alcoholic Beverages , Report of the Appellate Body,
WT/DS8/AB/R; WT/DS810/AB/R; WT/DS11/AB/R, adopted 1 November
1996.
Korea – Beef Korea – Measures Affecting Imports of Fresh, Chilled, and Frozen Beef ,
Report of the Appellate Body, WT/D S161/AB/R, WT/DS169/AB/R, adopted
10 January 2001.
US – FSC (Article 21.5 – EC) United States – Tax Treatment for "Foreign Sales Corporations" – Recourse
to Article 21.5 of the DSU by the European Communities , Report of the
Appellate Body, WT/DS108/AB/RW, adopted 29 January 2002.
US – Section 337 United States – Section 337 of the Tariff Act of 1930 , Report of the Panel,
BISD 36S/345, adopted 7 November 1989.

Question 119:

1. The EC's assertion that ISPM No. 11 (2004) is not relevant to the SPS Agreement is without
merit.

2. First, its arguments on timing are both factually misleading and legally wrong. ISPM No. 11
was endorsed by the Interim Commission on Phytosan itary Measures (ICPM) in April 2001. In April
2003, the ICPM endorsed a supplement to ISPM No. 11 on the analysis of environmental risks
 and
agreed that it should be integrated into ISPM No. 11. These resulted in ISPM No. 11 Rev. 1 (Pest risk
analysis for quarantine pests including analysis of environmental risks ). In April 2004, the ICPM
endorsed a further supplement to ISPM No. 11 Rev. 1 on pest risk analysis for living modified
organisms (LMO) and agreed that this should be integrated into ISPM No. 11 Rev. 1. These
supplements are annotated in ISPM No. 11 (2004) with "S1" and "S2" respectively.1

3. The references to environmental risks in Anne x 1 of ISPM No. 11 (2004) were incorporated
as a result of the April 2003 supplement. Thus, any attempt by the EC to dismiss references to
environmental risks on the basis that these were adopted after the establishment of the Panel is wrong.
The suggestion that environmental risks, include d by virtue of the April 2003 supplement, are
somehow related to the Cartagena Protocol is also wrong. It is the April 2004 supplement, not the
April 2003 supplement, which deals with LMOs.

1 "Endorsement", ISPM No. 11 (2004), p. 1 (Exhibit EC-130).

4. Second, the suggestion that the April 2004 supplement is not relevant to the SPS Agreement
merely because it deals with similar subject matter to the Cartagena Protocol , is a recasting of the
EC's equally unmeritorious earlier argument that GMOs should be dealt with "outside" the WTO
Agreement because they have thei r own "special agreement", the Cartagena Protocol.
2 By its own
terms, the April 2004 supplement concerns those LM Os that "may present a phytosanitary risk and
therefore warrant a PRA [pest risk analysis]." 3 The April 2004 supplement identifies the specific
types of risks to plant life that may arise from LMOs that may constitute "pests".

5. Third, the EC's arguments with respect to the legal relevance of ISPM No. 11, including the
April 2004 supplement are equally flawed. The compla inants are not arguing that the definitions in
ISPM No. 11 are legally dispositive of the interpretation of terms in the SPS Agreement. However,
given the fact that the SPS Agreement refers specifically to "inter national standards, guidelines and
recommendations developed under the auspices of the S ecretariat of the International Plant Protection
Convention", it is illogical and contra ry to the object and purpose of the SPS Agreement to dismiss
such standards, guidelines and recommendations simply on the basis that one party (the EC) does not
like what they say. As Canada has demonstrated , ISPM No. 11 (2004) may be considered by the
Panel as a supplementary means of interpretation for terms in the SPS Agreement.4

6. Fourth, Canada has addressed the EC's atte mpts to extract "environmental risks" from the SPS
Agreement in paragraphs 52 to 67 of Canada's Third Written Submission. Suffice to say, the SPS
Agreement was intended to discipline a specific sub-set of "environmental" measures, namely those
applied to protect animal (including wild fauna), pl ant (including wild flora) and human life or health
from risks arising from pests and diseases and those applied to prevent or limit other damage from
pests. To claim that these measures are not "e nvironmental" because the term is not used is
semantics. While it may be true that "measures for environmental protection, per se " are not
necessarily SPS measures ( e.g. pollution abatement, emissions control, trans-boundary movement of
hazardous wastes etc.), it cannot be credibly argued that measures to protect certain components of the
environment (plants and animals, defined broadly) from the entry, establishment and spread of pests
and diseases are not
 SPS measures. ISPM No. 11 (2004) elaborates on the types of risks to plant,
animal and human life or health and other dama ge intended to fall within the scope of the SPS
Agreement. The fact that such risks are also refe rred to as environmental risks, because reasonable
people would view them as such, does not magically transform them into non-SPS risks.

7. Finally, the EC's efforts to conjure up an interpretive rationale based on the negotiating
history of the SPS Agreement is flawed because the materials to which the EC refers do not indicate
whether the WTO Members intended for all types of environmental measures to be excluded; indeed,
the more plausible reading of those materials is that the WTO Members intended for more general
types of environmental measures, such as those relating to air an d water quality, waste management,
and the like, to be excluded from the coverage of the SPS Agreement, but that environmental effects
related to SPS-type risks would remain within the scope of that agreement.

Question 120:

8. In relation to paragraphs 13 to 16 of the EC's Answers to Panel Questions (7 March 2005),
while economic damage resulting from the presence of pests that affects the quality of plant products
(fruits and vegetables) may fall within the scope of "other damage" in Annex A(1)(d), this type of
damage does not exhaust the type of damage c ontemplated under Annex A(1)(d). The EC has
presented no principled basis for limiting "other damage" to these situations.

2 Canada Second Written Submission, paras. 96-104.
3 Ibid, p. 35.
4 Canada Answers to Panel Questions (7 March 2005), para. 4.

9. In relation to the EC's ill-founded argum ents relating to "environmental risks" in
paragraphs 19 and 20, Canada refers the Panel to Canada's commen ts with respect to Question 119 at
paragraph 6.

Question 121:

10. Canada may have misunders tood the Panel's Question as referring only to relevant risk
assessment techniques relating expressly to products of biotechnology. If the Panel's Question relates
to generally applicable relevant risk assessment t echniques, Canada agrees with the response of the
United States to this Question.

11. In relation to paragraph 39 of the EC's An swers to Panel Questions (7 March 2005), Canada
has already indicated that it does not agree with the EC that the Cartagena Protocol is a "relevant risk
assessment technique" developed by a "relevant international organization".
 5 Neither the Cartagena
Protocol itself, nor the Convention on Biological Diversity can be said to be "international
organizations". Furthermore, given the fact that the Cartagena Protocol is a treaty that has not been
ratified by any of the complainants, it is not legally relevant to this case.6

Question 122:

12. Canada does not agree with the EC's charact erization of the relationship between the conduct
of a risk assessment and a WTO Member's chosen le vel of protection. In responding to the Panel's
question, the EC has confused two distinct and separate issues: the level of protection and the
presence of a potential risk.

13. In particular, the EC's first reason does no t support its argument, and the illustrative example
set out in paragraph 48 of the EC's Answers to Pa nel Questions (7 March 2005) actually demonstrates
how the EC misperceives the two issues. In its ex ample, the EC confuses the absence of a risk from
the Mediterranean fruit fly with the concept of a low level of protection. In reality, the absence of risk
may affect the scope of the risk assessment, but this is not dependent on the level of protection, as
such. It arises from a determination that the fruit fly does not pose a risk because in a cold climate
there is no risk of establishment and spread.

14. The EC's second "reason" for why the level of protection purportedly can affect the conduct
of the risk assessment can only be read as a veile d attack on what the EC has suggested is the
complainants' lower level of protection. In reality , the EC is once again confusing the scope of the
risk assessment, which relates to the presence of a potential risk, and the chosen level of protection. It
is illogical to suppose, as the EC seems to do, th at a responsible government will simply ignore
potential risks just because its level of protection may be lower than that of another country.
Regardless of the level of protection, the risk manager will want complete information about all
potential risks, in order to make as informed a decisi on as is possible in the ci rcumstances, even if the
risk management measure ultimately chosen reflects a comparatively high tolerance for risk.

15. The EC's third "reason" betrays a failure on th e part of the EC to understand the distinction
drawn by the Appellate Body between "scientific un certainty" and "insufficient scientific evidence".
Risk assessment is defined in the SPS Agreement , not with reference to the appropriate level of
protection, but with reference to an "evaluation of the likelihood of entry, establishment or spread of a
pest or disease…according to the sanitary or phyto santiary measures which might be applied" or an

5 Canada Answers to Panel Questions (7 March 2005), Question 121, para. 13.
6 Canada Second Written Submission, paras. 96 to 104.

"evaluation of the potential for adverse effects on human or animal health". In the hypothetical
scenario created by the EC these criteria are not respected. We are not given sufficient details to
determine what factors influence the conclusion of th e risk assessment with respect to the 5% to 20%
variance. Nor are we given any indication as to what risk management measures beyond a simple
approval might be available to address the apparent scientific uncertainty faced by both country A and
country B. In effect, the EC's scenario is a straw man, intended, not so much to respond to the Panel's
question, but to advance the EC's ag enda with respect to its contenti on that the scientific evidence in
this dispute, despite the evidence of the scientific experts, is uncertain, incomplete, quickly changing
and, of course, very complex.

16. The reality, of course, is that the EC's hy pothetical scenario bears no relation to reality.
Scientific risk assessments – as mandated and pr escribed via detailed requirements – have been
performed for all the products in issue. In no case can the EC demonstrate that the risk managers
were or are faced with the kind of "dilemma" concoc ted by the EC in paragraph 53 of its answer to
Panel Question 122.

Question 128:

17. In relation to paragraph 56 of the EC's An swers to Panel Questions (7 March 2005), Canada
agrees with the EC that the "words ‘arising from' indicate a degree of causality" between the product
or organism in question and the risk to animal, plan t and human life or health. However, the EC is
interpreting "arising from" in an overly restric tive manner by limiting the degree of causality to
immediate and direct effects. As Canada explained in its answer to Panel Question 187,
 7 the EC
cannot have it both ways; it cannot, on the one hand, claim that certain risks are legitimate reasons for
stalling the applications of biotech products, while, on the other, claim that these same risks do not
"arise from" the biotech product in question. As ide from being inconsistent and illogical, the EC's
unduly restrictive interpretative approach to "ari sing from" finds no support in the text of the SPS
Agreement, in the light of its context and object and purpose.

18. In paragraph 57 of the EC's Answers to Panel Questions (7 March 2005), the EC treats
"biogeochemical cycles" in a vacuum as if they are important in and of themselves. Its equation "if A
[GMO] injures B [biogeochemical cycles], A is a "pest" vis à vis B" is fundamentally flawed. A

would not be a "pest" simply because A adversely affects biogeochemical cycles. Biogeochemical
cycles cannot be in and of themselves adversely affected. An effect on biogeochemical cycles may
cause adverse effects on plant or animal life or health. In such a case, the B in the EC's equation is
plant or animal life or health, not biogeochemical cycles. It does not make sense scientifically to
claim that biogeochemical cycles have been adversely affected if plant or animal life or health has not
been adversely affected.

19. In any event, as Canada indicated in para graph 73 of its Third Written Submission, the EC
has failed to point to a single instance where a biotech product in question materially affects a relevant
biogeochemical cycle. Hypothetical concerns that bear no relationship to the actual risks posed by
biotech products in question cannot serve to tran sform an SPS measure into a non-SPS measure. The
EC is simply inventing ex post ad hoc excuses to maintain its moratorium.

Question 129:

20. Canada has three comments in relation to the EC's answer to Panel Question 129. First, the
EC's response that the Regulatory Committee proce dure could not have been used to establish
harmonized risk assessment objectives and methodology is patently at odds with statements in the

7 Canada Answers to Panel Questions (11 March 2005), Question 187, para. 63.

very report relied on by the EC in these proceed ings to explain the alleged inadequacies of Directive
90/220 ("1996 Report").
8 In the 1996 Report, the Commission stated:

At the same time, while undergoing th e procedure for adopting an amended
Directive, which will involve a co-decisi on of the Council and the Parliament, the
Commission is committed to making full use of all the tools and flexibility of the
current Directive. More specifically, the Commission will intensify the work of the
Risk Assessment Group established in th e framework of the Committee of the
Competent Authorities, so that a common approach to risk assessment objectives and
methodology can be adopted as guidance in March 1997;9
21. Tellingly, the EC fails to address directly these statements in the 1996 Report (which were
quoted in paragraph 61 of Canada's Second Writte n Submission) when responding to the Panel's
question. The EC is taking a selective approach to the facts in order to suit its present purposes.

22. Second, the intent of Directive 90/220 clearly was to allow for such harmonization beyond the
formalistic approach the EC now choos es to describe. The preamble to the Directive states, in part, as
follows:

Whereas disparity between the rules which are in effect or in preparation in the
Member States concerning the deliberate rel ease into the environment of GMOs may
create unequal conditions of competition or barriers to trade in products containing
such organisms, thus affecting the func tioning of the common market; whereas it is
therefore necessary to approximate the laws of the Member States in this respect;…
Whereas it is necessary to establish harmonized procedures and criteria
 for the case-
by-case evaluation of the potential risks ar ising from the deliberate release of GMOs
into the environment;…
Whereas a Committee should be set up to assist the Commission on matters relating
to the implementation of this Directive and to its adaptation to technical progress.
23. It seems odd indeed that the Directive woul d refer specifically to the necessity to establish
harmonized procedures and criteria and not empower the Regulatory Committee to adopt the same.

24. Third, the EC's argument that the Regulatory Committee procedure was "limited to
‘adaptation' of Annex II and III" is unconvincing. Annex II and III of Directive 90/220 set out the
information that must be contained in the notification. In addition, the notifier was required to include
in the notification "an assessment of any risks for human health and the environment related to the
GMOs or a combination of GMOs."
10 Similarly, the new Annex II of Directive 2001/18 (Principles
for the Environmental Risk Assessment) refers to the information that must be included in the
environmental risk assessment submitted with the notification. 11 Under both Directives, the notifier
conducts the risk assessment and submits the resu lts of the risk assessment as a part of the
notification. Consequently, the EC has simply specified under Directive 2001/18 the type of
information relating to the environmental risk assess ment that is required now to be submitted in the

8 EC, Commission, Report on the Review of Directive 90/220/EEC , Com(96) 630 final
(Exhibit CDA-119). See Canada Second Written Submission, paras. 58-61.
9 Ibid, p. 11. [emphasis added]
10 Directive 90/220, Art. 11(1).
11 Directive 2001/18, Art. 13(2)(b).

notification. This is no different in effect from "adapting" the information requirements specified in
Annexes II and III of Directive 90/220.

Question 130:

25. The EC's response to Question 130 is without mer it. First, the EC is incorrect when it states
that the term "food safety" is not used in the SPS Agreement . In fact, the term is found in the
definition of an SPS measure in Annex A(1), when it states that "Sanitary and phytosantiary measures
include…packaging and labelling requireme nts directly related to food safety
" and in Annex A(3)(a),
when elaborating on international standards, guidelines and recommendations relevant to the SPS
Agreement: "for food safety, the standards, guidelines and recommendations established by the Codex
Alimentarius Commission." In the face of this explicit language, the EC's assertion that the WTO
Members excluded food safety from the scope of the SPS Agreement is plainly wrong. Furthermore,
it would be illogical to suppose, and therefore ca nnot be reasonably argued, that the WTO Members
included packaging and labelling requirements related to food safety, but not requirements relating to
food safety per se.

26. Having established that food safety indeed falls squarely within the scope of the SPS
Agreement, and that allergenicity is a central food safety concern, the conclusion that the term
"toxins" can comfortably be read as including alle rgenicity is a simple matter of logic and the
application of the rules of treaty interpretation. Even if the EC's convoluted argument about a
"continuum between food quality and food safety" is accurate in principle, its attempt to equate
concerns about nutritional composition – i.e. whether the consumer is getting enough vitamin C in his
or her diet – and allergenicity – i.e. whether the consumer will have an anaphylactic reaction to the
presence of peanuts, go into a coma and die – must be rejected as comparing "apples and pears".

27. Finally, the EC's suggestion that allergenicity can arise from sources other than food does not
vitiate the arguments that allergenicity is a food safety concern, that the SPS Agreement includes food
safety issues within its ambit, and th at the ordinary meaning of "toxins", when read in its context and
in the light of the object and purpose of the SPS Agreement , should be understood to include
allergens, at least in so far as they arise in food, beverages or feedstuffs.

28. As for the allergenicity issues raised by th e EC in paragraph 64 of its Answers to Panel
Questions (7 March 2005), the EC has failed to presen t any evidence that such concerns were raised
by either the EC Member States or any of the ma ny scientific committees that actually examined the
biotech products in issue in this dispute. It seems to Canada that this is yet another of the many
hypothetical scenarios conjured up by the EC in an attempt to evade its responsibilities under the SPS
Agreement.

Question 131:

29. It is questionable whether the EC's suggesti on that the term "condition" is limited only to
those conditions of use and handlin g defined by the applicant is correct. However, assuming, for the
sake of the argument, that the EC could only im pose conditions proposed by the applicant, nothing
prevented the EC (the Commission or the Compet ent Authorities of the Member States) from
requesting applicants to amend their applications to contain such conditions. Indeed, this occurred in
relation to maize MON 810. The notifier, at the request of the Commission, undertook to develop an
insect resistance management strategy. This undert aking was subsequently noted in the approval
decision, Commission Decision 98/294/EC.
12

12 Canada Second Written Submission, para. 55 and Exhibit CDA-81).

Question 132:

30. The EC's assertion in paragraph 72 of its An swers to Panel Questions (7 March 2005) that the
Panel experts suggested that "risk assessment of fo od uses and feed uses are notably different" is not
correct. To the contrary, for the products in issue in this dispute, Dr. Nutti stated that if the results of
the food safety assessment confirm the safety of the f ood, these results would be directly relevant to
feed safety. In response to a question from the Pane l, Dr. Nutti further clarified that she is not aware
of any case, for the products at issue in this disput e, where a food that is safe for human consumption
was not also determined to be safe for animals. The long line of EC scientific opinions under
Directives 90/220 and 2001/18 that have reviewed food and feed safety support this conclusion.
13

Question 136:

31. Canada disagrees with the EC's contention that "one cannot, in the context of Article 5.5 of
the SPS Agreement, meaningfully compare the actions of the European Communities with those of the
Member States, given the different ALOPs". The EC is fully responsible under the WTO Agreement
for the actions of EC Member States. If individua l Member States apply levels of protection that
differ from each other, or from the level of pr otection sought by Community-wide laws, and the
situations in which these ALOPs are applied ar e comparable, the possibility of a violation of
Article 5.5 arises. The EC is in violation of its obligations if the application of different ALOPs,
whether by the EC as a whole or by its individual Member States, is arbitrary or unjustifiable and
results in discrimination or a disguised restriction on international trade.

32. Furthermore, despite the EC's semantic effo rts, Article 5.5 does not draw any distinction,
whether explicit or implicit, between "provision al" and "definitive" measures, or "provisional
approvals" and "unconditional defin itive approvals", whatever the EC might have in mind in coining
these terms.

33. In any event, the EC's response is entirely ab stract; no attempt is made to link the "reasoning"
set out by the EC to the facts in this case, or any of the EC Member State national measures. This is
consistent with the EC's approach throughout this dispute; as Canada has noted elsewhere,
14 the EC
has yet to put forward a cogent argument that links ALOPs, facts, measures and law together with
respect to the EC Member State national measures.

Question 137:

34. Once again, the EC engages in a semantic exercise while failing to address the facts.
Regardless of whether scientific evidence is changing – and the EC has not demonstrated that relevant
scientific evidence was changing in a manner that stood to affect the original multiple risk assessment
conducted in relation to the EC Member State na tional measures – a WTO Member remains obligated
to ensure that the application of different AL OPs does not amount to arbitrary or unjustifiable

13 See for example Exhibit CDA-35-A, pp. 4 to 5 ("Because virtually no protein is present in the oil
extracted from the plants, the risk for human consumption are non-existent. The amounts of PAT present in
seed meal fed to animals would be too low to cause even theoretical concern."). Also, see Exhibit CDA-63, pp.
5 to 6 ("These results lead the Committee to conclude that there is no significant risk to human and livestock
following ingestion of the GM seeds…In food of animal origin derived from livestock animals fed with
feedstuffs after the application of glufosinate herbic ide in tolerant rape, no residues above the limit of
determination can be expected…Compositional analysis on seed harvested from trials at a number of locations
within Canada in several successive years provided data on oil content, fatty acid composition and glucosinolate
levels. Those for the seed from the genetically modified plants fall within the range for non-GM control
varieties.")

distinctions in comparable situations, where such distinctions give rise to discrimination or a
disguised restriction on international trade.

35. In implying that Canada is arguing that an ALOP, once established, is frozen in time, the EC
is misleading the Panel as to the real issues in this dispute. The fact remains that the EC Member
States are applying different ALOPs to comparable s ituations. Canada has already demonstrated this
with reference to actual facts and measures.
15 The distinctions being made in this respect are arbitrary
and unjustifiable, and they give rise to discrimination or a disguised restriction on international trade.

36. Furthermore, the EC's argument that "every product is different, and every product needs to
be considered on its own merits", is absurd. It is both factually inaccurate and would, if heeded,
render Article 5.5 meaningless as no comparison would ever be possible. It is also completely
contrary to the jurisprudence established by the Appellate Body in Australia – Salmon.
16

Question 139:

37. In paragraphs 86 to 88 of the EC's Answ ers to Panel Questions (7 March 2005), the EC
suggests that the Commission would not have known of EC Member State concerns prior to the
submission of the draft measure to the Regulatory Committee, and that submitting the draft measure
was the only way to gauge those concerns. This is pa tently false. EC Member States' concerns were
typically raised once the Competent Authority's favourable assessment had been circulated at the
Community-level. In order to evaluate the leg itimacy of these concerns, the Commission typically
would seek the advice of the relevant Community-level scientific committee. Only after the scientific
committee rendered its favourable opinion would the Commission submit draft measures to the
Regulatory Committee. To suggest, as the EC does, th at prior to the submission of the draft measure
a full airing of the Member State concerns had not taken place is again playing fast and loose with the
facts. In all relevant cases, the Commission failed to call for a formal vote as it was apparent to the
Commission that the qualified majority necessary to support the measure could not be mustered
because of the moratorium.

38. In short, the EC's suggestion that only by submitting draft measures to the Regulatory
Committee could the Commission find out whether th e Member States had outstanding concerns is
patently inconsistent with the facts and contradict s the EC's own statements that "…in the Regulatory
Committees the Commission and the Member States discu ss the applications at length, e.g. present
questions and answers" found in paragraph 88 of its Answers to Panel Questions (7 March 2005).

Question 141:

39. In addition to what follows, Canada refers th e Panel to paragraphs 152 to 159 and 249 to 252
of Canada's First Written Submission, which establish that the moratorium is an SPS measure and that
it is subject to Article 7 and Annex B of the SPS Agreement.

40. The EC's response to this question miss es the point of Canada's argument. The moratorium is
"applicable generally" in that it suspends all final decision-making under the EC's approval procedure.
This is not a question of an "administrative decisi on in a specific case" but of the procedure not being
allowed to function as designed. It is not, as the EC asserts, a measure that is "adopted at the end of a
specific administrative procedure", nor does it represent "the outcome of a specific approval
procedure in relation to a specific product". It is the adoption (more about this word later) of a
measure of general application that affects all products subject to the procedure. The moratorium is

15 Canada First Written Submission, paras. 412-42.
16 Report of the Appellate Body, paras. 139-178.

therefore a "sanitary [or] phytosanitary regulation[]" and the EC's failure to publish it promptly is a
violation of Article 7 and Annex B(1).

41. In regard to paragraphs 94 to 97 of the EC's Answers to Panel Questions (7 March 2005),
Canada simply observes that, notwithstanding the EC 's somewhat intemperate attack on the wording
of the Panel's question, it cannot disguise or detract from the essential facts that Canada has already
established. A moratorium was not only "adopted", it has had the effect of halting approvals of
biotech products since October 1998. Whether the measure was adopted de facto or de jure is really
beside the point, just as it is beside the point wh at EC law requires in the way of recording such
measures. The EC cites Orwell in its efforts to evade this obvious point.
17 It might better have
invoked Kafka as the inspiration for its strategy of surreal obfuscation in this case.

Question 142:

42. Although Canada has little difficulty, in principle, with the EC's depiction of the distinction
between principles and evidence, the digression in paragraph 99 of the EC's answer to Panel
Question 142 misrepresents both the facts and the legal position of Canada.

43. Contrary to the EC's assertions, the evidence h as revealed that, in the case of the EC Member
State national measures – the only measures for which the EC has invoked Article 5.7 – the scientific
evidence was more than sufficient to complete a ri sk assessment, and that the alleged concerns noted
by the EC in paragraph 99 were not a relevant fact or. To imply, as the EC does, that there was little
or no scientific evidence, and that scientific principles were irrelevant, is to distort utterly the factual
situation in relation to these products.

44. Furthermore, the EC's suggestion that pot ential risks to biogeochemical cycles were an
overriding concern in the EC is simply a flight of fa ncy. There is in fact no evidence to suggest that
any of the biotech products in question affect biogeochemical cycles in a manner that adversely
affects plant or animal life or health.
18 Finally, even if such evidence existed, the risk could only arise
in the case of products approved for cultivation. This is only a frac tion of the product applications
currently suspended in the EC's approvals process.

Question 144:

45. The EC avoids answering the Panel's Question by discussing products that have been notified
under the simplified procedure of Article 5 under Regulation 258/97 (e.g. GT-73). This misses the
point entirely and is yet a further attempt by the EC to avoid addressing the pertinent issues in this
dispute by focussing on issues that are at best margina lly relevant. Furthermore, the EC is incorrect
to characterize these products as having been "approv ed" under the Community legislation. The EC
knows full well that these products were assessed only at the individual EC Member State level, that
an opinion was rendered as to whether they met the cr iteria for substantial equivalence, and that this
fact was notified to the other EC Member States through the European Commission.

Question 152:

46. The EC's answer to Panel Question 152 act ually confirms Canada's assertion that the
Rapporteur had merely re-requested information that it had previously received from the applicant.
Specifically, the EC admits that the "blots from the three reports" had already been transmitted to the

17 EC Answers to Panel Questions (7 March 2005), para. 97.
18 See Canada Answers to Panel Questions (7 March 2005), Question 148, paras. 68-70. Also see
Canada's answer to Panel Question 128, above.

lead CA. Moreover, the EC admits that the working document submitted by the notifier on 17 May
2000 "contained information submitted over the past two years
".19 Indeed, the working document was
"taking into account all the supplemental informa tion submitted to the Dutch Competent Authority in
the last two years" 20 and consolidating that information for th e convenience of the Dutch authorities.
In the light of the prolonged delays caused by the moratorium, one can hardly expect a notifier to
simply sit on its hands and do nothing.

Question 154:

47. The EC's response to this question indicates that it cannot justify delays resulting from the
"need" for new legislation. Whether or not the EC's traceability and labelling legislation, per se ,
conforms to the EC's WTO obligations has yet to be determined and is not an issue in this case. The
fact that the complainants have not challenged the EC's traceability and labe lling legislation (which
Canada notes only entered into force in April 200 4, well after the Panel was established) or co-
existence legislation (which has not even been propo sed) is irrelevant and does not imply that delays
caused by the imposition of a moratorium pending the adoption of such legislation are justified under
Annex C(1)(a) of the SPS Agreement.

Question 158:

48. Canada refers the Panel to paragraphs 189 to 193 of Canada's Second Written Submission,
where it demonstrates why the refusal of France to issue the letters of consent for oilseed rape
Ms1xRf1 and Ms1xRf2 gives rise to a violation of the EC's obligations under the SPS Agreement.

49. The obvious answer to this question is that neither product has been marketed in the EC
because neither product received final approval fro m the sponsoring EC Member State. Under
Directive 90/220, a product could not be marketed unless it had received the written consent from the
sponsoring Member State. Article 11(5) of Directive 90/220 specified that "the notifier may proceed
with the release only when he has received the written consent of the competent authority in
accordance with Article 13…". Article 13(4) states, in turn, that "…the competent authority shall give
consent in writing to the notification so that the pr oduct may be placed on the market …". 21 In other
words, the issuance of the written consent by the sponsoring Member State competent authority was a
legal condition precedent to the product being marketed.

50. The proposition that Articles 11(5) and 13(4) of Directive 90/220 have a legal effect is further
supported by the fact that the European Commission issued reasoned opinions to France in relation to
its refusal to issue the letters of consent – a necessary precursor under EC law to the Commission
bringing legal action against a Member State that has breached its legal obligations – in 1999.
22 If the
provision in the EC legislation requiring the sponsor ing Member State to issue a letter of consent had
no legal effect, there would be no need nor indeed a basis for the issuance of reasoned opinions by the
European Commission.

Question 159:

51. Canada has no comment other than to observe that it is curious that the EC seems better
informed about the status of the transgenic varieties in other jurisdictions than in its own.

19 EC Answers to Panel Questions (7 March 2005), para. 106 and 107.
20 Exhibit EC-70 – attachment 21.
21 Emphasis added.
22 Exhibit CDA-52.

Question 160:

52. Canada appreciates the EC's effort to clarify th e legal status of Italy's Decree banning the use
of maize MON809, MON810, T25 and Bt11. Howeve r, Exhibit EC-166 is, in Canada's view, less
than satisfactory as confirmation of that legal status.

53. If, in fact, the Decree has been repealed, as the letter in Exhibit EC-166 indicates, the EC
should provide the Panel with a copy of the Italian legislative instrument repealing it. If the ruling by
the Regional Administrative Court of Lazio had the effect of rendering the Decree null and void,
independently of any action by the Italian government , a translated copy of the court ruling should be
submitted to the Panel and the parties, and, if necessa ry, an explanation of how Italian law operates in
this respect, including confirmation that the ruli ng has not been, and will not be, appealed by the
Italian government.

Question 161:

54. Canada notes that the EC response to Questi on 161 is incomplete. The EC states that the
EFSA evaluation of Ms8xRf3 began as of 10 January 2005. Alt hough EFSA received the
Commission's request for an evaluation on 11 January 2005, the request is still marked "registration
not yet completed."
23 Consequently, the EFSA evaluation has not yet started. Not surprisingly, the
EC fails to provide any explanation as to the reason for the delay or offer any explanation for why it
took six months after receiving the last of the Member States' objections for the Commission to
request EFSA to review the dossier.
24

Question 162:

55. Canada notes that, even at this late stag e of the proceedings, the EC remains unable –
independently of the EC Member State national measures – to articulate the specific level of
protection being applied by its respective Member States. Furthermore, Canada disagrees with the
EC's vague assertion that it is clear from the measures that they "seek to secure a high level of
protection". If anything is clear from the meas ures – which amount to complete bans on these
products – it is that they aim for an acceptable level of risk that is tantamount to zero.

Question 163:

56. Canada has maintained since the outset of these proceedings that the EC has violated
Article 5.5 of the SPS Agreement by adopting different appropriate levels of protection in different
situations, namely in respect of pending biotech applications subject to the moratorium and novel
non-biotech products (such as herbicide-tolera nt crops developed through mutagenesis).
25 However,
the source of the difference in the appropriate level of protection is not the existence of an approval
regime for biotech products, per se , but the fact that the EC, by adopting and maintaining a
moratorium, has effectively prevented the approval proce dure from functioning. In the light of the
evidence of the experts concerning the comparability of the risks of these two groups of products, the
EC's superficial attempt at avoiding this issue by s uggesting that it is outside the terms of reference of
this Panel is truly a last desperate attempt to address a losing argument.

23 EFSA, Register of Requested Opinions, EFSA-Q-2005-005,
http://www.efsa.eu.int/register/qr_dateofreceipt_12_en.html.
24 According to the EC Chronology for Ms8xRf3, the last comment received by a Member State was
received from Italy on June 22, 2004.
25 Canada First Written Submission, paras. 209-210.

Question 164:

57. The EC responds to Question 164 by claiming that the legal principle that legal acts need to
be reasoned does not apply to the Regulatory Comm ittee because it is an auxiliary body "that is
merely involved in preparing such an act". The argument appears to be that because no final decision
or "acts that have (external) legal effect" have been adopted, the obligation to explain why the
institution disregarded the opinion of the scientific committee does not crystallize. This argument
parallels the EC's argument that it has not violated Article 5.1 of the SPS Agreement because the risk
assessment process has yet to be completed. In other words, so long as the EC can prolong the
approval process (even indefinitely ) without taking a final decision, the EC should be able to
circumvent its legal obligations. At least with re spect to the EC's WTO obligations, this position is
without merit.

58. Canada notes that, in responding to this questi on, the EC attempts to downplay the role of the
Regulatory Committee. The EC relies on a formalistic distinction between the EC Member State and
Commission representatives sitting qua Regulatory Committee, and the Regulatory Committee itself
in suggesting that regulatory committees do not themselves have any power to seek further
information. This is little more than semantics. Whether a request for additional information comes
from a Member State, the Commission or the formal entity referred to as the Regulatory Committee is
immaterial for the purposes of this dispute. The unmistakeable fact is that the Regulatory Committee
stage of the process, whether one refers to this as the Community-level stage or the first step in the
Comitology procedure, has been used by the EC Member States and the Commission to effectively
stall the approval procedure.

59. Second, the EC's characterization of the role of the Regulatory Committee is at odds with its
previous description of its regulatory bodies. For instance, earlier in its Answers to Panel Questions
(7 March 2005), the EC states that the "authorization for the product under question is scrutinized by
the Regulatory Committee "26 and refers to the fact that th e Regulatory Committee "had not only a
regulatory but also an advisory role." 27 Similarly, in earlier submissions, the EC has repeatedly
characterized the activity of the regulatory co mmittees as related to the consideration of risk
management measures. By way of example, the EC refers to the fact that "risk management decisions
are left to regulatory bodies" 28 and states that "[i]n the risk analysis process, it is up to the risk
management level (the Commission and the Member States together) to take appropriately into
account all the independent risk assessment information and opinions." 29 It is clear that the EC is
referring to the activity that takes place at the Community level, under the guise of the relevant
Regulatory Committee. It is equally clear that bloc kage of biotech applications, as a result of the
moratorium, has been most pronounced at the Regulatory Committee stage of the process.

60. Whether or not the EC community institutions are able to circumvent legal obligations under
the EC's internal law by merely claiming that th e process has yet to be completed has no impact on
the EC WTO obligations: the requirement to base its SPS measures on a risk assessment by virtue of
Article 5.1 of the SPS Agreement and to undertake and complete its approval procedures without
undue delay pursuant to Annex C. The EC cannot ci rcumvent these obligations by claiming that its
regulatory bodies (e.g. Regulatory Committees) were still in the process of considering supposed risk
management measures.
30

26 EC Answers to Panel Questions (7 March 2005), para. 83.
27 Ibid, para. 86.
28 EC Answers to Panel Questions (16 June 2004), para. 12.
29 EC Answers to Panel Questions (16 June 2004), Question 86, para. 240.
30 Canada Third Written Submission, paras. 26-37.

Question 171:

61. Canada has already refuted the EC's arguments set out in paragraphs 57 and 58 of the EC's
answer to Panel Question 171. Canada would simply refer the Panel to paragraphs 103 to 112 of its
answer to Panel Question 50(a), paragraphs 230 to 256 of its Second Written Submission, and
paragraphs 79 to108 of its Third Written Submission, which demonstrate that: Article 5.7 constitutes
an exemption from the requirement in Article 2.2 not to maintain an SPS measure without sufficient
scientific evidence; the burden is on the EC, as the party invoking Article 5.7, to demonstrate its
applicability for each of the EC Member State natio nal measures; and the EC has not discharged this
burden.

Question 172:

62. Canada disagrees with the EC's contention that a bifurcation can be established between
Article 8 and Annex C on the one hand, and the rest of the SPS Agreement on the other hand, on the
basis of whether the SPS measure in question is bei ng "applied" or "developed". If this bifurcation
was intended by the WTO Members, they would not have used the term "applied" in Article 2.2.

63. Furthermore, the text of Article 8 does not st op after "the operation of control, inspection and
approval procedures". It goes on to extend the oblig ation to "procedures…for establishing tolerances
for contaminants in foods, bevera ges or feedstuffs" and to require WTO Members to "otherwise
ensure that their procedures are not inconsistent w ith the provisions of this Agreement." Procedures
for establishing tolerances for contaminants must be distinguished from procedures to ensure such
tolerances are not exceeded. The former would be a normative measure of general application while
the latter is the application (or operation) of a control, inspection or approval procedure, yet no
distinction is drawn between them for the purposes of either Article 8 or Annex C.

64. In any event, Canada has already explaine d why the particular facts in this dispute go
considerably beyond the scenario envisaged in th e Panel's question of short delays in making a
decision,
31 and has demonstrated how the EC's moratorium is inconsistent with both Articles 2, 5, 8
and Annex C(1)(a) of the SPS Agreement.32

Question 173:

65. The EC misrepresents Canada's position in paragraph 64 of the EC's response to
Question 173. Canada refers th e Panel to paragraphs 18 to 23 of Canada's Answers to Panel
Questions (11 March 2005), and pa ragraph 94 of its Answers to Pa nel Questions (16 June 2004) for
an accurate rendition of Canada's position. In those paragraphs, Ca nada makes it clear that delaying
the approval of specific products is only justifiabl e where a valid risk assessment has revealed the
existence of risks for which the existing legislation does not provide risk management measures.

66. In this regard, the EC suggests that because the complainants have not challenged the EC's
new legislation, "it must be accepted as is fo r the purposes of assessing what may be ‘undue'".
33 This
is entirely beside the point. The issue is not whether the new legislation is in itself consistent with the
WTO rules, but whether the EC was justified in suspending its approva ls procedure pending the
adoption of that legislation.

31 Canada Answers to Panel Questions (11 March 2005), paras. 13-17.
32 Canada First Written Submission, Part VI.A and Part VII.A.
33 EC Answers to Panel Questions (11 March 2005), para. 69.

Question 177:

67. The EC's assertions regarding the issue of whether biotech products and their conventional
counterparts are "like products", and whether the EC measures accord less favourable treatment to
imported biotech products, do not reflect the jurisprudence on these points.

68. In particular, the EC suggests that because th ere is different general legislation for biotech
products and their conventional counterparts, they cannot be considered like products. The EC also
points to the Cartagena Protocol as evidence that biotech products and their conventional
counterparts are not like products. However, neither criterion is relevant, much less dispositive, of
whether biotech products and their conventional counterparts are like products or not.

69. The EC also argues that the Appellate Body has not said that "the competitive relationship in
the market place" is the sole criterion for determin ing likeness, and that one Member of the Appellate
Body in the asbestos dispute was of the view th at a "purely economic assessment of likeness is not
always appropriate".
34 However, these remarks have to be weighed against the underlying purpose of
Article III of GATT (and, theref ore, also Article 2.1 of the TBT Agreement ), which is "to avoid
protectionism in the application of internal … regulatory measures …". 35

70. The test for whether two products are "like" under Article III:4 has been set out in the
jurisprudence.36 Based on that jurisprudence, Canada has demonstrated in its earlier submissions why
specific biotech products and their conventional coun terparts are like products in the relevant sense. 37
The EC has not presented any arguments or evidence, as regards the Appellate Body-mandated test
for likeness, to counter Canada's prima facie case in this regard.

71. Turning to the specific issue raised by the Panel in its question – l ess favourable treatment –
the EC's arguments and assertions are without merit.

72. The departure point for a determination of whether an imported like product has been
accorded less favourable treatment is, as has been not ed repeatedly in the ju risprudence, the question
of whether the imported and domestically-p roduced goods enjoy "equality of competitive
conditions".
38 In Korea – Beef, the Appellate Body elaborated on this point, stating that:

A formal difference in treatment between imported and like domestic products is thus
neither necessary, nor sufficient, to show a violation of Article III:4. Whether or not
imported products are treated "less favourably" than like domestic products should be
assessed instead by examining whether a measure modifies the conditions of
competition in the relevant market to the detriment of imported products.39
73. Canada does not question th e Appellate Body's statement that WTO Members may draw
distinctions between products that have been fo und to be "like" without, for that reason alone,
according less favourable treatment to imported products as compared to their domestic counterparts.
However, this statement does not alter in any wa y the basic requirement that WTO Members must
offer equality of competitive conditions.

34 EC Answers to Panel Questions (11 March 2005), para. 101.
35 Japan – Alcohol II, Report of the Appellate Body, p. 16.
36 EC-Asbestos, Report of the Appellate Body, paras. 87-99.
37 Canada First Written Submission, paras. 304-20 and 451-65.
38 Japan – Alcohol II, Report of the Appellate Body, pp. 16-17.
39 Korea – Beef, Report of the Appellate Body, para. 137.

74. The EC also misunderstands the Appellate B ody's comments in paragraph 100 of its report in
EC – Asbestos . The Appellate Body's use of the word "group" did not signify that "like products"
could somehow be broken down into sub-categories. If a finding is made that a biotech product – for
example, a Bt maize variety – is "like" conven tional maize, then the WTO Member concerned is
required to provide equality of competitive opportuni ties to the Bt maize and the conventional maize,
respectively. Thus, the EC's suggestion that the point of comparison must be between imported and
domestic biotech products is non-sensical.

75. The Appellate Body has also noted that:

The examination of whether a measure involves "less favourable treatment" of
imported products within the meaning of Article III:4…must be grounded in close
scrutiny of the "fundamental thrust and effect of the measure itself". This
examination cannot rest on simple assertion, but must be founded on a careful
analysis of the contested measure and of its implications in the marketplace. At the
same time, however, the examination need not be based on the actual effects of the
contested measure in the market place.
40
76. In this particular case, careful analysis of the contested measure reveals, both in the case of
the product-specific marketing bans and the EC Member State national measures, that the effect is to
prohibit entirely the biotech products in question from being sold and used in the marketplace. In
contrast, the conventional/non-transgenic products continue to enjoy unfettered access to the
marketplace. It is difficult to conceive of a situation where "equality of competitive conditions" has
been more completely eradicated. Canada is not re quired to demonstrate the "actual effects" of the
EC's measure.

77. Finally, Canada observes that, in US – Section 337 , the Panel stated that, where differential
treatment has been established, "it is incumb ent on the [WTO Member] applying differential
treatment to show that, in spite of such differe nces, the no less favourable treatment standard of
Article III:4 is met". 41 This suggests that the initial burden is on the complaining party to establish
differential treatment. Once differential treatment has been shown, the burden shifts to the responding
party to demonstrate that the differential treatment do es not result in less favourable treatment. In the
specific circumstances of this dispute, Canada h as indeed demonstrated differential treatment. In
contrast, the EC has not met its burden of demonstrating that the differential treatment has not resulted
in less favourable treatment. It has not because it cannot.

Question 198:

78. In paragraph 37 of Canada's Second Oral Stat ement, Canada was referri ng to concerns raised
by EC Member States such as the following raised by the Belgian Group of experts: "[o]ne can only
speculate on the effects in the long-term and on th e effects of a large-scale cultivation of the GM-
herbicide tolerant crops."
42 The experts appear to assume th at the cultivation of GM-herbicide
tolerant crops will result in "cleaner" fields, that is to say, fields with fewer weeds. Whether this is
true depends on the herbicide to which the plant is tolerant as well as, critically, the application of the
herbicide. Thus, the source of the alleged concerns about farmland biodiversity results from better
weed control associated with GMHT crops. Obviously, if the extent of GMHT cropping was limited
to a smaller scale, the putative impact on farmla nd biodiversity would be less pronounced. In any
event, the EC avoids the question of whether or not a smaller and progressive introduction of the

41 US – Section 337, para. 5.11.
42 Exhibit EC-63 – attachment 166, p. 14.

biotech crop is a feasible option and conspicuously avoids discussing the successful examples cited in
paragraph 37 of Canada's Second Oral Statement.

Question 199:

79. The EC's response to Question 199 reveals yet again just how "inconsistent", to use Dr.
Squire's term, the EC has been in addressing its concerns about "farmland biodiversity."

80. The EC's attempt in paragraph 110 to complicate the issue of farmland biodiversity in the
context of GMHT cropping is misplaced. The EC seek s to obscure the fact that, when stripped of its
jargon, the putative impact on farmland biodiversity fro m herbicide-tolerant crops is related to more
effective in-crop weed control.
43 Whatever other concerns the EC may have about the impact of
modern agriculture on farmland biodiversity ( e.g. agricultural intensification, crop specialization and
monoculture, increased drainage of wetlands, elimina tion of non-farming habitats etc.), these have
nothing to do with GMHT crops and cannot be used to colour this issue.

81. In paragraphs 111 and 112, the EC yet agai n seeks to uproot biotech crops from the broader
agricultural context. The EC offers no factual support for its assertion that limiting "the rate of use of
the herbicide, while achieving an acceptable level of efficacy, would in practice be as ineffective as a
voluntary measure. Indeed, such requirements would be extremely difficult to enforce or let alone
police." The EC completely fails to explain wh y conditions imposed on the use of herbicides in
conjunction with biotech HT crops would be any more difficult to enforce than conditions imposed on
the literally hundreds of other herbicide uses approved in the EC, including the use of herbicides with
non-biotech herbicide-tolerant crops developed through mutagenesis. For instance, in the UK, over
550 pesticide products are approved fo r use with oilseed rape alone.
44 Unsubstantiated assertions are
not sufficient to meet the EC's burden of proof in the face of the prima facie case that Canada has
established.

82. If protecting farmland biodiversity by requiring farmers to leave more in-crop weeds was in
fact a genuine policy objective (the EC's selective application of this concern to biotech HT crops, and
nothing else, suggests that it is not), the asserti on that measures adopted to achieve this objective
would be more difficult to enforce for herbicide us e in conjunction with biotech HT crops than with
any other herbicide use is groundless. Yet again, the EC advances unsupported assertions in an effort
to explain away glaring inconsistencies in the ma nner in which it treats biotech crops and all other
forms of agricultural practice.

83. Indeed, contrary to the EC assertion, requiri ng farmers to apply herbicides in a manner that
leaves more weeds in the field has been recognized as a plausible option by scientists involved in the
UK FSE:

If the environmental disbenefits of very clean fields are in future judged to be
unacceptable in Britain, then additional ma nagement practices, such as band spraying

(Dewar et al. 2003) or leaving unsprayed strips along field margins , could be used to

43 See, for example, Exhibit EC-38, p. 5 ("The researchers confirmed that the more weeds there are in a
field, the more insects there are."; "The researchers th ink that conventional beet and spring rape fields were
richer in wildlife than their GM counterparts becaus e the broad-spectrum herbicides were more effective on
weeds than the specific herbicides used on the conventional crops.")
44 See Pesticide Safety Directorate Database - Pes ticides Register Database (Crop:oilseed rape
(https://secure.pesticides.gov.uk/pestreg/ProdSearch.asp).

reduce the negative impacts of cleanliness. The possibilities for mitigation are
numerous, but are beyond the scope of this paper.45
84. The EC's arguments should be seen for what th ey are – a convenient pretext for continuing
the moratorium and product-specific marketing bans.

45 Heard, M.S., C. Hawes, G.T. Champion, et al., Weeds in fields with cont rasting conventional and
genetically modified herbicide-tolerant crops. I. Effects on abundance and diversity. Phil. Trans. R. Soc. Lond.
B (2003) 1819-1832, p. 1831. (Exhibit EC-63 – attachment 154). [emphasis added]