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

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

Report of the Panel

I. INTRODUCTION
A. REQUEST FOR CONSULTATIONS AND REQUEST FOR THE ESTABLISHMENT OF A PANEL
1.1 On 8 November 2004, the European Communitie s requested consultations with Canada
pursuant to Article XXII:1 of the General Agre ement on Tariffs and Trade 1994 ("GATT 1994") and
Article 4 of the Understanding on Rules and Pro cedures Governing the Settlement of Disputes
("DSU") regarding the Canada's continued suspen sion of concessions and other obligations under the
covered agreements, after the European Comm unities' adoption of Directive 2003/74/EC on
22 September 2003 amending Council Directive 96/22/ EC concerning the prohibition on the use in
stockfarming of certain substances having a hormonal or thyrostatic action and of beta-agonists. The
European Communities has notified this Directive to the DSB and stated that it has fully implemented
the recommendations and rulings of the DSB in the dispute European Communities – Measures
Concerning Meat and Meat Products (Hormones) (EC – Hormones). The consultation request was
circulated in document dated 10 Nove mber 2004. The consultations were held on
16 December 2004 but the parties failed to reach a mutually satisfactory resolution of the dispute.
1.2 On 14 January 2005, the European Communiti es requested the establishment of a Panel
pursuant to Articles 4.7 and 6 of the DSU, as well as Article XXIII of the GATT 1994.1
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL
1.3 At its meeting on 17 February 2005, the DSB established a Panel pursu ant to the request of
the European Communities in document WT/DS321 /6, in accordance with Article 6 of the DSU
(WT/DSB/M/183), with standard terms of reference as below:
"To examine, in the light of the relevant provisions of the covered agreements cited
by the European Communities in document WT/DS321/6, the matter referred to the
DSB by the European Communiti es in that document, and to make such findings as
will assist the DSB in making the recommendations or in giving the rulings provided
for in those agreements."2
1.4 On 27 May 2005, the European Communities requested the Director-General to determine the
composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. On 6 June 2005, the
Director-General accordingly composed the Panel as follows:
 Chairman: Mr. Tae-yul Cho

 Members: Mr. William Ehlers
 Ms. Claudia Orozco

1.5 Australia, Brazil, China, India, Mexico, Ne w Zealand, Norway, Chinese Taipei and the
United States have reserved their rights to participate in the Panel proceedings as a third party.
C. P
ANEL PROCEEDINGS
1.6 At the joint request of the parties, and on 1 August 2005, the Panel decided that its meetings
at which the parties were invited to appear, w ould be open for observation by the public through
closed-circuit broadcast, provided satisfactory logi stical arrangements could be maintained by the
Secretariat. The Panel, however, after consulting the third parties, also decided that the session with

1 WT/DS321/6.
2 WT/DS321/7.

the third parties would remain closed. 3 The Panel notified the DSB Chairman of this decision on the
same day.4 The Panel held its first joint substantive m eeting with the parties to this dispute and the
parties to the dispute on United States – Continued Suspension of Obligations in the EC – Hormones
Dispute (WT/DS320) on 12-15 September 2005. The me eting with the parties was open for public
observation through closed-circuit broadcast. It also met with the third parties in a closed special
session on 14 September 2005.
1.7 The Panel in this dispute also decided to seek advice from scientific and technical experts
after consultation with parties on 20 October 2005. 5 After consulting the parties, it finalized its
Working Procedures for Consultations with Scien tific and/or Technical Experts on 25 November
2005.6 It selected six scientific and technical experts in consultation with the parties, sought their
advice as well as advice from the Codex Alimenta rius Commission (Codex), the Joint FAO/WHO
Expert Committee on Food Additives (JECFA), and the International Agency for Research on Cancer
(IARC) on scientific and technical questions in writi ng. The Panel also met with the six experts and
four representatives from Codex, JECFA and IARC in the presence of the parties to this dispute and
the parties to the dispute on United States – Continued Suspension of Obligations (WT/DS320)
dispute on 27-28 September 2006. The expert from IARC served both as an individual expert to the
Panel and as the representative of the IARC during the meeting. The Panel held its joint second
substantive meeting with the parties on 2-3 October 2006. These meetings were also open for public
observation through a closed-circuit broadcast.
1.8 On 31 July 2007, the Panel issued its interim report to the parties. On 28 September and
19 October 2007, the Panel received comments from the pa rties on the interim report. Neither of the
parties requested an interim review meeting. On 21 December 2007, the Pane l issued its final report
to the parties.
II. FACTUAL ASPECTS
A. H
ISTORY OF THE DISPUTE
2.1 On 13 February 1998, the DSB adopted the Panel and Appellate Body reports in EC –
Hormones. In doing so, the DSB recommended that the European Communities bring the measures at
issue into conformity with WTO rules. The Arbitrator appointed pursuant to Article 21.3(c) of the
DSU determined that the European Communities should have a "reasonable period of time" until
13 May 1999 to comply with the recommendations. On 26 July 1999, Canada obtained from the DSB
the authorization to suspend obligations up to the level of 11.3 million Canadian Dollars per year.
The arbitrators acting pursuant to Article 22.6 of the DSU had previously determined this level to be
equivalent to the level of nullifica tion or impairment (Article 22.4 of the DSU) suffered by Canada at
the time of its recourse to arbitration in May 199 9. On 1 August 1999 and pursuant to the DSB's
authorization, Canada introduced import duties in excess of bound rates to imports from the European
Communities by imposing a 100% ad valorem rate of duty on a list of articles that are the products of
certain EC Member States.7

3 See Annex A-1, Letter to the Parties dated 1 August 2005 on the Panel Decision on Open Hearings
for Public Observation. Annex A-2, Working Procedures for the Panel.
4 WT/DS321/8.
5 Annex A-3, Letter to the Parties dated 20 October 2005 on the Panel Decision on Consulting
Scientific and Technical Experts.
6 Annex A-4, Letter to the Parties dated 25 November 2005 on the Panel Decision on Certain Issues
concerning the Experts' Working Procedures; Annex A-5, Working Procedures for Consultations with
Scientific and/or Technical Experts.
7 The measures were adopted as the "European Union Surtax Order", P.C. 1999-1323, 28 July 1999,
published in Canada Gazette Part II, Vol. 133, No. 17, SOR/99-317.

2.2 The original measures in the EC – Hormones (Canada) dispute were provided in
Directive 96/22/EC, which prohibited the administer ing to farm animals of substances having a
thyrostatic action or substances having an oestrogenic, androgenic, or gestagenic action as well as the
placing on market of meat from such animals. 8 On 22 September 2003, the European Communities
adopted Directive 2003/74/EC of the European Pa rliament and of the Council amending Council
Directive 96/22/EC concerning the prohibition on th e use in stockfarming of certain substances
having a hormonal or thyrostatic action and of beta-agonists. The Directive was published and
entered into force on 14 October 2003. It provid es for a permanent prohibition on oestradiol-17 β and
a provisional prohibition on testosterone, progester one, trenbolone acetate, zeranol and melengestrol
acetate.
2.3 Prior to the adoption of the Directive 2003/74/EC, and in order to comply with the
recommendations and rulings of the DSB and the covered agreements, the European Communities
initiated and funded a number of specific scientif ic studies and research projects for the purpose of
conducting risk assessment(17 in total). The Scientific Committee on Veterinary Measures relating to
Public Health (SCVPH), an independent expe rts committee established under EC legislation,
reviewed the results of these studies and other publ icly available information as well as the data it
collected from various sources including CODEX/JECFA, and published its opinion entitled
"Assessment of Potential Risks to Human Health from Hormones Residues in Bovine meat and Meat
Products" ("the 1999 SCVPH Opinion") on 30 April 1999. The SCVPH subsequently reviewed this
Opinion on two occasions and adopted review re ports on 3 May 2000 (" the 2000 SCVPH Opinion")
and on 10 April 2002 (the 2002 SCVPH Opinion"). The SCVPH Opinions address six hormonal
substances: oestradiol-17β, testosterone, progesterone, trenbolone acetate, zeranol and melengestrol
acetate.9
2.4 In light of these Opinions, which the European Communities contends are risk assessments,
the European Communities prohibited the placing on the market of meat and meat products from
animals that have been treated with oestradiol-17β for growth promotion purposes on the grounds that
there was a substantial body of evidence showi ng that its residues are both carcinogenic and
genotoxic. With respect to testosterone, progest erone, trenbolone acetate, zeranol and melengestrol
acetate, the European Communiti es introduced the same measure on a provisional basis on the
grounds that the available pertinent scientific in formation reflected in the above-mentioned SCVPH
Opinions showed the existence of risks, but all th e information and data necessary to conduct a more
objective and complete risk assessment were insufficient or missing.10
2.5 On 27 October 2003, the European Communities notified to the DSB the adoption,
publication and entry into force of the Direc tive. In the same communi cation, the European
Communities explained that it considers itself to have fully implemented the recommendations and
rulings of the DSB in the EC – Hormones dispute and as a consequence, it considers the Canada's
suspension of concessions vis-à-vis the European Communities to be no longer justified.11
2.6 Canada disagreed in the DSB meeting held on 7 November 2003 that the new Directive was
based on science and stated that it would not remove the retaliatory measures vis-à-vis the European
Communities.12

8 WT/DS48/R/CAN, paras. 2.1-2.5.
9 See, Request for the Establishment of a Panel by the European Communities, WT/DS321/6.
10 Ibid. See also the EC's second written submission, para. 134.
11 European Communities – Measures Concerning Meat and Meat Products (Hormones) ,
Communication from the European Communities, WT/DS26/22, WT/DS48/20, 28 October 2003.
12 DSB, Minutes of Meeting held on 7 November 2003, WT/DSB/M/157, 18 December 2003, para.31;
See also the Request for the Establishment of a Panel by the European Communities, WT/DS321/6.

B. MEASURE AT ISSUE
2.7 The measure challenged by the European Comm unities is the suspension of concessions and
other obligations under the covered agreements, c ontinued without recourse to the procedures under
the DSU, after the European Communities' adoption of Directive 2003/74/EC on 22 September 2003
amending Council Directive 96/22/EC concerning th e prohibition on the use in stock-farming of
certain substances having a hormonal or thyrostatic action and of beta-agonists. The measure is
provided in Canada's European Union Surtax Order and is enforced as of 1 August 1999 . The EC's
Directive was published and entered into force on 14 October 2003. The EC stated in its notification
to the Dispute Settlement Body (DSB) that it has fully implemented the recommendations and rulings
of the DSB in the dispute European Communities – Measures Concerning Meat and Meat Products
(Hormones) (WT/DS48/AB/R ,WT/DS48/R/CAN).
13
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1 The European Communities requests the Panel to find that Canada's unilateral conduct:
(a) violates Article 23 of the DSU and, more specifically, Article 23.2(a), read in
conjunction with Article 21.5 and Article 23.1 of the DSU;
(b) violates Article 23.1 of the DSU read in conjunction with Articles 22.8 and 3.7 of the
DSU; and
(c) violates Articles I and II of the GATT 1994.14
3.2 In the alternative, should the Panel find no viol ation of Article 23 of the DSU, the European
Communities requests the Panel to find that Canada 's measure violates Article 22.8 of the DSU and
Articles I and II of the GATT 1994.15
3.3 Canada requests the Panel to reject the Europ ean Communities' claims and find that Canada
has not maintained its suspension of concessions with regard to the Eu ropean Communities in
contravention of Articles 3.7, 21.5, 23.1, 23.2(a) and 22.8 of the DSU, and Articles I and II of the
GATT 1994.16
IV. ARGUMENTS OF THE PARTIES
A. INTRODUCTION
4.1 The arguments of the parties are set out in their written submissions to the Panel and in their
oral statements made during Panel meetings, as well as in their written replies to questions from the
Panel. This Section presents a summary of the arguments of parties based on the executive
summaries prepared by the parties where such summaries were made available to the Panel.
B. P
ARTIES' REQUESTS AND ARGUMENTS ON OPENING THE PANEL MEETING FOR THE PUBLIC
OBSERVATION
4.2 At the Panel's organizational meeting with th e parties on 13 June 2005, the parties requested
that the Panel hold open meetings with the parties in this dispute. The Panel posed written questions

13 WT/DS321/6, WT/DS26/22, WT/DS48/20.
14 EC's first written submission, para. 150.
15 EC's first written submission, paras. 24 and 151.
16 Canada's first written submission, para. 133.

to the parties and the third parties regarding this joint request after its organizational meeting. The
parties answered these questions in writing on 20 June 2005 and on 7 July 2005.
1. Arguments of the European Communities
(a) Whether panels are permitted to open hearings under Article 12 (inc luding Appendix 3),
Articles 14.1 and 17.10 of the DSU
4.3 The European Communities argues that open hearings are permissible at the panel level. The
European Communities submits that Appendix 3, second paragraph, first sentence of the DSU
excludes public access to panel hearings, but this ru le is not obligatory, as Article 12.1 of the DSU
states: "Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise
after consulting the parties to the dispute." In the European Communities' view, it is therefore
permissible for a panel to adopt, under the procedur e of Article 12.1 of the DSU, working procedures
that foresee open hearings.
4.4 The European Communities also argues that this conclusion is not affected by Article 14.1 of
the DSU. The term "deliberations" under Article 14. 1 of the DSU designates the part of the panel's
work where it internally discusses the case, including the decision it intends to pronounce in its report
and the supporting reasoning. This is the ordinary m eaning of this term, in which it is also used in
other systems of adjudication, and the Fren ch ("délibérations") and Spanish versions
("deliberaciones") fully coincide with this meaning. These deliberations take place in the presence of
the Secretariat team working on the dispute, but w ithout the parties. The term "deliberations" does
not cover the meetings with the parties, for which di fferent terminology is used in Appendix 3 of the
DSU. The context supports this reading because ever ything that is addressed in the three paragraphs
of Article 14 of the DSU relates to the independe nt work which the panel conducts alone, in the
absence of the parties. Had the drafters of the DSU wanted to exclude open panel hearings, they
would have used a different language in Article 14.1 of the DSU. They would not have addressed this
question solely in the Appendix 3 working procedur es from which a panel may depart, as Article 12.1
expressly stipulates.
4.5 In the European Communities' view, this interpre tation is also corroborated by the use of the
term "proceedings" in Article 17.10 of the DSU which appears to be broader. Meaning must therefore
be given to the DSU negotiators' deliberate choice of the term "deliberations" in Article 14.1 of the
DSU.
4.6 The European Communities argues that such interpretation is the long-standing position of
several Members and has never been rejected by any WTO Member in any dispute. WTO Members
have repeatedly stated that the DSU rules on pane l procedures are flexible and allow the provision of
open hearings (Articles 14.1, 12.1, Appendix 3). Obviously, since a panel is obliged to consult the
parties before departing from the working proce dures suggested in Appendix 3, the parties' position
carries significant weight for the panel's decision. The EC considers that in the present case where all
the parties have agreed to open hearings, the Panel should accommodate the parties' request.
Article 18.2 of the DSU also provides context and s upports this position as it implies that parties are
entitled to "waive" the confidentiality of their positions.
(b) Legal implications of open hearings on covered persons under the Rules of Conduct
4.7 The European Communities considers that no lega l issues arise under the Rules of Conduct.
These Rules state in Section II, paragraph 1 that each covered person "shall respect the confidentiality
of proceedings" (see also Section VII, paragraph 1) , and also that "[t]hese Rules shall in no way
modify the rights and obligations of Members under the DSU nor the rules and procedures therein."
In the European Communities view, the Rules of Conduct are and remain fully binding on all covered

persons in this dispute, even if the hearings are opened to the public. Simultaneously, the Rules of
Conduct do not prevent the panel from fulfilling its task under the DSU and in accordance with the
procedural rules contained therein, which permit public hearings. The Rules of Conduct expressly
state that they do not modify these DSU rules.
4.8 The European Communities also considers th at Article 18.2 of the DSU again provides
context in that it shows that parties are entitled to "waive" the confidentiality of their positions. The
Panel's deliberations will in any event not be affe cted by the opening and remain confidential, as
required by Article 14.1 of the DSU.
(c) Systemic and political impact of opening hearings
4.9 The European Communities is of the view that there are no implications for WTO Members
who are not parties to this dispute, notably the parti es to another dispute remain able to adhere to their
preference, if any, not to open the hearings in th eir dispute. Opening a hearing for observers who will
remain completely passive during the session would not change anything about the intergovernmental
character of the WTO, nor would it impair the chances to reach a mutually agreed solution, as
preferred by the DSU (Article 3.7), if the parties jo intly request the hearings to be open, in line with
their general policy to apply transparency where the DSU rules allow (for in stance by making public
their submissions). Also, there are no implications for third parties and accordingly there is no need
to consult them before the Panel adopts its wo rking procedures because the parties have jointly
requested that the public be excluded from the thir d parties' session during the presentation by a third
party who prefers this. Thus, opening hearings to public observation will not affect third parties
beyond the extent to which they themselves agree. The DSU is clear in that the panel must consult
the parties, not the third parties, before adopting Working Procedures in departing from Appendix 3.
4.10 The European Communities also states that consulting the DSB and General Council Chairs
or the Director-General before opening the h earing for public observation does not seem necessary
because under the DSU the Panel has the power to ta ke decisions regarding its Working Procedures
and is required to fulfil its task in full independence. If all parties are in agreement on this question of
working procedures, the Panel should accommodate thei r request if the parties consider that this is
part of the best way to "secure a positive solution to the dispute", which is the aim of the dispute
settlement mechanism (Article 3.7 of the DSU).
(d) What procedures can be adopted to protect confidential information in an open hearing
4.11 The European Communities indicates that it does not expect that confidential information will
be submitted in this dispute. Should this neve rtheless happen, one could easily apply appropriate
means to close the portion of any meeting where confidential information is discussed.
4.12 The European Communities does not consider that there is any issue of confidentiality in
relation to information submitted by other Member s or non-Members (under Article 13 of the DSU),
unless the confidentiality requirement of the last sentence of Article 13.1 of the DSU applies, in which
case the corresponding portion of any meeting where this information is discussed could be closed.
4.13 With respect to the third party session, the Eu ropean Communities considers that each third
party should decide whether to open the part of th e third party session dealing with that third party's
statement.

2. Arguments of Canada
(a) Whether panels are permitted to open hearings under Article 12 (inc luding Appendix 3),
Articles 14.1 and 17.10 of the DSU
4.14 Canada argues that the DSU allows for open h earings of WTO panels. Article 14.1 of the
DSU states that panel "deliberations" shall be confid ential. The reference to "deliberations" indicates
that this paragraph applies to the internal deliberations of panels, not to the panels' meetings with the
parties. Furthermore, paragraph 2 of the Working Procedures in Appendix 3 of the DSU, which refers
to closed panel meetings, is subject to DSU Articl e 12.1, which specifically allows a panel to deviate
from the Working Procedures in Appe ndix 3 after consulting parties to the dispute. In cases such as
this one, where all parties to the dispute have agreed to open hearings, Canada is of the view that the
Panel should accommodate such a request. This position is consistent with the right of all parties to
waive confidentiality as expressed in Article 18.2 of the DSU, which states that a party is not
precluded from disclosing statements of its own positions to the public. In the present case, it is clear
that all parties have agreed beforehand to waiv e their right to confidentiality during the panel
hearings.
(b) Legal implications of open hearings on covered persons under the Rules of Conduct
4.15 Canada argues that the relevant provision in the Rules of Conduct is paragraph VII.1, which
provides: "[e]ach covered person shall at all times maintain the confidentiality of dispute settlement
deliberations and proceedings together with any info rmation identified by a party as confidential. No
covered person shall at any time use any inform ation acquired during such deliberations and
proceedings to gain personal advantage or advantage for others. "
4.16 This provision, in Canada's view, requires confidentiality on the part of members of a panel of
deliberations and proceedings. However, in accord ance with paragraph II:1 of the Rules of Conduct,
which expressly states that these Rules do not modify the rules and procedures under the DSU, this
provision is subject to a decision of the Panel to ho ld public hearings pursuant to Article 12.1 of the
DSU. Therefore, Canada considers that the obligation of covered persons to maintain the
confidentiality of a panel proceedings continues to a pply but is modified to the extent that the Panel
has decided to hold public hearings.
(c) Systemic and political impact of opening hearings
4.17 Canada considers that opening the panel mee tings to the public can only contribute to the
legitimacy, and perception of legitimacy, of the di spute settlement process. The desire of the
disputing parties to hold open hearings in this case does not have any broader systemic or political
implications – it merely serves the interests of the disputing parties in this case consistent with the
institutional framework of the WTO and with Article 12.1 of the DSU.
4.18 Canada submits that Article 12.1 of the DSU re quires that panels decisions on their working
procedures be taken in view of consultation with parties. This provision does not require consultation
with third parties. However, Canada recognizes th at third parties may have requested third party
status with the expectation of participating in cl osed proceedings. Therefore, Canada suggests that
after the Panel decides to hold public hearings it sh ould consult with third parties to (a) identify any
concerns of third parties regarding their particip ation in the proceedings, and (b) explore possible
steps to accommodate such concerns. Such accommodation measures may include turning off
cameras during the delivery of oral statements of thir d parties that do not wish to deliver such an oral
statement in a public hearing. Canada does not see a need for the Panel to consult with the Chairs of
the DSB, of the General Council or of the DSB Special Sessions, or with the Director General.

(d) What procedures can be adopted to protect confidential information in an open hearing
4.19 Canada believe that a provision should be a dded to the Working Procedures that would
provide a mechanism to protect business-confidentia l information that may become the subject of
discussion during the public hearings. Canada recommends a procedure under which a party may
request the Panel to suspend the public nature of the hearing for as long as such business-confidential
information was being discussed.
4.20 As to the third parties, Canada submits that they will have to follow the provisions in the
Working Procedures adopted by the Panel pursuant to DSU Article 12. Thus it is open to the Panel to
decide that the oral statements by third parties will take place in public meeting. However, it is also
within the Panel's discretion to leave it to the choi ce of individual third parties whether they wish to
make their oral statements in a private or public session. Canada prefers giving third parties such a
choice. Canada recommends the adoption of a pract ical procedural mechanism to suspend the public
nature of the hearing as necessary.
4.21 The treatment of written materials presente d by other WTO Members or by non-Members
falls outside the scope of issues raised by the possi ble public nature of the hearing. None of the
parties has proposed a modification to the Worki ng Procedures that would expand the categories of
participants in the hearing. Nevertheless, Ca nada recognizes that the written evidence provided by
other WTO Members or non-Members may have been provided in confidence. To the extent that
such confidential information is discussed during th e hearings, there will be need to add to the
Working Procedures a provision that would permit th e Panel to interrupt the public nature of the
hearing before a discussion of such confidential writte n materials takes place. In Canada's view, such
a procedure should be similar to that outlined above in respect of business-confidential information.
C. F
IRST WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES
1. Introduction
4.22 This case is about procedural obligations under the DSU of Members that continue to apply
the suspension of concessions or other obligatio ns after almost two years despite the proper
notification by the responding party that it has a dopted the necessary measures to implement the DSB
recommendations and rulings. In the alternativ e, the European Comm unities makes conditional
substantive claims under Article 22.8 of the DSU and Articles I:1 and II of the GATT 1994.
2. Factual aspects
4.23 Following an authorization by the DSB, Ca nada suspended tariff concessions and other
related obligations up to the le vel of Canadian $ 11.3 million. Subsequently, the European
Communities implemented the original DSB recommendations and rulings by Council
Directive 2003/74/EC. However, Canada continues to suspend concessions and related obligations
against certain products originating in the Europ ean Communities based on a unilateral determination
that the EC's implementation measure is insuffici ent to comply with the DSB recommendations and
rulings.
3. Legal arguments: Part I – Violation of Ar ticles 23, 21.5, 22.8 and 3.7 of the DSU and
Articles I and II of the GATT 1994
(a) The structure of Article 23 of the DSU
4.24 Article 23 of the DSU lays down the fundamental principle that the dispute settlement system
of the WTO is the exclusive means to redress any vi olation of any provision of the WTO Agreement.

Any attempt to seek "redress" can take place only in the institutional framework of the WTO and
pursuant to the rules and procedures of th e DSU. This has been confirmed in US – Section 301 Trade
Act and US – Certain EC Products.
4.25 Article 23.1 of the DSU contains a general obligation to follow the rules and procedures of
the DSU whereas Article 23.2 of the DSU lists a number of "specific and clearly-defined forms of
prohibited unilateral action." The relationship be tween the two paragraphs has two distinguishing
features. First, Article 23.2 of the DSU has to be re ad in the context of the first Paragraph ("in such
cases"), that is, it has to be established that the Member's action is performed with a view to
redressing a WTO violation. Second, the specific fo rms described in Paragr aph 2 do not exhaust the
list of prohibited unilateral action. There is a relationship of lex specialis and lex generalis which
implies, on the one hand, that whenever there is a violation of a specific case in Paragraph 2 of
Article 23, there always is also a violation of Paragraph 1 of that provision; and on the other hand, that
a particular conduct that may not come under the sp ecific cases listed in paragraph 2 of Article 23,
may still constitute a violation under paragraph 1 of that provision.
(b) Applicability of Article 23 – Article 23.1 of the DSU: Seeking the redress of a WTO
Violation
4.26 The meaning of "seeking the redress of a violation" under Article 23.1 of the DSU has been
extensively discussed by previous panels, i.e. US – Section 301 Trade Act and US – Certain EC
Products. The "violation" with regard to which redr ess is sought need not be one that has been
identified as such by the relevant WTO bodies. It suffices if it is perceived as being one by the
Member in question. The suspension of concessions or other obligations is a means of "redress."
Indeed it is the very means the WTO system envisa ges as a last resort remedy to WTO violations
according to Articles 3.7 and 22.1 of the DSU.
4.27 It is obvious that when it suspended con cessions in August 1999, Canada was seeking to
redress a (WTO-determined) violation. Back then , Canada reacted to the European Communities'
failure to implement, within the reasonable pe riod of time, the DSB recommendations in the EC –
Hormones case. It requested and obtained a DSB aut horization under Article 22.2 (respectively 22.7)
of the DSU, following which Canada decided on th e imposition of 100% additio nal duties. Canada's
way of proceeding back then is the very example of "seeking to redress a WTO violation" in line with
the rules and procedures of the DSU.
4.28 There can equally be no doubt that, if Canada is continuing the suspension of concessions to
this day despite the European Communities' adop tion of an implementation measure, it does so
because it still is seeking to redress a WTO violation. This can already be deduced from the fact that
the August 1999 measure of applying duties in exces s of bound rates is being continued without there
being any modification to it. Since that measure is motivated to be imposed as "a result of the EC's
failure to implement the recommendations and rulin gs of the WTO," and since Canada has neither
abolished nor changed the measure, nor modified its reason, Canada is obviously of the view that the
EC's failure to implement the recommendations and rulings of the WTO still persists. Indeed, the
continuation of the suspension of concessions is an unequivocal indication that Canada believes that
there continues to be a violation. Otherwise it would have ended the suspension of concessions in
accordance with its obligations under Article 22.8 of the DSU. Moreover, this is the explicit view
Canada has formally taken in the DSB and in various official statements.
(c) Violation of Articles 23.2(a) and 21.5 and of Article 23.1 of the DSU
4.29 Canada's conduct is contrary to the specifi c prohibition of unilateral conduct set out in
Article 23.2(a) of the DSU. Instead of seeking redress of the perceived continued failure of the
European Communities to implement the DSB's re commendations and rulings through the continued

suspension of concessions, Canada should ha ve introduced a compliance procedure under
Article 21.5 of the DSU. Because it has not done so, it has violated the specific prohibition of
unilateral conduct set out in Article 23.2(a) of the DSU. This violation of Article 23.2(a) and 21.5
constitutes at the same time a violation of Article 23.1 of the DSU.
4.30 As the Panel in US – Section 301 Trade Act has noted, the following conditions need to be
fulfilled in order to find a violation of Article 23.2( a) of the DSU. First, given the "chapeau" of
Article 23.2, it needs to be established that there is "such a case", namely that a Member is seeking to
redress a WTO violation. This is the case here.
4.31 Second, Article 23.2(a) of the DSU requires that a Member has made a "determination to the
effect that a WTO violation has occurred." The or dinary meaning of the term "determination," has
been noted by the Panels in US – Section 301 Trade Act and US – Certain EC Products. Such a
decision need not have a specific form, and can be inferred from action. The suspension of
concessions or other obligations is the very means (a lbeit of last resort) to react to a violation and
therefore necessarily implies a decision that ther e is a violation. That such a decision bears
consequences in WTO trade relations hardly requir es any explanation. The present case is similar to
the situation in US – Certain EC Products . Again, the action in question is the suspension of
concessions and related obligations. In contrast to the above case, nevertheless, the suspension here
had initially been authorized by the DSB based on a multilateral determination that there was a
violation. This multilateral dete rmination, however, was made with respect to the measures applied
by the European Communiti es at the time. Logically, it could not and did not apply to the measures
subsequently adopted and properly notified to the WTO by the European Comm unities. With regard
to the current legislative situation in the Eur opean Communities, no multila teral determination has
been made by the time at which this Panel was estab lished. If Canada nevertheless continues to apply
the suspension of concessions an d related obligations, it necessarily implies that it has unilaterally
determined that there continues to be a violation. It has, in addition, explicitly said so.
4.32 Third, Article 23.2(a) of the DSU is violated if the determination is not made in accordance
with the rules and procedures of the DSU, or is not consistent with the findings of a dispute settlement
organ. The DSU provides for a specific procedure, namely Article 21.5 of the DSU, to address the
situation that Members disagree over the existence or consistency of measures taken to comply with
the recommendations and rulings of the DSB.
4.33 There exists obviously a disagreement as to whether or not, by adopting
Directive 2003/74/EC, the European Communities has implemented the recommendations and rulings
from the DSB in the EC – Hormones case. Article 21.5 of the DSU requires that disagreement shall
be decided through recourse to dispute settlement . The European Commun ities has invited several
times Canada, but, to date, it refuses to initiate a co mpliance procedure under Article 21.5 (or, for that
matter, any other dispute settlement procedure under the DSU). Instead, it simply continues to apply
the suspension of concessions and related obligations as if no "measure to comply" had been taken or
the non-compliance of the new directive of the European Communities had already been established.
4.34 As the determination in th e present case has been made before the commencement, let alone
the exhaustion of the Article 21.5 pr ocedure, it is necessarily not one that has been made consistent
with the findings contained in an adopted panel or Appellate Body report.
(d) Canada's continued suspension of concessions a nd related obligations is in violation of
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU
4.35 Under Article 23.1 of the DSU, Canada is obliged to have recourse to, and abide by, the rules
and procedures of this Unde rstanding. This encompasses, inter alia , Articles 22.8 and 3.7 of the
DSU. In this respect, the following should be noted.

4.36 The suspension of concessions or other obliga tions is limited in time. This temporal
limitation is the very foundation of the retaliation system under the DSU. The importance of this
principle is already demonstrated by the fact that the "temporary nature" of countermeasures appears
contextually at two places in Article 22 of the DSU, in Paragraph 8 and in Paragraph 1. The temporal
limitation is a practical consequence of the fact that suspension of concessions should only be applied
as "a last resort", Article 3.7 of the DSU. This means that the suspension of concessions should only
apply where justified and necessary.
4.37 The temporary nature of the suspension of concessions or other obligations has been
recurrently interpreted by arbitrators to indicate that one of the main objects and purposes of sanctions
is to induce compliance by the violating WTO member with its obligations. In deed, in reaching this
conclusion the arbitrators followed a suggestion by Canada (see EC – Bananas III (US) (Article 22.6 –
EC)). The objective of inducing compliance enta ils, however, that once a Member has adopted
compliance measures which are not properly challe nged by the complaining Member, the suspension
of concessions or other obligations can not be app lied any longer. Indeed, in such a scenario the
suspension of concessions or other ob ligations would be deprived of one of its main objectives, i.e. to
achieve implementation of a DSB decision, for the simple reason that the WTO Member has already
taken measures to implement the DSB recommendati on. In this case, the objective to induce
compliance can only revive after it has been prope rly established that the implementing measure has
been insufficient to remedy a WTO violation.
4.38 Article 22.8 of the DSU prohibits the continue d unilateral application of the suspension of
concessions or other obligations when the measure which has been found inc onsistent is removed.
The term "removed" thereby refers to the complia nce by a WTO Member because this provision is
based on the respect of the WTO obligations by the Member concerned (see Article XVI:4 of the
WTO Agreement and Article 19.1 of the DSU). The scope of the compliance obligation is
determined by the DSB recommendations and ruling s following the adoption of the Panel and/or
Appellate Body report (Articles 21.5, 22.2 of the DSU).
4.39 Article 22.8 of the DSU does not specify how the removal of the WTO inconsistency is
determined. However, in the light of its context, i.e. Articles 21.5 and 23.2(a) of the DSU, and given
the exceptional nature of countermeasu res, i.e. their temporal limitati on, it is clear that a Member can
not unilaterally determine that the WTO inconsis tency persists despite the notification of a
compliance measure. In very much the same vein, a Member can not decide to continue to suspend
concessions or other obligations unilaterally. Th e WTO inconsistency of the implementing measure
can only be determined in accordance with the appr opriate procedure, namely Article 21.5 of the
DSU. Unless such a procedure concludes that th e compliance measure does not fully implement the
DSB recommendations and rulings, it cannot be presumed that this is the case.
4.40 This also follows from the general principle of good faith as it applies in international State
relations, under which States are normally considered to act in conformity with their obligations. This
principle has been widely confirmed in the international (trade) jurisprudence (see ICJ Corfu Channel,
EC – Hormones (Article 22.6), Chile – Alcoholic Beverages, Canada – Aircraft (Article 21.5 – Brazil)
and it also applies for implementing measures (
Canada – Dairy (Article 21.5 – New Zeal and and
US II), EC – Bed Linen (Article 21.5 –India)).
4.41 Therefore, it is clear that Canada could not unilaterally determine that the European
Communities implemented the DSB recommendations a nd rulings in a WTO inconsistent way. To
the contrary, the European Communities must be presumed to have complied with its WTO
obligations, if Canada refuses to establish the contrary.
4.42 Once the inconsistency of the measure has been removed, Article 22.8 of the DSU provides
that "the suspension of concessions or other obligations shall be te mporary and shall only be applied

until such time as the measure found to be inconsiste nt with a covered agreement has been removed."
This provision is mandatory. It does not leave an y margin of discretion to the retaliating Member,
thereby corroborating the exceptional nature of th e imposition of countermeasures. As explained
above, a Member which contests the removal of the in consistency of the measure has to abide by the
rules and procedures under the DSU, i.e. Article 21.5 of the DSU. Only if it is established in such a
procedure that the WTO inconsistency persists is th e application of the suspension of concessions or
other obligations permissible under Article 22.8 of the DSU.
4.43 Under the same logic, Article 22.8 of the DSU does not allow for the application of
countermeasures on the basis of a unilateral determination regarding th e WTO inconsistency of the
measure. Rather, Article 22.8 of the DSU, read in its context with Articles 21.5 and 23.2(a) of the
DSU, requires that in the absence of an adver se finding, the suspension of concessions or other
obligations shall not "be applied" any longer. This language is open in, at least, three directions:
4.44 Firstly, it indicates that the suspension of concessi ons or other obligations must be terminated
in case a compliance measure is not challenged, th e measure thus being accepted as being in full
accordance with the WTO agreements.
4.45 Secondly, Article 22.8 of the DSU shows th at the suspension of concessions or other
obligations must not be applied any longer if th e complaining Member delays, postpones or refuses
the initiation of an Article 21.5 proceeding. As a WTO Member is presumed to act in conformity
with its obligations, it follows necessarily that thro ugh the compliance measure it is presumed to have
removed the WTO inconsistency of the measure at least when the followi ng three conditions are
fulfilled: (1) the Member has followed its intern al decision-making procedures that are normally
applied for the purpose of adopting compliance measures of that kind; (2) the elaboration, deliberation
and adoption of the compliance measure is done in an open and transparent manner, and (3) the
compliance measure is notified properly to the WTO. Therefore, the suspension of concessions or
other obligations should not apply an y longer. This case is particularly relevant in the present dispute
where Canada has been refusing for almost two years to initiate the compliance procedure under
Article 21.5 and to cease the suspension of concessions and related obligations against the European
Communities. Thus, Canada continues the suspen sion of concessions and related obligations on the
basis of a unilateral determination regarding th e WTO-inconsistency of the notified compliance
measure.
4.46 In the light of the two first conclusions, it woul d also be appropriate to infer from Article 22.8
read together with Article 23.1 of the DSU that the suspension of concessions or other obligations
should not continue to be applied until the WTO inconsistency of the prope rly notified measure has
been positively determined by the DSB.
4.47 This result is also corroborated by the system and overall thrust of Article 23 of the DSU,
which is to strengthen the multilateral system. If a WTO Member were allowed to continue the
application of suspension of concessions without challenging the implementing measure, it would
necessarily have to base its assessment on a unilatera l determination of the WTO inconsistency of the
new measure. This would be in plain contradiction to Article 23.2(a), in conjunction with Article 21.5
of the DSU, as explained above.
4.48 The scenario described above follows the same ratio legis that applies for the initial
imposition of suspension of concessions or other oblig ations. Thus, whether a Member suspends for
the first time concessions or other obligations or wishes to maintain th e suspension despite an
implementation act does not make a difference. In both cases, a Member must not substitute
unilaterally its assessment of a WTO inconsistency of an implementation measure to the procedures
under the DSU.

4.49 In the case of the initial imposition of suspensi on of concessions or other obligations, the
DSU implies first a determination that the Me mber concerned has not implemented the DSB
recommendations and rulings. The DSB would not au thorize the suspension of concessions or other
obligations, if a WTO Member has taken implementing measures. It is established practice that the
Member which intends to suspend concessions or other obligations first obtains a DSB decision
regarding the insufficiency of the implementi ng measure following an Article 21.5 of the DSU
proceeding. This normal course of events and lega l steps in the case of the imposition of suspension
of concessions or other obligations is in full accordance with the overarching principle set out in
Article 23 of the DSU prohibiting Members from ma king unilateral determin ations that another
Member has violated its obligations.
4.50 Regarding the question of the conditions under wh ich the suspension of concessions or other
obligations could be maintained, there is no reason to assume that this fundamental logic should
change in any way whatsoever. In fact, the le gal situation is identical where the implementing
Member has taken the necessary measures to comply with its WTO obligations in accordance with its
internal rules and procedures and notified the measures in question to the WTO.
4.51 This comparability is even more striking if one focuses on the timing of an implementation
measure. In the case of the initial imposition of the suspension of concessions or other obligations, a
WTO Member has not implemented its obligations before the DSB's authorization to suspend
concessions or other obligations. In the case of the maintenance of suspension of concessions or other
obligations, a WTO Member implements its obligations after the DSB's authorization to suspend
concessions or other obligations. This difference in timing, however, does not alter the normal legal
sequencing between the multilateral review of th e compliance measure and the application of
suspension of concessions or other obligations. Indeed, the sole difference in timing does not give the
retaliating Member all of a sudden the substantive right to make unilateral decisions as to whether or
not the implementing measure is appropriate and suffici ent and, if it is not considered sufficient, to
continue applying the countermeasures as if nothing had happened.
4.52 In light of the above, there is an absolute need to refrain from continuing to apply the
suspension of concessions or other obligations in cases where the retaliating Member has not properly
challenged the compliance measure in an Article 21.5 proceeding. In fact, if a Member were allowed
to maintain the suspension of concessions or other ob ligations even in such a new legal situation, it
could make the kind of unilateral determinations which Article 23 specifically outlaws. Also, it could
continue to apply the suspension of concessions or other obligations even if the WTO violation has
been objectively removed. The implementing Member would then have to suffer from the suspension
of concessions or other obligations even though it has fully abided by its obligations. It goes without
saying that such a result would be in plain contradiction to the DSU provisions governing the
suspension of concessions or other obligations, in particular Articles 3.7 and 22.
4.53 These fundamental principles are not altered by th e fact that there exists a DSB authorization
under Article 22.7 of the DSU to suspend concessions or other obligations. The DSB authorization
cannot change the fundamental rul es under the DSU. Rather, the DSB implements these rules. Thus,
as the DSU provides that the susp ension of concessions or other ob ligations should not be applied
unless a WTO violation by a Member's measure has been properly established, the DSB authorization
cannot be interpreted to justify such a suspension if a WTO violation of a Member's (new) measures
has not been properly determined.
4.54 The basis for a DSB authorization to suspend concessions or other obligations is a prior
multilateral determination that the implementing WTO Member has failed to comply with its
obligations. This is the case if an Article 21.5 proceeding concludes that the implementing measure
was insufficient. This is also implicitly the case if a Member has not adopted any implementing
measure at all at the time of the DSB decision under Article 22.7 of the DSU. On the contrary, if a

WTO Member implements properly its obligations after the DSB has authorized the suspension of
concessions or other obligations the basis for this decision changes fundamentally. As the original
DSB authorization was taken in view of the origin al measure, it cannot logically encompass the new
implementing measure. Hence, the DSB authorizati on cannot cover the continued application of the
suspension of concessions or other obligations, if a WTO Member subsequently implements its
obligations in the absence of a multilateral review regarding the compliance (or not) of this new
measure.
4.55 Regarding this DSB authorization it is once again useful to compare the two situations of the
imposition and the maintenance of the suspension of concessions or other obligations. The DSB
could not authorize the imposition of retaliatory measures under Article 22.7 of the DSU, if the
implementing Member had undertaken measures to comp ly with its obligations and if those had not
been found WTO inconsistent following an Article 21. 5 proceeding. In the very same vein, the DSB
authorization cannot justify the maintenance of su spension of concessions or other obligations if a
Member properly complies with its obligations af ter the imposition of these measures and if its
compliance measure is not challenged in an Article 21.5 proceeding. Again, the mere temporal
difference of the new implementing measure does not mean that the DSB authorization, once
received, serves as a blank authorization for a Member to continue the application of the suspension
of concessions or other obligations indefinitely in the future and on the basis of unilateral
determinations.
4.56 Furthermore, the European Communities would note that, from a systemic point of view,
Article 22.8 of the DSU is subsequent to Article 22.7 of the DSU. This indicates that once the
situation under Paragraph 8 occurs it overtak es the authorization granted under Paragraph 7.
Paragraph 8 conditions Pa ragraph 7. As it must be assumed that the DSU negotiators followed a
logical sequencing in the way they drafted Article 22, it is clear that Article 22.8 of the DSU was
supposed to impact on the authorization under Article 22.7 of the DSU. Indeed, to assume that the
removal of the inconsistency of the measure under Paragraph 8 has no impact on the DSB
authorization under Paragraph 7 is not legally coherent or reasonable.
4.57 Moreover, this reading of the DSB authorization is corroborated if one takes a closer look at
the substance of this authorization. The level of nu llification or impairment has to be determined in
relation to the violation determined for the existing measure (Article 3.8 of the DSU). Thus, assuming
that a WTO Member has not undertaken any implementation steps, the level of nullification should be
determined in relation to the original violation. But assuming, in a second scenario, that a Member
has implemented partly or fully its WTO obligations , the level of nullification or impairment would
have to be determined accordingl y. Obviously, in the area where the Member implemented properly
its obligations there would be no nullification or im pairment. This logic had also been recognized by
the arbitrators in EC – Bananas III (US) (Article 22.6 – EC).
4.58 Applying the same reasoning in the present case, it is clear that the level of suspension of
concessions or other obligations as authorized by the DSB was based on a non-implementation by the
European Communities. However, this level and, therefore, the scope of the authorization may not be
justified any longer once the European Communities has properly implemented its obligations.
4.59 Finally, following the jurisprudence by the Appellate Body, once a Member violates
Article 23.1 read in conjunction with Article 22.8 of the DSU, it necessarily also acts contrary to
Article 3.7 of the DSU.

(e) Canada is in violation of Article I:1 of the GATT1994 because of the continued suspension of
concessions and related obligations
4.60 Canada is acting inconsistently with Articl e I:1 of the GATT 1994 by imposing import duties
in excess of bound rates on products originating in certain EC Member States.
(f) Canada is acting inconsistently with Article II of the GATT 1994 by the continued application
of countermeasures on products originating in the European Communities.
4.61 Canada is violating its obligations under Artic le II:1(a) and Article II:1(b) of the GATT by
suspending concessions and related obligations against the European Communities.
4. Legal arguments: Part II – Conditional clai m in the event that the Panel does not find
any violation of Article 23 of the DSU as set out in Part I
(a) Canada is violating Article 22.8 of the DSU b ecause the measure found to be inconsistent has
been removed by the European Communities
4.62 Canada is violating Article 22.8 of the DSU by continuing to suspend concessions and related
obligations even though the measure found to be inconsistent has been removed. Consequently,
Canada is under an obligation not to apply the suspension of concessions any longer. In the following,
the European Communities will set out in more deta il why the new measure is not only in presumed
compliance as argued above but in actual complian ce with the recommendations and rulings of the
DSB.
4.63 The rulings of both the Panel and the Appellate Body had essentially turned on the reading of
Article 5.1 of the SPS Agreement, and in particular, the requirement that a measure be based on a risk
assessment. The Appellate Body upheld the Panel's finding that the EC measures at issue were
inconsistent with the requirements of Article 5.1 of the SPS Agreement. At the same time, the report
contains an important clarification as to how th e European Communities could bring its regime for
hormones-treated meat in accordance with its oblig ations under the covered agreements. As seen
above in relation to Part I, the Appellate Body held "that Article 5.1, read in conjunction with
Article 2.2, requires that the results of the risk assessment must sufficiently warrant the SPS measure
at stake."
4.64 On the basis of the scientific data presented by the European Communities, the Appellate
Body found that that data did not sufficiently wa rrant or reasonably suppor t the import prohibition.
The Appellate Body found, in pa rticular, that the scientific reports and studies submitted by the
European Communities did not rationally support the EC import prohibition or were too general, i.e.
relevant but not sufficiently specific to the case. It is important to understand, therefore, that the
Appellate Body did not find that an import prohibition for beef from hormone treated cattle was per se
in violation of the SPS Agreement. Rather it found that the EC import prohibition was not sufficiently
warranted, that is to say reasonably supported, by the specific risk assessment relied upon at that time
by the European Communities.
4.65 In order to comply with the above findings the European Communities conducted a
comprehensive risk assessment. The risk assessment focussed on potential risks to human health from
hormone residues in bovine meat and meat products, in particular such risks arising from residues of
the six hormonal substances (oestradiol-17 β, testosterone, progesterone, trenbolone acetate, zeranol
and melengestrol acetate). In carrying out the ri sk assessment, the European Communities initiated
and during 1998-1999 funded altogether 17 specific scientific studies and research projects in order to
obtain as much as possible of the missing scientific information as identified in the above rulings.
Moreover, the European Communities addressed in 1998 specific requests for the submission of

scientific data to the United States, Canada, Australia and New Zealand which all authorize the use of
these six hormones for animal growth promotion. It also published an open call for documentation
requesting any interested party, including the indu stry, to provide any relevant and recent scientific
data and information in their possession to be taken into account in the complementary risk
assessment.
4.66 The data collected was submitted to the Scientific Committee on Veterinary Measures relating
to Public Health (SCVPH), an independent expert Committe e established under EC legislation to
evaluate this kind of substances on the EC legal sy stem. This scientific body was the one responsible
for scientific and technical questions concerning consumer health and food safety related to
production, processing and supply of food of animal origin. The SCVPH reviewed all the old and
new data and issued its opinion on 30 April 1999, wh ich it reviewed and confirmed again in 2000 and
once more in 2002 on the basis of additional and new information submitted subsequently.
4.67 Based on this comprehensive risk assess ment, the European Communities adopted
Directive 2003/74/EC. In accordance with the above scientific conclusions the Directive provides for
a definite import prohibition on meat and meat pr oducts from animals treated for growth promotion
purposes with oestradiol-17β. Furthermore, on the basis of the available but still incomplete data, the
Directive provides for a provisional ban on meat an d meat products from animals treated for growth
promotion purposes with testosterone, progesterone , trenbolone acetate, zeranol and melengestrol
acetate. The Directive provides for an obligation on the Commission to seek more complete scientific
information from any source which could shed light and clarify gaps in the present state of knowledge
on these substances.
4.68 Article 22.8 of the DSU obliges Canada to cease applying the suspension of concessions,
once an inconsistent measure has been removed. However, even though the inconsistent measure has
been removed, Canada continues to apply the susp ension of concessions. Canada, therefore, is in
violation of Article 22.8 of the DSU.
(b) Canada is in violation of Articles I a nd II of the GATT 1994 following the continued
application of suspension of Concessions
4.69 The illegal continued suspension of concessions an d related obligations automatically entails
a violation of Articles I and II of the GATT 1994. This has been explained above to which the
European Communities would refer to.
D. FIRST WRITTEN SUBMISSION OF CANADA
1. Introduction
4.70 This case involves three issues. First, it is about whether the DSB authorization permitting
Canada to suspend concessions with respect to the EC – in response to the EC's failure to comply
with the recommendations and rulings of the DSB in the EC – Hormones dispute – remains in effect.
Second, it is about whether the EC bears the burden of demonstrating that it has complied with those
recommendations and rulings in order to have the DS B authorization terminated. And third, it is
about whether the EC has actually complied with those recommendations and rulings. The first two
issues must be answered in the affirmative; the third issue must be answered in the negative.
2. Background to the dispute
4.71 The EC has had in place since the 1980s a ban on the importation of meat and meat products
derived from cattle treated with any of six growth-promoting hormones. In the EC – Hormones
dispute, the DSB ruled that EC legislation implementing the ban ( i.e. Directive 96/22/EC) was not

based on a risk assessment as required by the SPS Agreement. The DSB, in February 1998,
recommended that the EC bring its measure into compliance and was subsequently granted fifteen
months to do so. The EC failed to comply within that time and as a result the DSB, in July 1999,
authorized Canada to suspend concessions to the EC to the amount of Can$11.3 million. On the basis
of that authorization, Canada adopted the European Union Surtax Order , a measure which remains
unchanged and in force to this day.
4.72 After having been found non-compliant in the EC – Hormones dispute, the EC commissioned
a series of scientific studies and mandated th e SCVPH to review these studies along with other
available scientific evidence. The SCVPH produced three opinions, in which it concluded that a "risk
to the consumer has been identified with different levels of conclusive evidence for the 6 hormones in
question." The opinions concluded that oestradiol-17 β is a "complete carcinogen", that the current
state of knowledge does not allow a quantitative estimat e of the risk for the other five hormones, and
that no ADI could be established for any of the six hormones.
4.73 On the basis of the three SCVPH opinions, the EC adopted Directive 2003/74/EC in
September 2003. This Directive simply am ended Directive 96/22/EC by making the ban on
oestradiol-17β permanent, on the ground that it was now based on a risk assessment, and by making
the ban on the other five substan ces provisional, on the ground that there was insufficient information
to complete a proper risk assessment.
4.74 Upon notifying its amended Directive to the DSB, the EC stated that it considered itself in
compliance with the recommendations and rulings in the EC – Hormones dispute and, as a result,
Canada's suspension of concessions was no longer jus tified. Canada responded that it was for the EC
to obtain multilateral confirmation of its claim of compliance, and explained that Canada's continued
suspension of concessions was pursuan t to the original and continuing DSB authorization. Canada
further questioned how the EC's notification to the DSB of its unilateral assertion of compliance could
terminate Canada's multilateral authorization.
4.75 The EC did not initiate WTO compliance pro ceeding or otherwise seek confirmation from the
DSB of the compliance of its measure. Instead, it re quested the establishment of this Panel, alleging
that it was Canada's continued suspension of concessi ons that was inconsistent with Articles I and II
of GATT 1994 and Articles 23.1, 23.2(a) and (c), 3.7, 22.8 and 21.5 of the DSU.
3. Legal arguments
4.76 This dispute concerns the respective rights and obligations under the DSU of the EC and
Canada in the context of Canada 's adoption of WTO-authorized suspension of concessions to the EC.
This dispute also concerns the obligations of the EC under the SPS Agreement, in particular, whether
the EC has actually complied with the recomme ndations and rulings of the DSB in the EC –
Hormones disputes.
(a) Canada has not acted inconsistently with Articles 22.8 and 3.7 of the DSU
4.77 In alleging that Canada has acted inconsistently with Articles 22.8 and 3.7 of the DSU, the EC
fails to acknowledge that: 1) the DSB author ization permitting Canada to suspend concessions
remains in effect; 2) it is the EC, and not Canada, that now bears the burden of demonstrating that its
measure now complies; and 3) the EC measure does not benefit from a presumption of compliance in
these circumstances.

(i) The DSB authorization remains in effect
4.78 The EC's claim that its unilateral assertion of its own compliance has resulted in the automatic
termination of Canada's authorization to suspend concessions must fail. That authorization remains
unchanged and in effect to this day. The EC rema ins subject to an ongoing obligation to comply with
its WTO obligations. Moreover, the EC – Hormones dispute has remained at all times under the
surveillance of the DSB, including the EC's ob ligation to comply as well as the suspension of
concessions by Canada that was authorized to induce this compliance.
4.79 Canada's measure is therefore by definition WTO consistent and only the DSB can terminate
the authorization of that measure. Any mechanism for terminating the authorization that is not under
the authority and surveillance of the DSB undermines the ability of the dispute settlement system to
achieve one of its central objectives, that of ensuri ng the security and predictability of the multilateral
trading system.
(ii) The EC bears the burden of demonstrating its compliance
4.80 It is the EC, and not Canada, that bears the bur den of demonstrating that it has complied with
the recommendations and rulings of the DSB. As explicitly recognized by the panel in US – Certain
EC Products, this proposition flows from the general rules on burden of proof. That is, since it is the
EC that seeks to have Canada's authorized and WTO- consistent measure "de-authorized", it is the EC
that bears the burden of demonstrating that the measure should no longer be authorized on the basis of
the actual compliance of its own measure.
4.81 It is therefore incumbent upon the EC to avail itself of the avenues available to it under the
DSU to demonstrate that it has complied with the recommendations and rulings of the DSB, with a
view to having the DSB authorization revoked. Th e EC may have recourse to proceedings initiated
under Article 21.5 or it may initiate new proceedings in which it requests the Panel to deliver findings
on the actual compliance of the EC measure. Under either scenario, Canada's continued suspension of
concessions remains WTO-authorized, WTO-consiste nt and unchallengeable until such time as the
EC successfully demonstrates the compliance of its own measure, and consequently the DSB
terminates the authorization concerned.
(iii) The EC measure does not benefit from a presumption of compliance
4.82 Relying upon an unfo unded assertion that its measure benefits from a presumption of
compliance, the EC claims that it has satisfied the first condition of Article 22.8 of the DSU by
"removing" its measure. As a result, according to the EC, the temporary period provided for in
Article 22.8 has passed and Canada's DSB authoriza tion has been automatically terminated. Canada
does not challenge the existence and correctne ss of a presumption of good faith in many
circumstances, nor does it disagree that authori zed suspension of concessions is meant to be
temporary. However, neither of these principles is relevant in the circumstances of this dispute.
4.83 Underlying this dispute is neither an EC measure taken as part of its day-to-day business of
governing, nor one that the EC has taken to comply prior to the adoption of DSB authorization to
suspend concessions. Rather, this dispute concerns the failure of the EC to correct a measure that had
been found by the DSB to be inconsistent with the EC's WTO obligations, and as a result the DSB
authorized Canada to suspend concessions. The ex istence of DSB authorization, and the adoption by
Canada of a measure based on that authorizati on, distinguishes this case from those situations in
which a presumption of compliance might apply to the EC measure.
4.84 The DSU does not explicitly address how a DSB authorization of suspension of concessions,
once granted, is to be terminated. What is clear is that the EC's unilateral claim of compliance cannot,

in itself, terminate that authorization. Any presumed compliance the EC measure might enjoy prior to
the adoption of the DSB authorization must yield to the actual compliance of Canada's WTO–
authorized measure. Any other interpretation of the DSU would undermine the objective of the
dispute settlement system to ensure the security and predictability of the multilateral trading system.
4.85 If the EC's claims were to be accepted, both meritorious and purely illusory claims of
compliance would result in the immediate terminat ion of the suspension of concessions, even if the
assertions of compliance were patently unreasonabl e. An otherwise WTO-consistent measure ( i.e.
suspending concessions) of one Member would be au tomatically rendered WTO-inconsistent by the
simple adoption and notification of a "compliance measure" by another Member. The self-proclaimed
"complying" Member could buy itself considerable periods of relief through the announcement of a
measure that barely differed from the one originally found to be non-compliant. This scenario would
clearly not contribute to the objectives of inducing prompt compliance and ensuring the security and
predictability of the multilateral trading system.
4.86 The EC's claims under Article 3.7 of the DSU – which are coincidental to its claims under
Article 22.8 – also fail as Canada has demonstrat ed that it has not acted inconsistently with
Article 22.8.
(b) Canada has not acted inconsistently with Articles 23.1, 23.2(a) and 21.5 of the DSU
4.87 The EC also claims that: 1) Canada is seeki ng to redress a perceived WTO violation without
recourse to the rules and procedures of the DSU, cont rary to Article 23.1 of the DSU; 2) Canada has
made a unilateral determ ination that the EC's current measure is not in compliance with the
recommendation and rulings of the DSB, contrary to Article 23.2(a) of the DSU; and 3) Canada's
failure to initiate compliance proceedings to dete rmine the WTO consistency of the EC's current
measure is contrary to Article 21.5 of the DSU. These claims are unsustainable.
(i) Canada is not seeking redress of a perceived WTO violation
4.88 The EC's claim that Canada has sought to re dress a perceived violation without recourse to
the rules and procedures of the DSU is based on a misunderstanding of the basis for Canada's
continued suspension of concessions. The panel in EC – Commercial Vessels found that a necessary
precondition to the application of Article 23 of the DSU is that a Member must be acting in response
to the perceived WTO-inconsistent behaviour of an other Member. In the circumstances before this
Panel, Canada is not seeking the redress of a pe rceived WTO violation; it has already sought and
obtained redress pursuant to the rules and procedures of the DSU.
4.89 In the EC – Hormones dispute, Canada sought and obtai ned DSB authorization to suspend
concessions to the EC after the EC failed to br ing itself into compliance with the recommendations
and rulings of the DSB within the reasonable pe riod of time. Canada's impugned measures were
adopted and continue to be applied pursuant to this validly obtained authorization from the DSB, and
not on the basis of any views it has subsequently de veloped on the consistency of the EC's current
measure. In other words, Canada's assessment of the consistency of the EC's current measure is
unrelated to, and irrelevant to, Canada's continued suspension of concessions.
(ii) Canada has not made a unilateral determination
4.90 The EC is simply wrong to suggest that Canada's continued suspension of concessions
necessarily implies that it has made a unilateral de termination that the EC measure does not comply.
According to the text of Article 23.2 it self, as well as the Appellate Body in
US – Certain EC
Products, that provision simply sets out certain specifi c and clearly-defined forms of unilateral action

already prohibited "in such cases" covered by Article 23.1. Since Canada is not seeking to redress a
perceived violation, it cannot be said to have made a unilateral determination.
4.91 Moreover, the panel in US – Section 301 Trade Act found that a "determination" can only
occur subsequent to a Member having decided that , in its preliminary view, there may be a WTO
inconsistency. Mere opini ons or views expressed before that stag e is reached are not intended to be
covered by Article 23.2(a). In the circumstances in this dispute Canada has not passed this threshold
of having made a "determination" regarding the EC's current measure.
4.92 In support of its allegations that Canada has made such a determination, the EC has
incorrectly interpreted statements made by Cana da in the DSB. The reality is that Canada
consistently stated that it is the EC's responsib ility to establish that it has complied with the DSB's
recommendations and rulings, and as result ther e was no reason for Canada to initiate WTO
procedures or to take any other action. The view s that Canada expressed on the WTO consistency of
the EC's current measure are unrelated to, and irrelevant to, its continued suspension of concessions.
(iii) Canada has no obligation to initiate compliance proceedings
4.93 The EC's allegations that Canada was under an obligation to initiate compliance proceedings
under Article 21.5 of the DSU must also fail, as these allegations are based on unfounded assertions
that Canada is seeking redress of violation and that it has made a unilateral determination. The
mechanism of Article 21.5 was available to either party to obtain a determination as to whether the
EC's measure is in compliance. However, it is th e responsibility of the EC to avail itself of this
procedure if it wishes to have the ongoing DSB authorization terminated.
4.94 The EC's own failure to initiating proceedi ngs under Article 21.5 of the DSU is not a
legitimate basis for a claim that Canada acted unilaterally by not initiating such proceedings. Nor
does it absolve the EC of its responsibility to demons trate that it has brought itself into compliance.
The EC's interpretation of the DSU on this point, we re it to prevail, would negate a WTO Member's
right to rely on a validly obtained DSB authori zation to suspend concessions and would seriously
undermine the proper functioning of the dispute settlement system in the WTO. Furthermore, the
DSU cannot be interpreted to compel a Member to initiate proceedings to challenge another Member's
measures.
4.95 The EC also incorrectly considers Canada's submission in US – Section 301 Trade Act as
contradicting its position in these proceedings. Th e circumstances on which Canada was commenting
in that case were very different from those before this Panel. That dispute concerned a US law
allowing the US to impose retaliatory measures wit hout having obtained multilateral authorization for
such measures. Canada agrees that WTO Memb ers should have recourse to the WTO dispute
settlement system rather than their own unilatera l determinations. In the current case, however,
Canada's measure has been adopt ed pursuant to DSB authorization and the EC's unilateral and
unconfirmed declaration of compliance cannot creat e a positive obligation for Canada to initiate
proceedings under Article 21.5 of the DSU.
(c) The EC has failed to demonstrate its complian ce with the recommendations and rulings of the
DSB in EC – Hormones
4.96 Canada has demonstrated that the EC measure does not benefit from a presumption of
compliance in these circumstances and that the EC bears the burden of demonstrating that it actually
complies. It has failed to do so. What the EC has put forward in respect of its own measure is three
paragraphs from the recitals of Directive 2003/74/EC that summarize the conc lusions of the SCVPH.
This falls far short of a prima facie case of co mpliance with the recommendations and rulings of the
DSB in EC – Hormones.

4.97 The Appellate Body in US – Gambling found that a prima facie case must be based on
"evidence and legal argument" put forward by the party making a claim. It is insufficient therefore
for the EC to simply submit limited evidence and exp ect the Panel to divine from it the EC's claim of
compliance. Nor can the EC simply allege facts without relating them to arguments about how they
demonstrate compliance. When one assesses the EC 's three paragraphs in the light of criteria
established by the Appellate Body, it is clear that the EC has failed to establish even a prima facie
case of compliance.
(d) Arguments and evidence concerning the non-compliance of the EC measure
4.98 The Panel should dismiss this case on the grounds that the EC has failed to make its case in
respect of allegations that Canada has acted inc onsistently with the DSU. Canada is nonetheless
prepared to elaborate on arguments and scientific ev idence that the EC measure does not comply with
the recommendations and rulings of the DSB in EC – Hormones, an issue the EC is trying to avoid.
(i) The EC's permanent ban on oestradiol-17β is not based on a risk assessment
4.99 The EC has not met either of the two conditions required to demonstrate that its permanent
ban on oestradiol-17 β is based on a risk assessment. The EC must demonstrate that the SCVPH
Opinions constitute a "risk assessment" and that the EC measure banning the use of oestradiol-17β for
growth-promotion purposes is "based on" that risk assessment.
(e) The SCVPH Opinions do not constitute a risk assessment
4.100 With respect to the first condition, the Appellate Body in EC – Hormones set out a two-step
process that the SCVPH Opinions must follow to be considered a risk assessment for the purposes of
the SPS Agreement. The SCVPH Opinions must first identify the adverse effects on human health (if
any) arising from the presence of the six hormones when used as growth promotants in meat and then,
if any such adverse effects exist, they must evaluate the potential occurrence of these effects. They do
neither.
4.101 First, the SCVPH opinions do not identify any adverse effects on human health that arise
from the consumption of meat containing residues of oestradiol-17 β that has been used as a growth
promotant. The SCVPH opinions identify only in a speculative fashion potential adverse effects of
oestradiol-17β in general, a substance available fro m many sources both internal (endogenous) and
external (exogenous) to the human body.
4.102 None of the potential adverse effects identified by the SCVPH were said to arise specifically
from the consumption of meat containing residues of oestradiol-17 β when used as a growth
promotant. In fact, the SCVPH specifically acknowle dges the absence of such a link. As a result of
the speculative nature of the identification of potentia l adverse effects in general and the absence of a
specific link between such effects and the use of hormone growth promotants in particular, the
SCVPH opinions cannot be seen to satisfy the first step in the conduct of a "risk assessment".
4.103 Second, the SCVPH Opinions do not evaluate th e potential occurrence of the adverse effects
they purport to identify. The three SCVPH opinions simply point to general concerns about possible
adverse effects of oestradiol-17 β, and do not evaluate the potential occurrence of such effects as a
result of consumption of meat derived from horm one-treated animals. Moreover, the SCVPH has
failed to conduct even the minimum steps of such an evaluation.
4.104 The Appellate Body found in EC – Hormones that the scientific evidence considered in a risk
assessment had to be "sufficiently specific" to the substance at issue. Even those potential adverse
effects that it does identify the SC VPH does not evaluate in a manner that is sufficiently specific to

the substances at issue, and as such the SCVPH ha s not completed the second step required of a risk
assessment.
(f) The EC measure is not based on a risk assessment
4.105 With respect to the second condition, the EC measu re is not based on a risk assessment. Since
the EC has not even conducted a proper risk assessm ent, the measure cannot be said to be "based on"
a risk assessment. However, ev en if the SCVPH opinions are considered to constitute a risk
assessment, the EC still fails to satisfy this cond ition as its measure is not "based on" that risk
assessment.
4.106 The Appellate Body in EC – Hormones found that the results of the risk assessment must
"sufficiently warrant" an SPS measure, and there mu st be a "rational relationship" between the
measure and the risk assessment. In order to satisfy this test, the EC must demonstrate that the
conclusions of its so-called risk assessment (that oestradiol-17 β in general may have adverse effects)
sufficiently warrant the conclusions underlying its measure (that residues of oestradiol-17 β consumed
from meat derived from animals treated for growth-promoting purposes have adverse effects).
4.107 All that the SCVPH has arguably identified are some potential adverse effects associated with
oestradiol-17β per se . It has not demonstrated that these adverse effects occur as a result of
consumption of the quantity of oestradiol-17 β that would be present in meat derived from treated
animals. Even if the conclusions on the adverse effects of oestradiol-17 β were correct, the rational
response would be to ban oestradiol-17β, or at least to inform consumers of its various sources and the
actions they should take to minimize exposure. The EC has instead chosen to respond to advice about
the potential adverse effects of oestradiol-17 β from all sources by banning only meat from animals
treated with oestradiol-17β for certain purposes, while allowing others.
4.108 In EC – Hormones, the EC failed to convince either the panel or the Appellate Body that its
measure – which was nearly identical to the presen t one – was "based on" on a risk assessment. The
evidence that the EC now relies on re mains as insufficient to establish a basis for its ban as it was in
EC – Hormones. As a result, the conclusions of the SC VPH opinions do not support the conclusions
underlying the measure, so the measure is not "based on" a risk assessment.
(i) The EC's ban on the five other hormones is not a provisional measure
4.109 The EC claims that its provisional ban on fi ve other hormones – testosterone, progesterone,
TBA, zeranol and MGA – is justified under Article 5.7 of the SPS Agreement, on the ground that there
is insufficient scientific knowledge to conduct a risk assessment. As the EC has failed to present any
evidence in support of this claim, it must also fail. In fact, the EC expressly stated in EC – Hormones
that its ban on these hormones was not a provisional measure in the sense of Article 5.7, presumably
because it concluded that there was sufficient scienti fic information on which to base its measure at
the time. It strains credulity therefore for the EC to now assert, over seven years later, that the ban on
these hormones is now being imposed on a "provisional" basis.
4.110 The burden of proof rests on the party invoking Ar ticle 5.7 to justify its provisional measure
to make a prima facie case in support of that position. The EC has failed to present any case
whatsoever in support of its provisional ban, choosin g instead to merely cite Directive 2003/74/EC in
support of its contention that its ban is a provisiona l measure. Regardless of where the burden lies,
there is ample evidence to suggest that the EC h as no grounds for justifying the ban on these five
hormones on a provisional basis.
4.111 In interpreting the obligations under Articles 2.2 and 5.7 of the SPS Agreement, the Appellate
Body in Japan – Agricultural Products II set out four cumulative requirements for a measure to be

justified as a provisional measure. A measure ma y be justified as "provisional" where: (1) it is
imposed in a situation where relevant scientific ev idence is insufficient; (2) it is adopted on the basis
of available pertinent information; and such a prov isional measure may only be maintained where: (3)
the Member seeks to obtain additional information necessary for a more objective assessment; and (4)
the Member reviews the measure accordingly within a reasonable period of time.
4.112 With respect to the sufficiency of the scien tific evidence, the body of scientific evidence
relating to these five hormones is such that the EC cannot plausibly argue that it is insufficient to
conduct a proper assessment of risk. The five hormon es have already been the subject of several risk
assessments by reputable national regulatory agenci es and international expert scientific committees,
such as JECFA. In fact, the panel in EC – Hormones found that several scientific reports met the
minimum requirements of a risk assessment.
4.113 JECFA's studies of these five hormones reveal the breadth and depth of the available
scientific evidence. As early as 1981, JECFA eval uated the health effects of residue levels of
progesterone and testosterone, concluding that resi dues from the use of these hormones according to
good veterinary practices are unlikely to pose a hazard to human health. After its most
comprehensive evaluation in 1999, JECFA recomm ended ADI levels for these two hormones. In
2000, JECFA published residue and toxicological m onographs, in which it refe renced a large number
of available studies dealing with progesterone and testosterone. Zeranol and TBA were considered by
JECFA in 1982 and again in 1983. JECFA ultimat ely recommended an ADI for zeranol in 1987 and
one for TBA in 1989. JECFA then turned its atte ntion to MGA in 2000 and again in 2004, at which
time it recommended an ADI.
4.114 In the light of the available scientif ic evidence on which JECFA has based it
recommendations, it is clear that JECFA does not c onsider that residues of these hormones have an
adverse effect on human health, provided they are used in accordance with good veterinary practices.
Faced with this conclusion from JECFA, the EC cannot substantiate its assertion that there is
insufficient scientific information to perform an ad equate risk assessment in respect of these five
hormones.
4.115 With respect to the availability of pertinen t information, the Panel would only need to
consider this second requirement in the event that it accepted that there is insufficient scientific
evidence to allow the EC to conduc t an adequate risk assessment. If the Panel proceeds to this stage,
the requirement that a measure be adopted "on the basis" of available pertinent information requires
that there be a rational relationship between the EC measure and the available pertinent information.
An objective analysis of the available pertinent info rmation regarding the health risks associated with
residues of these hormones does not reasonably support the EC's ban on these five hormones.
4.116 The EC's ban is inconsistent with the current position of JECFA and Codex – an organization
specifically recognized in the SPS Agreement as an international standard-setting body – on the
human safety of these hormones when used in acco rdance with good veterinary practices. JECFA
concluded that there was no need to specify numeric al MRLs for progesterone and testosterone when
these substances are used in accordance with good veterinary practices. JECFA recommended MRLs
for zeranol, TBA and MGA in 1987, 1989 and 2004, r espectively. For its part, Codex indicated in
1995 that it was "unnecessary" to set numerical MRLs for progesterone and testosterone. It did set
numerical MRLs for zeranol and TBA.
4.117 Finally, with respect to the third and fourth requirements under Article 5.7 – the collection of
additional information for a more objective assessment and review within a reasonable period of time
– the EC has not demonstrated that it is co mplying with these obligations. Although the EC
Directive specifically indicates that the Commissi on shall seek additional information from all

possible sources, the EC has provided no evidence of its efforts to obtain the necessary information to
conduct a proper risk assessment.
(g) Canada has not acted inconsistently with Articles I and II of the GATT 1994
4.118 Canada's suspension of obligations is authori zed by the DSB and therefore fully justified
under the DSU. Since the EC's claims under Articles I and II of the GATT 1994 are dependent on its
DSU claims, these consequential claims must also fail.
E. O
RAL STATEMENT OF THE EUROPEAN COMMUNITIES DURING THE FIRST SUBSTANTIVE
MEETING
1. Introduction
4.119 The central provision on which the European Communities bases its claims is Article 23 of
the DSU. Article 23 requires WTO Members to have recourse to the procedures set out in the DSU
instead of resorting to any kind of "self-help." Article 23, in other words, prohibits a WTO Member
from making itself the judge over other WTO Members. What is and what is not a violation of the
covered agreements and what one can do to re medy it, are to be determined multilaterally, not
unilaterally.
2. Seeking redress – Article 23.1
4.120 As to Article 23.1 all parties seem to agree th at when, in 1999, the US and Canada requested,
obtained and started using a DSB authorization to suspend concessions, they were seeking to redress a
violation established at that time. The parties di ffer on what the US and Canada are doing right now.
One should think that they are still seeking redress. After all, they are still applying their suspension
of concessions stating explicitly that they fail to see how the European Communities' implementation
measure achieves compliance. This can only mean that they still see a violation, especially given that
Article 22.8 of the DSU would prohibit the continuation of sanctions in the opposite case.
4.121 The defending parties, however, flatly deny that what they are doing right now is seeking
redress of a violation against an alleged WTO-in consistency of the implementing measure. The
United States states that it "has already sought and obtained redress through the multilateral dispute
settlement system for a violation found by the DSB. " Canada not only uses th e same terms – "sought
and obtained" – but also takes the trouble of under lining those words in its submission in order for
everyone to understand the difference between the present tense ("seeking"), in Article 23.1 DSU, and
the past tense of "sought and obtained". That diffe rence seems obvious enough. What is much less
obvious, however, is how, by referring to the past, the defending parties want to explain what they are
doing right now. Applying sanctions is a form of seeking redress as the defending parties have
admitted themselves. They are currently applying sanctions – present tense, not past tense – so how
could they not be seeking redress?
4.122 They are not seeking redress, so the defending parties say, because they are acting under an
authorization. An authorization, however, can neither deny facts nor derogate from a Member's
obligations outside its scope. Thus, as regards specifi cally Article 23 of the DSU, it is clear that the
mere existence of an authorization cannot simply do away with the obligation to abide by the rules
and procedures of the DSU, when a Member is seeking redress of a violation.
3. Article 23.2(a) of the DSU in conjunction with Article 21.5 of the DSU
4.123 As regards specifically the EC's claim under Ar ticle 23.2(a) in conjunction with Article 21.5
the defending parties put forward a number of reas ons as to why there is no determination by them.

Interestingly enough, they hardly deal with one of the main points the European Communities has
raised, namely that their "unilateral determination" can be inferred from the fact that they continue to
apply sanctions unilaterally. And how could it not be inferred from it? It is inconceivable – and
indeed would be even worse than what we are discussing now – if they did so without any good
reason. On the other hand, both spend considerab le time in their first written submissions explaining
– in a rather defensive manner – that their public statements do not constitute determinations, that they
never alluded to a violation, that they have not yet concluded on non-compliance, etc. And finally,
elsewhere in their submissions, they spend ev en more time explaining why the European
Communities' implementing measure actually falls short of compliance.
4.124 Whether or not a specific statement reaches – as Canada puts it – the "threshold" of a
determination is one thing. Yet, another thing is if that statement is accompanied by conduct that
severely affects the EC's trade. We are not looking at statements made in abstracto here. A
"determination" need not be pinned down to a speci fic statement in a specific form, it is the whole
conduct a WTO Member is displaying that needs to be looked at.
4.125 The defending parties further claim that they do not have an obligation under Article 21.5 of
the DSU to launch compliance proceedings. This Panel, however, is asked to find whether, under
Article 23 of the DSU, in conjunction with Artic le 21.5, a Member has an obligation to launch a
compliance procedure if and because it continues to apply sanctions against another Member, even
though there is a new implementing measure. It is no t relevant for this dispute what obligations can
be found directly in 21.5 in the absence of such unilateral conduct.
4.126 Finally, the United States claims that there is no obligation for the complaining parties to
immediately launch a compliance review. In the present context and circumstances, with almost one
and a half years that have passed after the a doption of the European Communities' implementing
measure at the moment when this Panel was estab lished and with all the discussions that took place
between the parties to this dispute regarding this implementing measure, both before and after it was
adopted, the question of how quickly a retaliating complainant must react to an implementing measure
does not pose itself. If anything, one could discuss the defendants' bad faith and their contradictory
behaviour (venire contra factum proprium).
4. Article 23.1 in conjunction with Articles 22.8 and 3.7 of the DSU
4.127 As regards the EC' claim under Article 23.1 in co njunction with Article 22.8, 3.7 of the DSU,
the defending parties submit that the conditions of Article 22.8 are not fulfilled because the European
Communities did not prove that it has "removed" the inconsistency of the measure. This
argumentation overlooks the fact that dispute settlement proceedings are about a non-compliance
review not a compliance review. Indeed, in all di spute settlement proceedings that have ever been
adopted by the DSB it was for a complaining Member to prove the WTO inconsistency of a measure
by another Member. This is explicitly confirmed by Article 6 of the DSU, the provision under which
panels are established.
4.128 The defending parties ignore that the Europ ean Communities makes its systemic claim under
Article 22.8, in conjunction with Article 23.1. Thus, the Panel is called upon to decide whether or not
the conditions under Article 22.8 are fulfilled in view of the prohibition under Article 23 to make
unilateral determinations of non co mpliance. It is not possible for the defending parties to contest the
removal by the EC of the inconsistency of our ol d measure (Article 22.8), without making a unilateral
determination under Article 23.
4.129 Further, both defending parties submit that the European Communities cannot base itself on a
presumption of good faith compliance. The European Communities bases itself on the same rationale
as the Appellate Body in the Byrd Amendment case. Thus, even though the defending parties allege

that the European Communities is still in violation of the SPS Agreement, this does not in any event
affect the presumption of good faith. As the Appellate Body has made clear, these are two completely
different questions.
4.130 The defending parties claim that there is a reversed burden of proof in a compliance case.
Contrary to what Canada believes, a reversal of presumption can also not be deduced from the DSB
authorization granted in 1999. The DSB authorizati on is limited to giving a Member the right to
apply sanctions. However, it does not go further than that. The DSB authorization cannot reverse the
normal rules which apply for subsequent implementing measures.
4.131 If Canada's criterion of a "day-to-day busin ess" conduct for the presumption of good faith
should bear any relevance at all, the European Co mmunities considers that in the present case it even
supports the EC' reliance on goo d faith. Indeed, the European Communities prepared the
implementation of the DSB recommendations and ruli ngs with extraordinary carefulness. During the
compliance process, the European Communities has made every effort to analyse the relevant
scientific evidence in full transparen cy and with an open mind. All st akeholders – whether inside or
outside the European Communities – had at every mome nt in time the opportunity to submit relevant
information and to intervene in the whole process.
4.132 It is therefore also absurd, and indeed puts the reality on its head, to maintain that the
European Communities in this case s eeks to end the sanctions on the basis of a "mere declaration of
compliance", and that this could be done also just "a week after" the DSB authorization. It insinuates
that the European Communities abu sed its rights and it just waives its hand to claim compliance. In
the light of the whole process, as just described, it is instead fully leg itimate for the European
Communities to rely on the presumption of good faith for its compliance.
4.133 As to the relevance of the DSB authorization fo r the continued application of sanctions in the
context of Article 22.8, obviously, the defending parties and the European Communities have
different views about the scope of the DSB authorization. For the United States and Canada, the DSB
authorization operates like a sort of "absolute justification" which makes every behaviour per se WTO
consistent, irrespective of any subsequent events and compliance acts. On the other hand, the
European Communities considers that it is necess ary to put the DSB authorization in its proper
context under the DSU.
4.134 In this case, the DSB authorization has been granted under Article 22.7 following an
arbitration procedure under Article 22.6 of the DSU. The subject-matter of this Article 22.6
arbitration was the level of nullification or impa irment caused by the original EC's Hormones
legislation. Thus, it is crucial to note that the ve ry basis of the DSB authorization has been the WTO-
inconsistency of the Member before the authorization was granted. On the other hand, the DSB
authorization is not based on any (alleged) WTO inconsistency of a compliance measure that has been
adopted afterwards.
4.135 What follows from this important and undisputab le fact is that, first of all, in case of a
subsequent compliance that is properly adopted an d duly notified to the WTO, the basis on which the
DSB has granted its authorization has fundamentally changed. The DSB only granted the
authorization to suspend concessions precisely b ecause a WTO Member had been found to be WTO
inconsistent in the past and no implementation me asure was taken within the reasonable period of
time. The DSB's authorization was to induce co mpliance by the other Member and to rebalance
temporarily the rights and obligations until the other Member has complied.
4.136 Second, the DSB authorization is even more fundamentally changed in case of a subsequent
compliance measure which has never been found WT O-inconsistent, because the defending parties do
not dare to challenge it under Artic le 21.5. In its first written submission, the European Communities

has referred to the "sequencing" discussion and practice of WTO Members in case of a compliance act
before the DSB authorization is granted. Quite remarkably, in the EC – Bananas III dispute, the DSB
Chairman explicitly stated that the sequencing of a determination of compliance or non-compliance
and the suspension of concessions should be treated in a "logical way forward".17
4.137 As it happened, the logical way forward at the time was to assess first whether or not the
compliance measure was sufficient before determini ng the nullification or impairment caused by the
WTO-inconsistent measure. In stark contrast to th is sequencing, the defendi ng parties consider now
that the logical way forward is to continue to apply sanctions even though the EC' compliance
measure has not been challenged by them and not been found WTO-inconsistent. And what is more,
they even refuse to challenge th e EC' compliance measure pretending that this is not necessary since
they have a DSB authorization.
4.138 But how can Canada and the United States know that the European Communities is still not in
compliance with its obligations? They do so solely on the basis of a unilateral determination of the
EC' compliance measure which is in obvious contradiction to Article 23 and Article 21.5 of the DSU.
4.139 One might argue that the DSU is not explicit on this question. However, the DSU contains
several elements which indicate that the DSB aut horization can not serve as a blank cheque for the
continuous application of the sanctions even afte r a subsequent compliance measure has been adopted
and notified properly to the DSB.
4.140 First, let us consider the wording of Article 22.8 of the DSU and what it does not say. Even
in case of a removal of the inconsistency of the measure, Article 22.8 does not say that the "DSB
authorization ceases to apply". Instead, it states that the suspension of concessions or other
obligations shall not "be applied" any longer. Thus , Article 22.8 does not formally address the fate of
the DSB authorization. In an Article 22.8 situation it is, therefore, perfectly conceivable that although
the DSB authorization is not formally terminated or withdrawn, a WTO Member is not entitled to
continue the application of suspension of concessions. Furthermore, Article 22.8 does not say that the
removal of the inconsistency or the termination of the application of suspension requires whatever
kind of DSB decision. Rather, Article 22.8 is self-e xecuting. The use of the word "shall" supports
this interpretation, which does not give any margin of manoeuvre and requires no additional acts.
4.141 Second, contextually, Article 22.8 describes the next procedural step in the course of a dispute
after an authorization has been granted. Article 22.8, therefore, provides for the next logical step.
Consequently, once the inconsistency of the measure has been removed, the application of suspension
of concessions or other obligations is no longer permitted.
4.142 In addition, Article 22.8 should be interpreted in the context of Article 23 of the DSU, which
prohibits WTO Members from judging unilaterally the properly adopted and notified compliance
measures of other WTO members. According to the text, object, purpose and context of Articles 22.8
and 23, the defending parties must seek a determ ination of non-compliance under the normal DSU
procedures. This general principle is not altered in whatever way under Article 22.8.
4.143 Another contextual element which should be taken into account is Articles 3.7 and 22.1 of the
DSU, which underline the exceptional and temporal nature of the application of suspension of
concessions or other obligations. Their exceptional and temporal nature effectively complements the
principle of good faith. In case of a properly adopted and notified compliance measure, the
exceptional and temporal justifica tion of countermeasures is put into question. In the presence of a
subsequent compliance measure, the "normal" s ituation revives and sanctions can no longer be
applied as if nothing has changed.

17 Minutes of the DSB Meetings held on 25, 28 and 29 January and 1 February 1999, WT/DSB/M/54.

4.144 Canada tries to draw contextual support fo r its position from Article 3.2, emphasizing the
security and predictability given by the DSB authori zation. The "security and predictability" under
Article 3.2, also applies to the WTO Member w ho properly implements its obligations. Once this
Member has removed the inconsistency of the meas ure it should have the reassurance that sanctions
are no longer applied. At a minimum, the implemen ting Member must have the reassurance that its
measure is properly challenged under the DSU by th e retaliating Member, which does not agree with
the compliance measure. But even this, Canada and the United States refuse to do despite the
repeated requests by the European Communities to do so.
4.145 The European Communities would also recall th e object and purpose of the trade sanctions,
which is to induce compliance and to rebalance the rights and obligations under the WTO agreements.
However, both objectives require that a Member 's measure has been found first to be WTO-
inconsistent in accordance with the DSU rules. And such a determina tion concerns logically not just
any measure, but the measure that is currently in fo rce in the Member concerned. Transposed in the
present context, it means that Canada and the Un ited States cannot simply argue that the "old"
measure has been found to be WTO- inconsistent in 1998. This meas ure is not any longer in force,
since the European Communities adopted and notified its compliance measure in 2003. It is simply
not rational and credible to argue that the obj ect and purpose of the suspension of concessions
continues to exist, if its basic reason, i.e. the old WTO-inconsistency, has disappeared.
5. Concluding statement of the European Communities
4.146 The EC believes that allowing public observation of the debate during this hearing has been
very beneficial for the public’s understanding of the dispute settlement process as well as this
particular dispute. The public observation has in no way hindered an efficient conduct of this hearing.
On the contrary, the third parties have clearly be nefited from their observation of this hearing during
the first two days for the purpose of their participation in this dispute.
4.147 What we have heard from the defendants in the last few days is essentially that a retaliating
Member has no obligation whatsoever under the DSU. Instead, the retaliating Member may continue
to apply sanctions until the authorization is "re voked" by the DSB. The United States and Canada
argue that by virtue of this authorization they can simply lean back and see what the complying
Member comes up with. If eventually the complying Member adopts an implementation measure
they do not even see a need to review it in due tim e. Let me remind that in this case the United States
and Canada claim that they have even after two y ears (and I should add after an additional three years
of preparation) not made up their mind whether the EC’s measure is WTO consistent. Indeed there
seems to be no prospect that the United States and Canada will ever make up their minds. Canada has
stated that it would never make a determination about the EC’s new measures and the United States
gave even less cause for reassurance stubbornly refusing even to agree that there is a disagreement.
4.148 Whatever the defendants may mean by these statem ents, it is clear that the United States and
Canada do not accept a responsibility to submit the EC ’s legislation to a multilateral review as it has
been done in any other case by WTO Members wh ich ended in an adopted WTO decision. And
although they do not contest that the EC has acted in good faith, they do not even concede that the
EC’s measure can benefit from a presumption of good faith compliance.
4.149 This is a very easy going way for the United Stat es and Canada. But it cannot be the correct
one under the DSU.
4.150 The EC would recall some essential points which had been discussed by the parties:
4.151 First, the EC has advanced what would be the logi cal solution to this dispute, i.e. to follow its
example in the US – FSC case (launching Article 21.5 compliance procedure by original complaining

party, suspension of sanctions in the meantime). Quite remarkably, the Un ited States fully agreed
with this EC’ approach and considered it as "the appropriate solution" in the US – FSC dispute. Yet,
the EC struggles to understand why in a reverse situ ation where the United States is retaliating, the
United States does not follow this example if it considers it as "appropriate".
4.152 Second, there has been a lot of discussion about the presumption of good faith and the
presumption of compliance, which is important fo r the EC claim under Article 22.8 and Article 23.1
of the DSU. Neither the United States nor Canada nor any of the Third Parties have contested that the
EC has adopted its compliance measure in good faith . Yet, the United States and Canada refuse that
the EC may rely on this principle in a "post-impl ementation" scenario. The United States even wants
to go as far as to say that the principle of good faith is not part of the DSU. Obviously, this view is
contrary to what the Appellate Body has constan tly ruled but also irreconcilable with general
principles of public international law. Moreover, when we asked Canada a bout the basis in the DSU
of its assumption that an implementing Member faced with retaliation is not entitled to this
presumption, it could not provide an y answer. Indeed, this is so because there is no basis for
Canada’s theory.
4.153 Third, during the proceeding we have heard a lot about the risks of an "endless loop of
litigation" by a "mere declaration of compliance". Ye t, as everybody agrees that the EC has adopted
its compliance measure in good faith, it is clear that this "endless loop of litigation" does not arise in
this dispute. Indeed, such an endless loop scenar io presupposes a sort of scam measures notified by a
WTO Member in bad faith. This is not the case befo re us. Indeed, even the EC would not consider
that a "mere declaration of compliance" is sufficien t but what matters is that a Member complies with
its obligations. This is what the EC had actually d one in this case after a most thorough review of its
measure involving a comprehensive review and assessment of the available scientific evidence.
4.154 There is a paradox about the approach of the defendants to the principle of good faith. They
do not contest that the EC has acted in good faith but they argue that WTO Members in general
cannot be expected to act in good faith. They argue, Members with a duty to implement will adopt
sham or scam measures to escape retaliation, it is argued that implementing Members must have the
burden of proving their compliance. The EC does not believe that WTO Members act in bad faith.
No Member wants to lose WTO disputes – and to do so repeatedly and igno miniously. There would
be a high political cost. Also, WTO Members are not excessively litigious and do not gaily engage in
endless loops of litigation. This fear is unfounded. But if this argument about bad faith is allowed, it
can also be used the other way around – to argue th at the United States’ and Canada’s approach will
lead to Members seeking and expl oiting retaliation rights for imprope r purposes. Seeking redress of
WTO violations must not be too difficult; and impl ementation and removal of retaliation must not be
made subject to the often impossible task of provi ng a negative. Retaliation rights should not become
a new means of advancing unilateralist agendas.
4.155 Fourth, when it comes to the DSB authorization, the United States and Canada argue that this
may be revoked if the EC would launch a proceed ing under the DSU, be it Article 21.5, 22.8 or
Article 25 etc. However, both defending parties cannot explain how this would even result in
revocation of the DSB authorization. Well, Canada argues that the DSB coul d probably eventually
make a recommendation to itself to revoke the DSB authorization but there is absolutely no basis for
this in the DSU. And I am not talking about the pr ocedural implications which this could entail. For
instance – according to Canada – in an Article 21.5 proceeding brought by the EC against itself the
burden of proof would be partly on the EC for the implementation of the original DSB
recommendations and ruling. On the other hand, Cana da could bring in its "defence" (in which they
would complain about the WTO consistency of the measure) new claims for which it would bear the
burden of proof. And of course, Canada’s theory cannot even address the question on how these new
claims could be reconciled with the more limited Panel request.

4.156 Finally, let me once stress again that the EC is not seeking to avoid a proper examination of
its compliance measures in the Hormones dispute. We would be delighted if the United States and
Canada would initiate an Article 21.5 dispute to morrow and would do all we can to facilitate and
accelerate its conclusion. However the United Stat es and Canada stubbornly refuse to take this
logical – indeed appropriate – step. It is they who have sought to avoid ha ving to confront the new
EC measures and set out their objections to it in a manner in which the EC can properly respond.
They have, it is true, started to set out – for the first time – their objections in their first written
submissions. The EC does not understand why they did not want to do this in a proper Article 21.5
proceeding.
4.157 We hope that we have assisted the Panel in its important task and look forward to helping the
Panel in any further way that we can in the coming weeks.
F. ORAL STATEMENT OF CANADA DURING THE FIRST SUBSTANTIVE MEETING
1. Introduction
4.158 The EC was found in EC – Hormones to be acting inconsistently with its WTO obligations. It
was given fifteen months to comply, but failed to do so. As a result, the DSB authorized Canada to
suspend concessions to the EC, on the basis of which Canada adopted in 1999 the European Union
Surtax Order . The consistency of Canada's measure w as not challenged for many years, as it was
understood to be adopted on the authorization of the DSB that remained in effect and as a part of a
dispute that remained under the surveillance of th e DSB. The EC is now, however, challenging the
consistency of that measure.
4.159 What has changed? Canada's measure does not suspend concessions at a level higher than
originally authorized; there has been no mutually satisfactory solution; the DSB has not revoked its
authorization; and there have been no findings of EC compliance. Rather, the EC claims that what
has changed is that it has adopted Directive 2003/ 74/EC, amending the EC measure originally found
WTO-inconsistent. The EC notified to the DSB that with these amendments it "considers itself" to
have fully implemented the recommendations and rulings of the DSB in EC – Hormones dispute and
therefore Canada's measure is no longer justified. The EC did not ask whether the DSB "considers"
the EC to be in compliance, nor did it ask whether Canada and the United States "consider" the EC to
be in compliance. It simply asserted that it "consid ers itself" to be in compliance. While the EC
alleges Canadian "unilateralism", it is the EC that has engaged in unilateralism: it is the EC that has
unilaterally determined that it now complies and that the DSB authorization no longer applies. On the
basis of these unilateral determinations, the EC alleges that Canada's measure is WTO-inconsistent.
4.160 While the EC seeks to prevent the Panel from considering the issues in the context of EC –
Hormones, for it to prevail on any of its allegations, the Panel initially will have to make findings that
relate in some way to the issue of the EC's "complia nce". In fact, all parties agree that this dispute
turns on the current status of the EC measure under WTO law. For the EC, the issue is whether the
EC is presumed to have complied; for others, the issue is whether the EC has actually complied.
4.161 Since the EC does not benefit from a presumption of compliance, Canada cannot be found to
have acted inconsistently with its WTO obligations without considerably more evidence and argument
from the EC on how it has actually complied. The EC acknowledges itself in its alternative argument
that if the Panel finds that the EC does not benefit from a presumption of compliance, the only way
for it to prevail on its allegations would be for it to demonstrate its actual compliance. However, the
EC falls far short of meeting even the lowest threshold of evidence and argument required to
discharge this burden. Despite the fact that it is not Canada's burden to do so, Canada will highlight
some of the reasons why the EC has not complied with the recommendations and rulings in EC –
Hormones.

2. Since the EC is not presumed to have comp lied, Canada has not acted inconsistently
with its obligations under the DSU
4.162 The EC's claim that it should be presumed to have complied with the recommendations and
rulings in EC – Hormones is unsustainable. Rather, the EC bears the burden of having the DSB
authorization terminated by seeking multilateral confirmation of its actual compliance.
(a) The EC's measure does not benefit from a presumption of compliance
4.163 The EC's claims rely on the general principle th at States are presumed to act in conformity
with their international obligations. While not di sagreeing with this principle, Canada does disagree
that it applies in these circumstances. The presumption of compliance applies to WTO Members prior
to them being engaged in a WTO dispute. It even applies to WTO Members found to be in breach, as
long as they comply within the prescribed period, an d prior to authorization to suspend concessions.
If the EC measure had been adopted outside the cont ext of a WTO dispute, or if it had been adopted
within the period granted to the EC to comply once it was found non-compliant, it would have
benefited from a presumption of compliance. But in this case, the EC has abused its privilege of
being granted a period of time to comply. The resulting DSB authorization gave the original dispute
an entirely different legal character, altering the "f undamental logic" that underpins the presumption
of compliance. Since the WTO compliance of Cana da's measure cannot co-exist with the presumed
compliance of the EC's measure, the latter must yi eld to the former. The explicit authorization
granted under the terms of the DSU must prevail ov er a presumption of compliance. Therefore, the
EC cannot claim the benefits of such a presumption.
(b) The EC bears the burden of demonstrating that its has complied
4.164 According to the EC, the presumption that its measure complies simply "overtakes" the DSB
authorization, automatically rendering Canada 's measure non-compliant. However, it cannot be
correct that a unilateral assertion of compliance is sufficient to terminate a multilateral authorization.
The EC's unilateralist approach to terminating the aut horization runs directly counter to the object and
purpose of the dispute settlement system that dis putes be decided multilaterally and in a manner that
ensures the security and predictability of the trading system. Since the DSB authorization is based on
findings that the EC was non-compliant, it is up to the DSB to revoke that authorization should it
subsequently find that the EC has complied. The onu s is now on the EC to take appropriate steps
within the multilateral system to confirm its comp liance if it wishes to have the DSB authorization
terminated. No provision of the DSU prohibits the EC from either initiating proceedings under
Article 21.5 of the DSU or initiating proceedings de novo.
(c) Canada has not acted inconsistently with Articles 22.8 and 3.7 of the DSU
4.165 The EC alleges that Canada has failed to term inate its suspension of concessions despite the
EC's notification that it has "removed" th e measure found to be inconsistent in EC – Hormones .
Canada agrees that the issue is whether the EC has complied and Canada also agrees that its
suspension of concessions may only be temporary, but this is where agreement ends. The EC justifies
its claim that its measure has been "removed" on the basis that it is presumed to comply – a
presumption that Canada has demonstrated does not apply in these circumstances – but the EC has
neither sought nor received multilateral confirmation of this. In the absence of a presumption of
compliance or multilateral confirmation of compliance, the EC has not satisfied the pre-conditions of
Article 22.8 of the DSU, and Canada cannot therefor e be held to have contravened that provision.
Without a finding that Canada has contravened Artic le 22.8 of the DSU, Canada also cannot be found
to have acted inconsistently with Article 3.7 of the DSU.

(d) Canada has not acted inconsistently with Articles 23.1, 23.2(a) and 21.5
4.166 The EC's claims that Canada is seeking the redress of a perceived WTO violation
(Article 23.1 of the DSU), that Canada has made a unilateral determination regarding the consistency
of the EC measure (Article 23.2(a) of the DSU) and that Canada's failure to initiate compliance
proceedings constitutes prohibited unilateral conduct (Article 21.5 of the DSU) are also unsustainable.
Contrary to the EC's mischaracterization of the le gal basis for Canada's actions, Canada is not seeking
the redress of a perceived WTO violation; Canada has already sought and obtained redress, after
which it was authorized by the DSB to suspend concessions to the EC. Since it is this authorization –
which remains in effect in the absence of confirmati on of EC compliance – that continues to form the
basis of Canada's suspension of concessions, Canada 's assessment of the inconsistency of the EC's
recent amendments is unrelated to, and irrelevant to, Canada's measure. Any interpretation of the
DSU that would compel Canada to initiate proceedings to challenge the EC's measure runs counter to
the principle that WTO Members cannot be compelled to launch proceedings.
3. The actual compliance of the EC's measure with the recommendations and rulings of
the DSB
4.167 In the absence of a presumption of compliance, the EC must establish that it has actually
complied with the recommendations and rulings in EC – Hormones. While the EC chose not to have
an Article 21.5 panel confirm its compliance, if the EC wishes to see the DSB authorization cease to
apply, it must have this Panel c onfirm its actual compliance, altho ugh it appears unenthusiastic to do
so and has submitted insufficient evidence on this poi nt. Despite the fact that the EC has failed to
demonstrate that it has complied, Canada will demonstrate why it has not.
(a) The EC has not presented a prima facie case that its measure complies
4.168 While the EC implicitly acknowledges in its a lternative argument that it might bear the
burden of demonstrating that it actually complies, the evidence it has put before the Panel falls far
short of what is required to make a prima facie case. A prima facie case must be based on "evidence
and legal argument" in relation to each of the elements of the claim. While the EC claims that it has
complied, it has put forward mere assertions of complia nce. It does not attempt to substantiate these
assertions in relation to the recommendations and rulings in EC – Hormones. For example, it has not
provided any evidence, nor advanced any arguments, that the documents it claims to be that risk
assessment relating to oestradiol-17β actually constitute a "risk assessment". Nor does it explain how
it has met the requirements justifying its ban on the five other hormones as a provisional measure. The
Panel should also reject the EC's alternative claims that its measure actually complies.
(b) The EC's measure does not comply
4.169 Canada will nonetheless demonstrate that, were the EC to make a more substantial attempt to
establish the actual compliance of its continued hormones ban, it would be unable to do so.
(i) The permanent ban on oestradiol-17β
4.170 The EC fails to satisfy the two conditions requi red to demonstrate that its permanent ban on
oestradiol-17β is based on a risk assessment: that the SC VPH opinions constitute a "risk assessment",
and that the EC measure is "based on" that ri sk assessment. The SCVPH opinions do not identify
adverse effects arising from oestradiol-17
β when used specifically as a growth promotant, nor do they
evaluate the potential that these effects will occur. Much of what has been presented is speculation –
based on incomplete and unconfirmed science – about potential adverse effects of oestradiol-17 β
consumed via meat from treated animals.

4.171 The more conclusive the evidence is about potential adverse effects associated with
oestradiol-17β in specific circumstances, the less appli cable that evidence is in identifying and
evaluating any adverse effects associated with oestradiol-17 β consumed through meat from treated
animals. The SCVPH concludes – without evidence – that concern about the adverse effects of
oestradiol-17β in specific circumstances is releva nt to the use of oestradiol-17 β as a growth
promotant. Since the quantity of oestradiol-17 β absorbed by the human bod y from residues in meat is
a fraction of that absorbed from other sources, the id entification of adverse effects that may occur as a
result of the latter does not automatically suggest th at adverse effects may occur from the former. The
SCVPH acknowledges that it has no evidence that the potential adverse effects it identifies arise from
the consumption of meat from treated animals.
4.172 The SCVPH places considerable emphasis on oestradiol-17 β as a possible genotoxin,
presenting a profoundly problematic hypothesis about how reactive oestrogen metabolites can damage
DNA and initiate tumours. This hypothesis has emerged from a limited set of studies done at
exceedingly high doses either on laboratory animals or in vitro . The SCVPH has disregarded or
downplayed – because it refutes its hypothesis – established scientific evidence that defence
mechanisms exist to control the formation of potentially genotoxic metabolites. The SCVPH's
incomplete model of genotoxicity has attracted little support from the international scientific and
regulatory communities.
4.173 While reasonable and responsible governments may act on the basis of minority scientific
opinions, these minority opinions must be based on credible evidence of actual adverse effects and not
on hypotheses and speculation based on models that disregard established scientific principles. The
SCVPH fails to address the issue of the dose required to create an adverse effect, but concludes
anyway that no dose threshold level can be established. In other words, the SCVPH presents no
evidence that an adverse effect th at may theoretically occur at high levels of oestrogen metabolites
actually does occur at normal levels of oestradiol-17β, nor does it present evidence that the residues in
meat from treated animals are capable of reaching th is theoretical level. Therefore, the three SCVPH
opinions do not individually, or collectively, constitute a risk assessment.
4.174 With respect to the second condition – that the EC measure must be based on a risk
assessment – since the opinions on which the EC relies do not amount to a risk assessment for the
purposes of the SPS Agreement, the measure cannot be said to be "based on" a risk assessment.
(ii) The "provisional" ban on the other five hormones
4.175 As for the EC's "provisional" ban on the other five hormones, the EC appears to be availing
itself of the qualified exemption pr ovided for in Article 5.7 of the SPS Agreement. The EC bears the
burden of proving that its "provi sional" measure meets the four cumulative requirements. The EC
must first demonstrate that its provisional ban was adopted in a situation where the "relevant scientific
evidence is insufficient" to allow it to perform a risk assessment. Second, the EC must demonstrate
that its provisional ban was adopted on the basis of "a vailable pertinent information". Third, in order
to maintain its provisional ban, the EC must seek to obtain the additional information necessary for a
more objective assessment of risk. Fourth, it must review its ban accordingly within a reasonable
period of time.
4.176 The EC has made no attempt to demonstrate th e "insufficiency" of the scientific evidence
relating to the five provisionally banned hormones. The body of scien tific data relating to these five
hormones is such that the EC cannot plausibly argue that there is "insufficient" scientific evidence to
conduct an adequate risk assessment. Since the fi ve hormones have been the subject of multiple
scientific assessments by reputable national regulat ory agencies and international expert committees
such as the JECFA, the EC's contention that there is insufficient scientific evidence to do so is simply
not credible.

4.177 The EC has also not established that there is a rational connection between its provisional ban
and the "available pertinent information" on these five hormones, including information from relevant
international bodies such as JECFA and Codex. In fact, the EC's hormones ban is inconsistent with
JECFA's conclusions and with the standards adopt ed by Codex regarding residues of these hormones
in meat.
4.178 Finally, the EC has presented no evidence that , while maintaining its hormones ban, it is
fulfilling the third and fourth substantiv e requirements of Article 5.7 of the SPS Agreement. It has
been nearly two years since the adoption of the EC's so-called provisional ban on these five
hormones. Yet there is no indication that the EC has reviewed its measure in the light of the scientific
data available in the intervening period leading to these proceedings.
4. Conclusion
4.179 In order to resolve this dispute, the first finding of the Panel in this case will have to relate to
the current status of the EC measure under WTO la w. The EC claims that it should be presumed to
have complied with the recommendations and rulings of the DSB in EC – Hormones, and as a result
Canada has acted inconsistently with several of its DSU obligations. However, without the benefit of
a presumption of compliance, the EC cannot succeed on the basis of the arguments it has made so far.
Canada's DSB authorization remains in effect, and it is the EC that bears the burden of proving that it
now complies. If the EC continues to refuse to di scharge its burden under the DSU to demonstrate its
own compliance, the outcome of this case is decide d. On the other hand, if the EC accepts that
burden, Canada has provided some of its own views on whether the EC has actually complied. Seven
years after the DSB issued its recommendations and rulings in EC – Hormones, the total ban re-issued
by the EC remains unwarranted by the evidence adduced.
5. Concluding statement of Canada
4.180 As is typically the case at this stage of disput e settlement proceedings many points have been
made by the participating parties on many subjects. You may not find all of the points raised to be
necessary for the purpose of reaching a proper resoluti on. With this in mind Canada would like to
reinforce some of the basic issues at stake that have been raised before you.
4.181 In 1998, the EC was found by the DSB in the EC – Hormones dispute to be acting
inconsistently with its obligations under the SPS Agreement. In 1999, in an attempt to induce the EC
to comply with its recommendations and rulings, th e DSB authorized Canada to suspend concessions
to the EC. Neither of these facts is contested. Pu rsuant to that authorization, Canada enacted the
European Union Surtax Order, the measure now challenged by the EC. This is also not contested.
4.182 The EC adopted a Directive in 2003 that it considers to have implemented the
recommendations and rulings of the DSB. The EC now claims that the moment that it notified the
DSB that it had adopted this implementing measure , Canada was required e ither to remove its
measure or to challenge the EC’s measure. The EC claims that this is the case regardless of whether
the DSB has confirmed its compliance.
4.183 How does it happen that Canada’s measure enacted as a consequence of a multilateral
authorization cannot be applied subsequent to the EC considering itself that it has brought itself into
compliance and notifying the DSB to this effect?
4.184
 Apparently the answer is that the EC is presumed to have complied such that its implementing
measure prevails over Canada’s duly-authorized m easure. Moreover, not all measures of all Member
States benefit from the same presumption. According to the EC, only those that satisfy some arbitrary
criteria that have no textual basis in the terms of the DSU benefit from this presumption.

4.185 Despite the EC’s efforts to make this disput e a case about presumptions, the key to resolving
the dispute lies first in determining how, and at th e initiation of which party, the actual compliance of
the EC is to be confirmed multilaterally. In fact, all of Canada’s actions at issue in this dispute can be
explained – not in terms of Cana da having made any determination about the compliance of the EC’s
amendments – but in terms of Canada requiring, in the absence of mutual agreement, multilateral
confirmation that the EC has complied. The EC asserts that it has. Canada disagrees.
4.186 But the fact of the matter is that due to the existence of Canada’s authorized suspension of
concessions, neither the EC nor Canada on its ow n can make such a determination. The only
determination of EC compliance that matters at this point is one that must be made by the DSB. And
until that happens, Canada is under no obligation to remove its measure. The issue remains, however,
as to how to have the DSB arrive at such a determination.
4.187 The EC would like to make this dispute about good faith. Canada does not question whether
the EC is acting in good faith. For Canada, th e issue is simply one of compliance, and more
importantly, which party bears the burden of demons trating the compliance of the measure taken by
the EC to implement the recommendations and rulings of the DSB.
4.188 In our view, and as the EC itself readily admits, it is the party alleging the affirmative of a
claim that bears the burden of proof. In this case, si nce it is the EC that is alleging that one of the
three elements of Article 22.8 has been met, it bears the burden of proving it. The EC’s claims
notwithstanding, Article 22.8 is not "self-executing". To suggest that the EC needs simply to notify its
"removal" in order for Canada to be required to re move its measure, is just another way for the EC to
say that its unilateral declaration of compliance can terminate a multilateral authorization. Further, in
this case it is the EC that is a lleging that Canada’s presumptivel y valid DSB authorized retaliation
measure ceases to apply. The EC can only effect this by demonstrating the validity of its own
measure.
4.189 With respect to DSU Article 23, this provisi on only applies where, subsequent to a WTO
Member making a unilateral determination that anot her Member has violated a WTO obligation, the
Member making the determination then seeks to redress that perceived violation by methods other
than DSU dispute settlement. The question of unilate ral determination in this case is a moot point.
All WTO Members make their own assessments of the consistency of other Member’s measures on a
regular basis. What is relevant is whether a Member has acted on that assessment to seek redress
outside of the dispute settlement process.
4.190 While the EC asserts that its violation that pe rmitted the DSB to authorize Canada’s measure
no longer exists, it insists Canada must forego th e exercise of that measure even where the EC
declines to put the matter before a panel. Also, if we understand the EC correctly, even if Canada
were to submit the matter to a panel, because of the presumed compliance of the EC’s measure,
Canada cannot apply its DSB authorized measure while that review takes place.
4.191 Is there a disagreement between Canada and the EC? The EC thinks its measure complies.
As stated earlier, Canada disagrees. However, it do esn’t follow that Canada is now obliged to initiate
a panel under Article 21.5. In the past week the Panel has heard agreement that the DSU provisions
we are dealing with contain many interpretative di fficulties. Clearly the rules are not a model of
clarity.
4.192 However, one thing is clear. Article 21.5 does not create an obligation. It creates a right
 that
WTO Members can use in dispute settlement procee dings. Somehow, the EC reconstructs it as an
obligation in conjunction with Article 23.

4.193 Canada is not advocating a formalistic approach to the termination of the DSB authorization.
What we are saying is that Canada is entitled to rely on this DSB authorization until such time as the
EC demonstrates to a WTO panel that the basis on which the DSB authorization was granted no
longer exists. It is insufficient, as the EC has done in this case, to simply assert that the basis of the
authorization no longer exists as a matter of fact. The EC must prove that this is so by demonstrating
to this Panel that it has complied with the recomme ndations and rulings of the DSB. Until such time
as the EC has met this burden, Canada’s suspension of concessions remains authorized by the DSB.
G. S
ECOND WRITTEN SUBMISSION OF THE EUROPEAN COMMUNITIES
1. Introduction
4.194 The European Communities' case is straightfo rward. WTO Members that apply sanctions
against another WTO Member cannot adopt a lean-b ack-and-wait-attitude over years and continue to
suspend concessions in the presence of a subseque nt compliance measure. Just as WTO Members
who have been found to be in violation of the covered agreemen ts have a positive obligation to
implement, so have retaliating Members a positiv e obligation under Article 22.8 not to apply
sanctions any more and/or, if they disagree with the compliance measure, to initiate WTO
proceedings under Article 21.5 of the DSU. This has always been the prac tice in WTO proceedings.
If a retaliating WTO Member fails to respect these rules and procedures under the DSU, it will be in
violation of Articles 23.1 and 23.2(a) of the DSU.
2. PART 1: Violation of Articles 23.1, 23.2(a), 21.5 and 22.8 of the DSU (systemic issues)
(a) Canada is in violation of Article 23.1 and 23.2(a) read together with Article 21.5 of the DSU
4.195 The existence of a DSB authorization does not exclude that a WTO Member is still seeking to
redress a violation within the meaning of Ar ticle 23.1 and making a determination under
Article 23.2(a). The very fact of applying sanctions implies that a Member is seeking to redress a
violation. And this in turn implies that this WTO Member has made a "determination" about the
WTO-inconsistency of the measure. The applicati on of these sanctions may be justified if a measure
by a WTO-Member has been properly found to be WT O-inconsistent and, if on that basis, the DSB
authorizes the suspension of c oncessions. However, the situation is different regarding the
continuation of sanctions in the presence of a compliance measure which the DSB has not found to be
WTO-inconsistent. A DSB authorization which ha s been granted in view of an original WTO-
inconsistent measure can not justify the continued application of sanctions against a different measure
which has never been found multilaterally to co nstitute a WTO-violation. Rather, since the
application of sanctions requires a causal rela tionship to a WTO-inconsistent measure, any present
application of sanctions must be linked to a present measure. Conversely, the present application of
sanctions to a past and no longer existent measure is not jus tified as it would be unjustified to link the
present application of sanctions to a future, not yet existing measure.
4.196 Canada's counter-argument would lead to the ab surd result that Canada could continue to
apply sanctions irrespective of any events occurring after the DSB authorization and thus ignoring the
object and purpose of sanctions, i.e. to induce comp liance and to rebalance rights and obligations in
case of a WTO violation. If Canada applies sanct ions merely because of the existence of a DSB
authorization and irrespective of a subsequent compliance measure, it is neither inducing nor
rebalancing anything.
4.197 The true motives for Canada's continued appli cation of sanctions are revealed by Canada's
reply to EC Question No.13. Canada makes a link of its current measure to the original purpose of the
DSB authorization. Yet, as the original purpose of the DSB authorization was to induce compliance
and to rebalance rights and obligations, Canada obviously determines that the EC compliance measure

has not achieved either and that, therefore, the orig inal purpose still exists. By doing so, Canada acts
in an illegal way because the continued application su spension of concessions is thus based solely on
a unilateral determination of non-compliance. Canada's action also fits precisely into the definition of
"seeking of redress" as developed by the relevant case law.
4.198 In this context, Canada has also met the thres hold of a unilateral "determination" in violation
of Article 23.2(a). The term "determination" is defined, inter alia, as an "authoritative opinion"; "a
conclusion reached"; "the action of coming to a decisi on"; "the result of this"; "a fixed intention".
This term has been further elaborated by the Panel in US – Section 301 Trade Act . Thus, even an
implicit determination by the appr opriate behaviour, such as the con tinuation of sanctions, would be
covered by a "broad reading" of this requirement, in particular, if the continuation occurs deliberately
and is accompanied by respective statements.
4.199 Moreover, the interpretation of the word "deter mination" should be guided by the context of
Article 23.2(a), i.e. Article 23.1, and the object a nd purpose of this provision. This provision as a
whole aims at preventing that a Member takes "t he law in its hands" and seeks the redress of a
violation on the basis of a unilateral determinati on. The importance of this general principle is
confirmed by the title of this provision. The crucial importance of Article 23 has also been
acknowledged by the Panel in US – Section 301 Trade Act . It is therefore necessary to look at a
Member's behaviour as a whole when confronted with a respective situation. If a WTO Member
repeatedly and consistently states that a violation by another Member exists and if, in this context, this
Member applies concrete measures against the other Member, it can be concluded that this Member is
seeking a redress against a violation on the basis of a unilateral determina tion. Applying these
principles to the present case, there can be no doubt that Canada has made a unilateral "determination"
of non-compliance of the EC measure. This is al ready demonstrated by Canada's comments in the
SPS Committee in respect of the EC draft proposal as early as in 2000 as well as its comments in the
DSB meeting of 1 December 2003.
18 Considering Canada's whole conduct there can equally be no
doubt that Canada has made a "determination" since it deliberately continues to apply sanctions
against the European Communities.
4.200 By refusing to initiate a compliance proceeding in this situation, the European Communities
considers that Canada is also in breach of Article 21.5. Canada's counter-argument that such an
obligation would "vitiate" the existence of the DSB au thorization is fallacious as Canada is essentially
saying that it cannot be obliged to invalidate its DSB authorization by initiating and losing an
Article 21.5 proceeding. The European Communities do es not believe that this is the correct reading
of the DSU. Apart from policy reflections Canada has not offered any legal arguments on why the
continued application of sanctions is not violatin g Article 21.5 in conjunction with Articles 23.1 and
23.2(a). Canada fails to understa nd that in this case the obligatio n to initiate a compliance review
under Article 21.5 is linked to its continued app lication of sanctions against the EC compliance
measure. Because of this continued applicati on of sanctions against the European Communities,
Canada is under a positive obligation to bring a compliance proceeding against the EC measure.
Thus, in this specific situation, Canada's discre tion regarding whether or not it is appropriate to
initiate WTO proceedings is limited as the failure to do so automatically encroaches on the EC rights,
i.e. its right not to be exposed to sanctions fo r a measure which another WTO Member unilaterally
determines as WTO-inconsistent.
4.201 Canada's argument that an obligation to init iate a compliance proceeding in this specific
situation would "seriously undermine" the WTO dispute settlement system is for these reasons equally
not credible. The purpose of the WTO dispute settlement system is not the application of sanctions but
to resolve disputes in a prompt manner. Canada's prot racted application of sanctions and its refusal to
initiate a compliance proceeding against the EC meas ure runs diametrically against this very basic

18 WT/DSB/M/159.

objective of the WTO. The WTO dispute settlement system has to balance the interests of
complaining and defending parties, it is not an excl usive tool for a retaliating Member. Consequently,
a Member in violation of its WTO obligations is under an active obligation to comply. Conversely,
the retaliating Member is under an active obligation to initiate a compliance review under Article 21.5
and failure to do so will result in a violation of Article 23.1, 23.2(a), 21.5 of the DSU.
4.202 Finally, the European Communities would take issue with Canada's theory regarding a self-
initiated Article 21.5. As repeatedly stated in its Written and Oral Statement, it is not possible or
meaningful to initiate a compliance review agains t its own implementing measure. The DSU is based
on a contradictory proceeding whereby a complaini ng party alleges a WTO-violation against another
party. Conversely, the DSU does not provide for a situation where a "complaining party" alleges the
WTO-consistency of its own measure, in particular to prove the negative that its measure is not WTO-
inconsistent. Contrary to what Canada asserts this is also clearly spelt out in Article 6. The terms
"complaining party" and "complaint" cannot be read in the "broad sense" as Canada suggests. The
New Shorter Oxford Dictionary defines the term "complaint" as a "formal accusation or charge, a
subject or ground of dissatisfaction". Obviously a case initiated under Article 21.5 would not fulfil
any of these definitions as the European Communiti es would not bring a "charge" against its measure
or express any dissatisfaction about its compliance m easure. By way of context, Articles 3.8 and 1.1
also demonstrate the proper distribution of the parties' roles under the DSU.
(b) Canada's continued suspension of concessions a nd related obligations is in violation of
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU
4.203 The European Communities disagrees with Canada 's assertion that the continued application
of the sanctions is unrelated to the EC compliance measure. Since the original EC measure has been
removed, Canada's argument would mean that Cana da is currently applying sanctions against a non-
existent measure. Such a conclusion would not only be illogical but also in plain contradiction with
the very purpose of sanctions, namely to rebalan ce rights and obligations and to induce compliance in
the light of a current WTO violation. Instead, as explained sev eral times, it is obvious that Canada
continues to apply sanctions because it consider s the EC compliance measure as WTO-inconsistent.
However, the continued application of an "old" DS B authorization cannot be justified against a "new"
measure on which the DSB authorization is not based and if this measure has never properly been
found WTO-inconsistent.
4.204 Contrary to what Canada believes the prohibitio n to continue the application of sanctions
under Article 22.8 of the DSU does not depend on whet her the DSB authorization has formally been
removed. Article 22.8 of the DSU is unequivocal in the sense that the susp ension of concessions and
related obligations may only be "a pplied" until the inconsistency of the measure has been removed.
Canada constantly fails to acknowledge the difference between the "existence" of a DSB authorization
and the "application" of sanctions. Under Article 22.8 it is quite noteworthy that the scope of
application of sanctions is limited to a "measure f ound to be inconsistent with a covered agreement".
Yet, the only way to "find" a measure to be WTO-inconsistent under the DSU is through the
multilateral procedure. Consequently, it is not possi ble to apply sanctions under Articles 22.8, 23.1
solely on the basis of a "unilateral finding" of inco nsistency. In the same vein, the continuation of
sanctions cannot be based on a unilateral finding of inconsistency of the compliance measure. In this
context, the self-executing nature of Article 22.8 al so needs to be taken into account. The termination
of the application of sanctions under this provi sion does not depend on a specific finding of the DSB
or a withdrawal of the DSB authorization. Rath er, once the conditions under Article 22.8 of the DSU
are met – including in the presence of an unchallenged compliance measure – the application of
suspension "shall" stop.
4.205 The European Communities also takes issue with Canada's as sertion about the reversed
burden of proof in this "post-suspension scenario". Ap art from the fact that Canada's theory is rooted

in the misconception that otherwise the DSB authorization would be terminated merely on the basis of
a presumption of good faith compliance it has also no basis whatsoever either under WTO law or
under public international law. The WTO jurisprude nce is crystal clear that the party bearing the
burden of proof is the one that asserts the affirmative of a claim or defence. Furthermore, the burden
of proof is one concrete example of the genera l good faith principle, i.e. the presumption of
compliance. This principle applies to an implemen ting measure as such but not to a specific timing
when the measure had been adopted. The absurdity of Canada's theory is best exemplified in the
present case where the European Communities had to st udy in detail the difficult scientific questions.
Because of its carefulness the European Communitie s was not in a position to respect the reasonable
period of time (RPT). Yet, according to Canada, if the European Communities had hastily adopted a
compliance measure within the RPT this measure would benefit from a presumption of compliance
whereas a measure which has been prepared with much more carefulness does not.
4.206 Even though there might be a question about th e relationship between this principle and the
"application" of a DSB authorization, the DSU also provides for a solution to this question which is
the compliance proceeding under Article 21.5. Thus, if a retaliating Member contests the WTO
consistency of an implementing measure it must initiate a compliance proceeding. In this context,
Canada's argument to the security and predictability of the trading system is also off the point. In
Canada's view the only secure and predictable way of the trading system is obviously the application
of sanctions. However, the application of sanctions under the DSU is not an objective in itself. The
application of sanctions is designed to achieve fu ll compliance with the WTO obligations by another
Member. Thus, if a violating Member has adopted compliance measures in good faith, it is indeed a
matter of security and predictability of the trading system that the application of sanctions ceases to
apply, if these measures are never properly challenged.
4.207 Finally, the European Communities disagrees with Canada's theory regarding the way a DSB
authorization may be terminated which is not support ed by the text of the DSU. As explained in
detail in the EC second written submission, Canada's theory contains a num ber of inconsistencies
such as that it is the DSB that r ecommends to itself the termination of the authorization or perhaps the
panel that recommends to the DSB to do so (contrary to Article 19) or in respect of an implicit
revocation of the authorization through the adopt ion of reports. Yet, one wonders how such a
recommendation could be made give n that under Canada's theory, the DSB authorization makes the
continued sanctions by definition legal. Also, this raises the qu estion how the suggested implicit
authority can be squared with Article 2.1 which exp licitly lists the tasks of the DSB. An implicit
revocation of a DSB authorization is not included in th is list. In the same vein, Article 2.4 refers to
the decision-making powers of the DSB "where th e rules and procedures of this Understanding
provide". Yet, Canada cannot explain where the DSU provides for such an implicit revocation of a
DSB authorization. Furthermore, under Canada's theory new "claims" would suddenly become
"defences" even in case of a self-initiated Article 21 .5 proceeding. This means in other words that
Canada assumes a right to redraft the Panel's terms of reference on the basis that a new claim (e.g. a
violation of Article III) is a "defence" against an ol d claim (e.g. Article I). However, Canada cannot
explain how an alleged violation of Article I could be "defended" by a new violation under Article III.
Moreover, Canada appears to arguing the absurd theo ry that the subject-matter of an Article 21.5 is
not only the compliance measure but also the applica tion of the sanctions which is however, in plain
contradiction to the terms of Article 21.5.
3.
PART 2: The WTO-consistency of the EC compliance measure
4.208 The European Communities, in its Oral Statemen t at the first substantive hearing as well as in
a number of replies to the Panel's questions, has e xplained the various steps undertaken to carry out
the comprehensive risk assessment which led to the adoption of its implementation measure, i.e. the
revised Hormones Directive 2003/74/EC. As the Appellate Body found that the studies and other
evidence presented by the European Communities was relevant but not sufficiently specific, the

objective of the compliance effort undertaken was to re-assess all existing and most recent data from
any relevant source for the six hormones and to comple ment these data in particular in three respects,
namely: (a) on certain issues regarding specific he alth risks from residues in meat treated with
hormones for growth promotion purposes, (b) on risks arising from possible abusive use and
difficulties of control, and (c) on an appropria te risk assessment for melengestrol acetate (MGA),
which had not been carried out so far. To this effect the European Communities launched 17 specific
studies and tried to collect information from all relevant sources, including from third countries,
international scientific bodies (such as JECFA) and i ndustry. All these steps were undertaken in full
transparency and after consulting the relevant sci entific committees and bodies that are responsible
under Community law to conduct this kind of assessment.
4.209 In November 1998, the European Communiti es mandated its Scientific Committee on
Veterinary measures relating to Public Health (SCVPH), to address the potential risks to human health
from hormone residues in bovine meat and meat products treated with the six hormones for growth
promotion. The SCVPH adopted its opinion unanim ously taking into account all pertinent scientific
information available at the time, including JECFA's revised assessment of the three natural hormones
oestradiol-17β, testosterone and progesterone that had been issued in February 1999. The 1999
Opinion concluded that a risk to the consumer had b een identified with different levels of conclusive
evidence for the six hormones evaluated. Subsequently, the SCVPH was twice requested to review its
opinion in light of new assessments carried out by other bodies or institutions and new evidence. The
SCVPH did so in 2000 and 2002. The SCVPH concluded both times that the new evidence did not
provide convincing data and arguments demanding revi sion of its previous conclusions. On the basis
of the above scientific risk assessments provided by the SCVPH, the competent European regulatory
authorities carried out an analysis of risk manageme nt options in light of the appropriate level of
protection it had chosen. This lead to the adoption of the EC' compliance measure 2003/74/EC.
4.210 As explained in detail in the second writte n submission, JECFA's assessment proved
insufficient in various respects and where the SCVPH conducted a more thorough analysis. These
areas concern carcinogenicity of the three natural hormones and the outdated residues data as well as
for data concerning the dose-response relationship. In respect of the latter, JECFA also neglected the
endogenous production in the case of pre-pubertal children. Furthermore, the 1999 JECFA report has
been seriously undermined by recent developments concerning the bioavailability of residues of these
hormones. JECFA also failed to address the possibilities for misuse or abuse when the administration
of these hormones is freely authorized "over the counter", as is the situation in the United States.
4.211 Turning to the legal arguments, the Europ ean Communities disagrees with Canada's
arguments regarding the burden of proof. The Eu ropean Communities, at the oral hearing and in
reply to the Panel's questions, has demonstrated a violation of Articles I:1 and II of the GATT 1994
by Canada and that the measure found to be inconsistent has been "removed" in the context of a direct
claim under Article 22.8. In particular, the Eur opean Communities has pointed out that it cannot be
required to prove a negative, namely that there is no violation of WTO obligations. In line with the
established case law of the Appellate Body, it is for Ca nada, in this case, to set out a prima facie case
of violation, and not for the European Communities to set out a case of non-violation.
(i) The ban on oestradiol-17β is in conformity with Article 5.1
4.212 The European Communities conducted a proper risk assessment within the meaning of
Article 5.1 and Annex A Point 4 of the SPS Agreement. The European Communities has pointed out
in its reply to Question 24 of the Panel, that ther e is a difference between a scientific risk assessment
in the narrow sense clearly referred to here by Cana da and the risk assessment within the meaning of
Article 5.1 and Annex A Point 4 of the SPS Agreement. The latter, as has been stated by the
Appellate Body, also comprises a risk management stage which is the responsibility of the regulator
to carry out and not the scientific bodies. Canada concentrates its arguments on the alleged flaws in

the scientific risk assessment of the SCVPH a nd the European Communities will reply to these
arguments.
4.213 Canada submits a series of factually and lega lly incorrect arguments in respect of the
identification of the adverse effects. In partic ular, as the European Communities' written and oral
submissions have shown, Canada's arguments are b ased on outdated data of its own or of JECFA and
misinterpret the findings of the latest scientific evidence, including that generated by the 17 EC
studies. Indeed, all the references in Canada's su bmissions are confined essentially to the findings of
JECFA of 1988 and 1999 for th e three natural hormones and of 2000 for melengestrol acetate.
However, these findings by JECFA did not take in to account the more recent evidence on which the
1999-2002 evaluations by the SCVPH are based. To overcome this obvious difficulty, Canada argues
that the findings of the SCVPH are not specific to residues in meat. This argument of Canada is
flawed, because the 1999 and 2002 Opinions of the SCVPH have a specific chapter for each of the six
hormones about the dose-response question and the potential risks from residues in meat from animals
treated with these hormones for growth promotion. Canada ignores the fact that even JECFA has
declared oestradiol-17 β for the first time in 1999 to have "genotoxic potential", which means that
there is normally no safe threshold for any amount of residues in meat from this hormone. So the
issue of specificity for this hormone becomes irrelevant. Canada's claims are also contradicted by the
most recent evidence (the US for the first time in 2002 recognised in its National list of carcinogen
oestradiol to be a proven carcinogen), which indicat es that there is no safe threshold for this hormone.
The SCVPH finding is also confirmed by more recent literature as well as more recent data of
endogenous production by pre-pubertal children.
4.214 Canada's statement that the SCVPH Opinions di d not clearly identify the presence of adverse
effects is also incorrect as demonstrated by pag es 41 to 43 and 72 of the 1999 Opinion. It is also
incorrect, as demonstrated by the JECFA report, to allege that the SCVPH opinion based its
conclusions on the genotoxic effects of oestradiol-17 β on a hypothesis that is not recognized
elsewhere. The UK Sub-Group Report also acknowledges the risk of genotoxic effects of
oestradiol-17β. Finally, it is true that some foods that are part of a balanced human diet naturally
contain oestradiol-17 β. However endocrine hormones regulate a variety of physiological functions
and their balance is a very delicate matter; in par ticular pre-pubertal children are the group of greatest
concern in this respect. It is therefore necess ary to reduce the amount of additional hormones the
population is exposed to to a level that is as low as reasonably achievable by avoiding excess intake
due to the use of hormones as growth promoters. It is necessary that substances used in animals
provide reasonable certainty of no harm in particular if their use does not provide any benefit for the
animals treated that would justify the tolerance of such harm. Therefore, if oestradiol-17 β increases,
e.g. the incidence of breast cancer as more recent studies seem to indicate, any avoidable increase,
however small, is not desirable.
4.215 Contrary to what Canada asserts the risk assessment did also evaluate the potential occurrence
of the adverse effects it purports to identify. This issue is referred to in the SCVPH Opinions in
several points as specified in the EC second written subm ission. Furthermore, in arguing that the ban
on oestradiol-17β is not based on a risk assessment, Canada essentially repeats the argument on the
lack of specificity of the risk assessment which is, as explained, not of any value.
(ii) The provisional bans on five of the hormonal substances do not violate Article 5.7
4.216 Contrary to what Canada argues the provisi onal bans on the five hormonal substances
progesterone, testosterone, trenbolone , zeranol and MGA are in conformity with Article 5.7 of the
SPS Agreement because the current evidence is insufficient. The European Communities recalls that:
(1) what the European Communities had considered to be sufficien t evidence had been found to be
insufficient by the Appellate Body and proved indeed to be insufficient also in the light of risk
assessment standards that were developed in the years after the EC – Hormones decision; and (2) the

body of evidence, in the meantime, has developed and, while still not providing enough knowledge to
carry out a complete and definitive risk assessme nt, supports the conclusion that precautionary
measures are required in order to achieve its chosen level of protection.
4.217 As further detailed in its Written and Oral Submissions, the European Communities
considers, on the basis of the 1999 – 2002 SCVPH opinions, that the current evidence is full of gaps
in pertinent information and important contradic tions that render the conclusions reached by JECFA
in 1988, 1999 and 2000 no longer valid. Thus, it does not allow in qualitative or quantitative terms,
the performance of an adequate assessment of ri sks as required under Article 5.1 and as defined in
Annex A to the SPS Agreement. Furthermore, since the latest risk assessment by the SCVPH in 2002,
there appeared internationally a number of furthe r scientific developments all of which converge
toward, and provide further support to, the conclusions reached by the relevant scientific committee of
the European Communities, such as a study supported by the Ohio State University, the US National
Cancer Institute and the US Department of Defe nce Breast Cancer Research program concerning
zeranol (and oestradiol-17β) or a large scale epidemiological study in Europe suggesting that high red
meat intake is associated with (statistically signif icant) increased colorectal cancer risk, confirming
results from previous smaller studies. Additi onally, in 2002, the women's health Initiative
Randomised Controlled Trial published findings indica ting that the risks outweigh the benefits from
the use of oestrogen plus progestin in healthy pos tmenopausal women, thus reinforcing the previous
findings made by the IARC in this respect. All this evidence and most recent scientific developments
have now clearly tipped the balance against th e previously held assumption (by Canada and
Codex/JECFA) that residues of these hormones in meat from animals treated for growth promotion
pose no risk to human health.
4.218 Consequently, the evidence which served as the basis in the 1988 and 1999-2000 JECFA
evaluations of these hormones is not sufficient to perform a definitive risk assessment, in particular by
the WTO Members applying a high level of health pr otection of no risk from exposure to unnecessary
additional residues in meat of animals treated with hormones for growth promotion. To deny the
existence of this new scientific reality would deprive the European Communities and other WTO
Members of their autonomous right to choose their appropriate level of protection, because it would in
effect impose on them a requirement to demonstrate positively the existence of clear harm, which they
may not always be able to fulfil in case of cancer because of the long latency period and the numerous
confounding factor that play a role. This will re nder the application of Article 5.7 impossible in a
situation where the body of the pertinent scientific evidence is in the process of moving from a state
of presumed "sufficiency" into a state of pertinent "insufficiency". The text and preparatory history of
the SPS Agreement do not support such a (restrictive) construction of Article 5.7, which would
moreover be against the principle of effective treaty interpretation.
4.219 Finally, Canada has not put forward any specifi c arguments as to why the available pertinent
information on the five hormonal substances in question would not be insufficient, but instead
sufficient. It has therefore failed to meet the burden of setting out any prima facie claim.
4.220 In any case, in its second written submission the European Communities has set out in detail
the state of insufficient evidence as determined by the SCVPH for each of the hormones which have
been provisionally (progesterone, testosterone , trenbolone, zeranol, MGA) prohibited by the
Directive 2003/74/EC. In particular, as regards ze ranol, Canada does not put forward any specific
argument as to why the evidence assessed by th e SCVHP would not be insufficient. The only
assessment on zeranol publicly available is that of JECFA which dates back to 1988. The SCVPH
took into account this assessment but disagreed with a number of its basic findings on the bases of
more recent scientific evidence, some of which w as generated by the 17 EC studies. Moreover, the
most recent study on zeranol and the risks associ ated with its administration to meat producing
animals is done by independent US scientists mentioned above and it clearly invalidates the findings
of the 1988 JECFA opinion.

4.221 Furthermore, as regards MGA, there is currently no international standard or recommendation
on MGA, as Codex has not adopted one. JECFA assessed MGA for the first time in 2000 (and in 2004
as regards the calculation of the MRL only), but this has not yet led to the adoption of a standard. If
one examines the evidence that served as the basis of the 2000 JECFA report it can be seen that nearly
all the studies referred to therein date from the 1960s and 1970s. These very old studies constitute in
fact the evidence which the defending parties have refused to provide to the European Communities,
despite its repeated requests on the grounds that th ey are confidential. In the absence of a Codex
standard, the opinion of JECFA becomes irrelevant, fo r the additional reason that it failed to take into
account the more recent data generated by th e 17 EC studies and the 2002 SCVPH assessment.
Canada does not put forward any specific argumen t as to why the evidence assessed by the SCVPH
would not be insufficient. It does not even refer, in this context, to the fact that MGA, in the
meantime (2000), has been assessed (for the first ti me) by the JECFA and which subsequently has
been taken into account by the SCVPH in its 2002 Opinion.
4.222 The European Communities adopted the provisional prohibitions on the basis of the available
pertinent information. The only argument that Canada raises in this regard is that the European
Communities' measure is not based on JECFA's ass essment. However, as the European Communities
explained, JECFA's assessment was cons idered to be insu fficient, because, inter alia, it was found to
be outdated.
4.223 The European Communities has also not violat ed its obligation to seek to obtain the
additional information necessary for a more objective asse ssment of risk or to review the measure in
question. Canada does not put forward any convincing argument as to why the European
Communities would have failed to fulfil its obligat ion to seek additional information. Indeed, the
European Communities has specifica lly laid down that obligation in Directive 2003/74/EC. As a
matter of fact, it has already undertaken initiatives to seek additional information. In particular, it has
issued a new call for scientific data and resear ch from 2002 onwards, on substances with hormonal
activity which may be used for growth promotion purposes in bovine meat.
4.224 In the view of the European Communities, and as explained in reply to the Panel's Question
71, a requirement to review a measure "within a reasonable period of time" can only apply as of the
coming into effect of the provisional measure in qu estion. The Directive has come into effect on
14 October 2003. Thus, it can ha rdly be argued that a reasonable period of time has actually already
elapsed.
4.225 The European Communities has moreover pointed out that Directive 2003/74/EC contains an
obligation to "keep the measures a pplied under regular review with a view to timely presentation …
of any necessary proposals." Regular review certa inly implies reacting, as appropriate, to new
evidence or information that may appear. As a matte r of fact, the only new information that has come
to the knowledge of the European Communities is th e recent draft assessment of the UK Group. That
draft report has already been forwarded to Europ ean Food Safety Authority for review. Equally,
should the recent call for new scientific informat ion (see above) yield any new evidence, such
evidence would also be assessed by EFSA without any undue delay.
4.226 In conclusion, Canada has not put forward any convincing arguments to support its claim that
the European Communities has vi olated Article 5.7 of the SPS Agreement
 in adopting a provisional
ban on the five hormonal substances progesterone, testosterone, zeranol, trenbolone and MGA.

H. SECOND WRITTEN SUBMISSION OF CANADA
1. Introduction
4.227 Canada will demonstrate again that the EC's allegations under the DSU are without merit.
The EC has recognized that the real object of these proceedings is to review the compliance of the EC
measure with the recommendations and rulings of the DSB in EC – Hormones. Canada will elaborate
further on that issue in this rebuttal submission.
2. The EC's claim under the DSU
(a) Canada has not acted inconsistently with Article 23.1 of the DSU
4.228 The EC claims that DSU Article 23.1 read "i n conjunction with" Articles 23.2(a) and 21.5
imposes a new obligation on Canada that finds no te xtual basis, in that DSU Article 21.5 does not
contain an obligation for any WTO Member to initia te compliance proceedings. The EC also claims
that Article 23.1 "in conjunction with" DSU Article s 22.8 and 3.7 removes Canada's right to act in
accordance with the DSB authori zation to suspend concessions without multilateral intervention by
the DSB (contrary to DSU Articles 3.2 and 19.2). This interpretation of DSU Article 22.8 would
render WTO inconsistent, without multilateral confirmation of the EC's compliance, a Canadian
measure enacted pursuant to a multilateral authorization.
4.229 Canada's continued application of an authorized measure suspending concessions cannot be a
conduct inconsistent with Article 23 of the DSU si mply because the EC claims it has complied. The
EC's adoption and subsequent notification to the DSB of its purported implementing measure does not
change the legal basis for Canada's measure. Given that the EC is responsible for obtaining
multilateral confirmation that it has complied, Cana da's conduct is not "seeking redress". The term
‘redress' implies a reaction by a Member against another Member, because of a perceived WTO
violation, with a view to remedying the situation. Canada's conduct is not aimed at remedying any
perceived violations by the EC, but is based on the DSB authorization.
(b) Canada has not acted inconsistently with Article 23.2(a) of the DSU
4.230 Given that Canada is not "seeking redress", Canada cannot have made a "determination"
within the meaning of Article 23.2(a) of the DSU. That provision applies only where a Member is
seeking redress of a WTO violation. The panel in US – Section 301 Trade Act is the authority for this.
(c) Canada has not acted inconsistently with Article 22.8 of the DSU
4.231 Where concessions have been suspended on the basis of an authorization by the DSB (and
absent a mutually satisfactory solution), the onus is on the Member originally found to be non-
compliant to take steps to confirm multilaterally that it has satisfied at least one of the conditions of
Article 22.8. Without such multilateral confirmation, the DSB authorization remains in effect and
continues to authorize the suspension of concessions by the original complaining Member. The EC
objects to this interpretation of its obligations on several unsustainable grounds.
(i) The EC must confirm its compliance in EC – Hormones
4.232 The result of the EC's failure to comply within the reasonable period of time is that it bears
the burden of demonstrating that it has now comp lied with the recommendations and rulings of the
DSB in EC – Hormones if it wishes to have the suspension of concessions no longer applied. Given
that the 2003 Directive simply amends the 1996 Directive, a review of the compliance of this measure
is not an abstract exercise about a review of the EC's compliance in this context. The DSB

authorization does not provide "absolute justifica tion" for any behaviour. Rather, until the EC
receives multilateral confirmation that it has brought itself into compliance, Canada is entitled to
continue to rely upon the authorization. The immediate threshold issue is therefore which party bears
the burden of confirming the compliance. The requirement that the EC bear this burden if it wishes to
have the suspension of concessions ended is simply the logical consequence of the position in which
the EC has placed itself in the EC – Hormones dispute.
(ii) Article 22.8 of the DSU is not "self-executing"
4.233 DSU Article 22.8 cannot be "self-executing" in the light of the overall DSU regime of
surveillance in circumstances of non-compliance. In the light of the object and purpose of the DSU,
and in the context of the other provisions re lating to non-compliance, Article 22.8 requires
multilateral confirmation that the conditions precedent have been satisfied before the suspension of
concessions can no longer be applied. The aut horization to suspend concessions as a result of a
failure to comply is granted solely by the DSB. A subsequent, unconfirmed claim that Article 22.8
has been met is insufficient on its own to disp lace the multilaterally-agreed surveillance regime,
regardless of how much effort is put into the measure underlying the claim.
4.234 The EC confuses several distinct issues relate d to "good faith" and "bad faith". The
suggestion by the EC that denying the presumption of compliance would be tantamount to a finding
of bad faith should be rejected. The issue of a presumption against bad faith is an entirely separate
matter from that of compliance. A finding that a Member does not comply with its WTO obligations
amounts to neither an accusation nor a finding of bad faith. According to the EC, the alleged self-
executing nature of Article 22.8 is based on the degr ee to which its efforts to comply are serious and
in good faith. Presumably, those who do not satisfy the criteria put forward by the EC bear the burden
of demonstrating compliance, whereas those who do satisfy these criteria do not. However, the EC is
silent on the mechanisms to determine whether a Me mber satisfies these criteria. It is to avoid this
kind of subjective application of "criteria" that mu ltilateral confirmation is required to give effect to
Article 22.8.
4.235 The adoption of a measure in one Member ca nnot be allowed automatically to render WTO
inconsistent a measure of another Member, without so me intervening international act. In the light of
the overall regime of compliance, the dispute settlement system requires actual findings of
compliance or non-compliance before Article 22.8 can be given effect. That the EC bears this burden
is the consequence of the status of non-compliance in which it has placed itself.
(iii) The DSB authorization need not be formally terminated
4.236 The obligation to remove the suspension of co ncessions does not only arise with the formal
revocation of the authorization by the DSB. The more important substantive act (between the EC's
claim of compliance and the acquisition by Canada of an obligation to remove the suspension of
concessions) is "multilateral confirmation" that th e EC measure found to be inconsistent in EC –
Hormones is no longer inconsistent. While no specific provision in the DSU requires the formal
revocation of the authorization, this does not mean that there cannot be an act by the DSB that is
equivalent to revoking the authorization, whether that is implicit or explicit. The "multilateral
confirmation" of compliance would generally come in the form of adoption by the DSB of panel
findings of compliance. Thus "confirmation" of comp liance and the "revocation" of the authorization
are essentially the same act of the DSB.
(iv) The EC has several mechanisms to confirm compliance
4.237 The EC could have obtained multilateral c onfirmation of its compliance through DSU
Article 21.5 proceedings. Nothing prevents the EC from initiating such proceedings. Nor, where

compliance is found, are there any limitations on the jurisdiction of such a panel preventing it from
making recommendations to the effect that the DSB authorization should no longer apply.
4.238 The EC may also choose to confirm its compliance in proceedings de novo, such as in these
proceedings, in order to have the DSB authori zation terminated. The main objective of these
proceedings should be a review of the compliance of the EC with the recommendations and rulings in
EC – Hormones. The EC bears the initial burden of proof to demonstrate compliance.
3. The EC's compliance in EC – Hormones
4.239 In EC – Hormones, the EC measure was found inconsistent with the requirements of
Articles 3.3 and 5.1 of the SPS Agreement. The EC now asserts that it h as complied, on the basis that
its permanent ban on oestradiol-17 β is supported by a risk assessment within the meaning of
Article 5.1 and that its provisional ban on the othe r five hormone growth promotants is justified under
Article 5.7. It has failed to demonstrate this.
(a) The relevant international standards and the EC's level of protection
4.240 Pursuant to Article 3.3 of the SPS Agreement, the EC must demonstrate that there is
"scientific justification" for its determination that international standards are "not capable of achieving
[its] chosen high level of protection" of "zero a dditional risk". Whereas Codex established MRLs for
TBA and zeranol, and decided that none was necessary for oestradiol-17 β, testosterone and
progesterone, the EC has determined that no thresh old exposure levels can be established for any of
the six hormones when administered for growth-p romotion purposes. Since the SCVPH opinions fail
to identify any "additional risks" from ingestion of r esidues of the six hormones at levels that comply
with international standards, they fail to demons trate that existing international standards are not
capable of achieving the EC's appropriate level of protection. The EC measure is therefore also
inconsistent with Article 3.3.
(b) "Risk management" under the SPS Agreement
4.241 The EC asserts that the risk assessment required by the SPS Agreement is "wider in scope"
than risk assessment techniques developed by intern ational organizations, that the latter is simply a
scientific process, and that the former takes other factors into account at the "risk management" phase.
The EC then submits that the three SCVPH opinions constitute a risk assessment only in the narrow
sense, and argues that the "wider" risk assessment includes the process of weighing policy alternatives
and selecting appropriate control options. This distinction between "ris k management" and "risk
assessment" is problematic for several reasons.
4.242 First, it finds no support in the SPS Agreement or WTO jurisprudence. The EC suggests that
the Appellate Body findings in EC – Hormones mean that any element of what could be called "risk
management" is part of a "wider" risk assessment. However, the findings cited only mean that certain
factors cannot be excluded a priori. Based on its misreading of the findings , the EC makes the same
error as the panel in EC – Hormones. Whereas the panel in that case erred in excluding certain factors
from the risk assessment on the basis of its distinc tion, the EC now asks this Panel to include all
factors in the risk assessment. This is an erroneous interpretation.
4.243 Second, the EC does not identify the "regulatory authority" responsible for "risk
management", which policy alternatives it weighed and whether there is any documentation in support
of this evaluation. It simply asserts that its authorities decided that hormones create an "avoidable
risk". The EC has therefore not complied with the Panel's request for documentation and supporting
information, suggesting instead that the mandate of the Panel is limited to reviewing the narrower,

risk assessment could be conducted without any empi rical evidence related to dose-response. An
evaluation of the potential occurrence of adverse e ffects would seem nearly impossible without some
idea of the dose of a substance required to provoke an adverse effect. A qualitative assessment is not
simply a licence to substitute speculation and hypotheses for objective scientific analysis.
4.250 The SCVPH also failed to conduct an exposure assess ment, yet the lack of data on residues in
meat does not prevent it from drawing definitive conc lusions about the risks arising from exposure to
hormone residues from treated meat. The EC argues instead that its risk assessment was not required
to conduct an exposure assessment in the light of the EC's decision to allow "zero additional risk".
Since the EC has identified that hormones in genera l have adverse effects, and since consuming meat
from treated animals presumably leads to higher in takes of hormone residues, consuming meat from
treated animals must generate "additive risks", which according to the EC is all that is required. The
EC does not demonstrate that hormone residues from meat from treated animals on their own create
risks, nor does it identify the risks to which these hormones are said to be "additive".
(ii) The genotoxicity findings of the risk assessment
4.251 On the basis of the SCVPH's conclusion that oestradiol-17 β is genotoxic, the EC rejects other
international scientific bodies' findings, ignores curre nt international standards, discounts traditional
risk assessment techniques, characterizes hazards without assessing dose-response data, dismisses
traditional scientific understanding about the bioavailability of oestradiol-17 β, refuses to establish a
dose-threshold level, and declares irrelevant the fact that growth promotants are used in low doses in
animals. However, the SCVPH conclusion on the genotoxicity of oestradiol-17 β is not supported by
the evidence.
4.252 First, the SCVPH acknowledges that its conclu sion that one single reactive metabolite of
oestradiol-17β can damage DNA and lead to tumour initiati on is simply a hypothesis. Its conclusion
disregards established evidence that bodily mechanisms exist to control the formation of potentially
genotoxic metabolites in vivo and to eliminate DNA adducts. Considering the SCVPH's
acknowledgement that it has no "data on the genotoxic effects of exogenous low-dose oestrogens", its
genotoxicity conclusion amounts to merely the identification of theoretical risk.
4.253 Second, other scientific and regulatory authorities have all indicated that the SCVPH's
genotoxicity conclusion is more theory than rea lity. While acknowledging the "genotoxic potential"
of oestradiol-17 β, JECFA found this would not occur in vivo at physiological concentrations. The
CVMP and the Veterinary Products Committee bot h concluded that there is no evidence that
oestradiol-17β is genotoxic. In 2005, The Veterinary Products Committee agreed that oestradiol-17 β
may have genotoxic potential in theory, but found th at there was a "threshold for carcinogenicity".
The Australian Department of Health and Ag eing found that even though oestradiol-17 β may have
genotoxic potential there is " no evidence that these occur in vivo at levels that would outstrip normal
DNA repair mechanisms."
4.254 Third, the EC does not appear to believe that oestradiol-17 β is genotoxic. Despite the EC's
decision not to allow exposure to even one molecule of oestradiol-17 β from meat from treated
animals, it is strikingly silent on potential ri sks arising from all other sources of oestradiol-17 β. The
EC defence of zootechnical and therapeutic uses of oestradiol-17 β is a response one would expect to
dose-dependent adverse effects. The one single molecule from meat derived from treated animals that
the EC considers so dangerous is suddenly not at all dangerous when consumed from meat from
animals treated for other purposes. The risk of adverse effects from the genotoxicity of oestradiol-17β
residues in meat from treated animals is more "t heoretical uncertainty" than real-world risk.
Theoretical uncertainty is not the kind of risk to be evaluated in a risk assessment, and the EC's
genotoxicity conclusions cannot be used to warrant its measure.

(iii) The risk assessment is not "sufficiently specific"
4.255 The SCVPH opinions do not assess the specific ri sks associated with hormone residues in
meat derived from treated animals, claiming th at general evidence of hormone metabolites'
genotoxicity renders specific evidence of residue genotoxicity unnecessary. Not only is there no
convincing evidence of genotoxicity, but the specificity requirements in EC – Hormones cannot be so
summarily disregarded. Even if the SCVPH's hypo thesis is accepted, the SCVPH must confirm that a
single reactive metabolite will actually result fro m low doses received from meat from treated
animals. Instead, the EC's studies fail to find evidence of such metabolites.
4.256 The EC defends the SCVPH's failure to evaluate the dose of residues from meat from treated
animals by stating that low dose is not relevant, and by asserting that the SCVPH did "take into
account" the dose. However, it provides only the SCVPH's estimates of how much residue of
oestradiol-17β will be consumed through animal tissues, without assessment of whether these residues
create any specific risks. The SCVPH's assessmen t of hormone exposure from treated animals is
therefore mere speculation about what these specific risks might be.
4.257 The EC further argues that it is necessary only "in principle" to assess the specific risk, that
there are "important qualifications" to this obligat ion, that it cannot assess the specific risk due to the
difficulty in estimating intake of residues from me at, and that it cannot estimate intake due to the
variability of consumer exposure patterns and the lack of information about good veterinary practices.
Not daunted by the absence of this evidence, the EC concludes by sp eculating that the only rationale
that can be inferred from the available scientific data is that the higher the exposure to residues from
these hormones, the greater the risk is likely to be.
(iv) Adverse effects from misuse and misplaced hormone implants
4.258 The EC disagrees with international standards, citing concerns about the difficulty in ensuring
they are administered according to good veterinary practice. It has not provided a risk assessment
evaluating the existence and level of risk arising from the potential for failure to comply with such
practice. Instead, it refers to studies which purport edly formed the basis of the SCVPH's conclusions
that implants are misused or misplaced "frequently" or "in daily routine", although such studies
merely involve "experiments" addressing whether consumers would be exposed to higher doses of
residues if hormone implants were misused. They address neither the actual occurrence of misuse,
nor whether misuse would increase the potential occurre nce of adverse effects. They also indicate
that under misuse conditions, intake of hormone r esidues remains well below established ADIs. The
EC only speculates that abuse leads to an increase in the potential o ccurrence of adverse effects. A
risk assessment cannot be based on speculation about theoretical risks, but must address risks in the
real world.
(d) The provisional ban is inconsistent with Article 5.7 of the SPS Agreement
(i) Article 5.7 is not a "special regime"
4.259 The EC's claim that Article 5.7 is a "special regime in relation to Article 5.1 of the
SPS Agreement " and that it is for the party alleging a violation of Article 5.7 to make a prima facie
case of non-compliance is without merit. The Appellate Body has found that the party that wishes to
rely on the exception of Article 5.7 has the burden of showing that it has met its conditions.
4.260 Article 5.1 is a specific application of the b asic obligation contained in Article 2.2 of the
SPS Agreement not to maintain SPS measures without sufficient scientific evidence. A WTO
Member adopting an SPS measure that results in a higher level of protection than would be achieved
through a measure based on the relevant internati onal standards must satisfy the requirements of

Article 5.1. Where a measure is not based on a risk assessment, a Member may justify its measure
under Article 5.7 of the SPS Agreement on the basis that insufficient scientific evidence exists to
perform an adequate risk assessment.
4.261 The recommendations and rulings of the DSB requi re that the EC base its measure on a risk
assessment in accordance with the requirements of Article 5.1 of the SPS Agreement. The EC cannot
circumvent this obligation by characterizing its meas ure with regard to five of the hormones at issue
as "provisional" and then claiming that this "provision al" measure is subject, not to Article 5.1, but to
the "special regime" of Article 5.7, which is "not covered by the rulings and recommendations of the
DSB". Given that the EC has invoked Article 5.7 to justify its non-compliance with Article 5.1, it
must bear the burden of demonstrating that the requirements of Article 5.7 have been fulfilled.
(ii) The relevant scientific evidence
4.262 The four requirements of Article 5.7 are cumula tive in nature. The first one functions as a
threshold requirement because Members may only adopt provisional measures "[i]n cases where
relevant scientific evidence is insufficient".
4.263 To date, none of the reasons given by the EC explains in a convincing manner why the
relevant scientific evidence is "insufficient" to allow the performance of an adequate assessment of
risk. The EC takes issue with the risk assessments conducted by JECFA on the safety of the five
hormones when used according to good veterinary pr actices because it alleges that it could not review
the "basic information and raw data" underlying JE CFA's conclusions. However, the majority of
these data is in the public domain. Although the EC co mplains that Canada did not provide it with the
scientific studies and data underlying its decision to authorize the use of these five hormones, Canada
provided the EC with the full names and addresses of each of the firms with proprietary rights to the
information the EC had requested. To date, the EC has provided no confirmation that it has contacted
these firms.
4.264 The EC also takes issue with JECFA's conclusi ons as to the safety of the five hormones when
used in accordance with good veterinary practice, by asserting that JECFA's recommendations could
not achieve the level of health protection considered appropriate by the EC. The EC seems to suggest
that it has conditioned its ability to conduct a ri sk assessment on these five hormones on whether the
available scientific data from JECFA and other sources meet its appropriate level of protection. There
is no basis for this approach in the text of the SPS Agreement or WTO jurisprudence. The EC
confuses the notion of the insuffici ency of the relevant scientific evidence with a WTO Member's
right to establish its own appropriate level of protection.
4.265 The ability to conduct a risk assessment cannot hinge on a Member's appropriate level of
protection. Such an approach undermines the basic logic of the SPS Agreement. The EC's approach
would allow Members arbitrarily to set their level of protection so high that they could effectively
exclude from the pool of relevant scientific evid ence any evidence that does not meet their chosen
level of protection.
4.266 The Appellate Body has confirmed that Article 5.7 is intended to address "situations where
little, or no, reliable evidence [is] available on the subject matter at issue". The EC has not
demonstrated why it considers that the vast body of relevant scientific evidence on the safety of these
five hormones from reputable sources such as JECFA and Codex have yielded unreliable scientific
evidence. The EC also suggests that the simple passage of time is sufficient to invalidate previously-
held scientific opinions but it does not provide any reasons why the JECFA studies or the Codex
Standards should now be considered to be unreliable.

4.267 The EC has misconstrued its obligations under the SPS Agreement and has failed to establish
that there is insufficient scien tific evidence to conduct a risk assessment on the five hormones
concerned.
(iii) Available pertinent information
4.268 Under the second requirement of Article 5.7 of the SPS Agreement, Members may only
provisionally adopt SPS measures "on the basis of available pertinent information, including that from
relevant international organizati ons as well as from sanitary or phytosanitary measures applied by
other Members".
4.269 The EC has acknowledged that the risk asse ssments conducted by JECFA concerning the
safety of these five hormones constitute "available pe rtinent information" that must be taken into
account by the EC. The EC recognizes that there must be an "objective relationship" between the SPS
measure at issue and the available pertinent informati on. However, the EC fails adequately to explain
why it is imposing a "provisional" ban in the face of the safety assessments by JECFA and
international standards adopted by Codex that attest to the safety of these substances.
4.270 The EC asserts erroneously that a Member may disregard the results of the risk assessments
performed by the relevant international organiza tions because the Member concerned requires more
information in order to meet a higher level of protection. This assertion stems from the EC's
propensity to use its chosen level of protection to avoid its obligations under Article 5.7 of the
SPS Agreement. This Article applies in cases where no ri sk assessment can be performed due to the
lack of relevant scientific evidence. Therefore, the EC cannot claim that this provision entitles it to
disregard scientific evidence from relevant intern ational organizations on the basis that the EC
requires "more information" in order to meet a higher level of protection.
4.271 Thus, the EC has failed to demonstrate that ther e is a rational relationship between its ban on
the five hormones in question and the available pe rtinent information from JECFA, Codex and other
sources.
(iv) Additional information and review
4.272 Pursuant to the third and fourth requirements of Article 5.7, a Member may not maintain a
provisional measure unless it: (1) seeks to obtain th e additional information necessary for a more
objective assessment of risk and (2) reviews its measure based on this new information within a
reasonable period of time. Thus, Article 5.7 impo ses a burden on Members to make active efforts to
gather the additional information necessary for th e performance of a full risk assessment and then
review the appropriateness of their measure within a reasonable period of time.
4.273 While the length of the reasonable period of time to review a provisional SPS measures may
vary from case to case depending on the difficu lty in obtaining additional information and the
characteristics of the SPS measure at issue, Cana da disagrees with the EC's suggestion that a
Member's domestic legislative procedures may have an impact on the determination of the reasonable
period of time.
4.274 It is a well-established rule of customary inte rnational law that internal law may not be
invoked as justification for the failure to perform a treaty obligation. Accordingly, the length of the
EC's domestic legislative process should not be a factor considered in the establishment of the
reasonable period of time to review a provisiona l SPS measure. In cases where a Member imposes a
total import ban, the reasonable period of time to review the measure should be such as to minimize
the extent of the trade impact of this measure.

4.275 The EC has provided no explanation as to if and how it is seeking any additional information
concerning the safety of these hormone s and how it has reviewed its measure accordingly in the two
years since the adoption of its new directive.
4. Conclusion
4.276 For the reasons stated in Canada's rebuttal subm ission and those contained in Canada's earlier
submissions, Canada respectfully requests that the Panel reject the EC's claims.
I. ORAL STATEMENT OF THE EUROPEAN COMMUNI TIES ON EXPERTS OPINIONS DURING THE
SECOND SUBSTANTIVE MEETING
4.277 There are certain "procedural" aspects to th is expert meeting which the European
Communities would like to comment on before turning to the substantive results of this meeting. As
you are well aware, the European Communities, during the selection process last year, had objected to
the selection of Drs. Boobis and Boisseau as experts to this Panel. This mainly, because both have
been involved in drafting and adopting the very same risk assessment s which the European
Communities has not accepted as valid basis for its me asures regarding hormone treated beef, that is
JECFA's risk assessments. The European Commun ities' concern was that Drs. Boobis and Boisseau
would lack the objectivity required to give the Panel the advice needed to make an objective
assessment of the facts in this dispute. Last week 's meeting has confirmed that this concern was more
than justified. It is unavoidable what Drs. Boobis and Boisseau have done, namely to defend the
conclusions of the risk assessment they were invol ved in against any alternative conclusions which
the EC's risk assessment has come to. We do not blame them for doing so. However, we do believe
that their obvious partiality was not only unacceptable for the purpose of the role of experts in this
dispute, it also made it necessary, at times, to enter into technical scientific discussions that we would
probably all have rather avoided.
4.278 The European Communities does not wish to discr edit in general the work which is done by
JECFA and Codex, nor does it believe that these latter would wish to put into question in any way the
EC's sovereign choices on the desired level of hea lth protection. This is not a case "EC against
JECFA". This is a case between Members of the WTO and it currently turns on the question whether
a WTO Member has legitimately relied on its right under the SPS Agreement to base its measures on
its own assessment of scientific evidence and ava ilable pertinent information, assessment which may
deviate from that performed (but not necessarily adop ted) by an international standard setting body.
Objective expert advice of the kind that came from Drs. Guttenplan, Cogliano, Sippell and De
Brabander, can explain what the scientific positions on eith er side are. It is not helpful, therefore, to
have had (not only one but even tw o) scientific experts at this m eeting who considered themselves to
be representatives of JECFA.
4.279 It is not helpful either to have had JECFA representatives at this meeting who considered
themselves to be scientific experts. Both Dr. Tritsch er's and Dr. Wennberg 's role would have been to
provide, in their capacity as secretaries to JECFA, factual information on how JECFA works, the way
Dr. Miyagishima did for Codex. Instead, both have repeatedly overstepped their role and ventured
into statements on the substance of the scientific i ssues. Although we are, for example, quite grateful
for Dr. Tritscher's indiscretion on the origin of JECFA's reference to "potential genotoxicity" (she
stated that it was because JECFA felt there was scie ntific uncertainty), we do not think that it was
appropriate for her to provide information on the su bstance of the science or to assume the role of
defending the substance of JECFA's work. And we certainly feel that Dr. Wennberg would have done
better not to intervene on the issue of residue da ta used in the 1999 evaluation (on which she was
obviously not informed) or to keep her opinion, for example on Radio Immuno Assays, to herself.

4.280 Let me end my comments on the procedural aspect s of this expert meeting here by inviting
the Panel to take them into account when it assesses all the different advice it has been given at this
meeting.
4.281 I will now turn to the substantive results of this meeting and place them in the legal context.
For the sake of this discussion, the European Communities accepts for a mo ment the assumption that
your task in this dispute is indeed to assess whethe r measures taken to comply with DSB rulings and
recommendations are consistent or not with Articles 5.1 and 5.7 of the SPS Agreement. However, we
will come back to this at a later stage.
4.282 The United States and Canada claim that the Eu ropean Communities has violated Article 5.1
of the SPS Agreement in re-adopting its ban on oestradiol-17 β for growth promotion purposes. (I'll
open a parenthesis here: this is not quite the way th ey put it as they believe the burden of proof is on
the EC to demonstrate compliance. However, the EC strongly rejects this point, and I will also come
back to that later. Fact is that they have raised a number of arguments as to why the EC allegedly
violated Articles 5.1 and also 5.7 and therefore is not in compliance).
4.283 They argue essentially on two levels. First, that there is no risk assessment, supposedly
because the EC Opinions of 1999, 2000 and 2002 fa iled to perform the second and third of the four
steps usually done in a risk assessment on subs tances of this kind by the members of Codex
Alimentarius Commission. Second, that the evidence put forward by the EC allegedly does not
support the ban.
4.284 Last week's expert meeting has yielded a wealth of information which is crucial to dealing
with these two levels of argument. Rather than repeating all the legal arguments as set out in our
submissions, I will concentrate on where the scientific advice you got helps to clarify the issues.
4.285 On the first level of argument, we learned from the rather unisono statements of the experts.
We have learned that while everyo ne (including the European Comm unities) accepts that in a risk
assessment you may proceed in the four steps of hazard identification, hazard characterization,
exposure assessment and risk characterization, you onl y do that to the extent possible and necessary.
In other words, how you proceed exactly is a functi on of the data you have av ailable and of how your
risk assessment is framed, namely by the mandate you have received from the risk manager. Thus,
we learned from Drs. Boobis and Cogliano that data are never complete, but are or are not sufficient
for the purpose of completing a risk assessment. We learned that this is a matter of judgment
involving considerations on what sort of possible ga p/uncertainty/insufficiency we are dealing with
and whether that can be dealt with through interp retation or bridging tools such as safety factors and
assumptions, or not. Most importantly, however, we learned that this judgment is informed – indeed,
is framed – by the risk manager. It is the risk manager, as Dr. Miyagishima pointed out, who decides
whether or not to carry out an evaluation and who factors into that decisi on the question of whether
there are sufficient data. I draw your attention in th is context to paragraph 19 of the Codex draft Risk
Analysis Principles for the CCRVDF, which are about to be adopted. Paragraph 19 specifies that it is
for the CCRVDF to provide "a qualitative prelimin ary risk profile as well as specific guidance [to
JECFA] on the CCRVDF risk assessment request."
4.286
Finally, it is the risk manager, as several e xperts repeatedly confirmed, who decides on the
acceptable level of risk, in other words on the level of protection. This informs for example concepts
such as that of "appreciable risk", as Dr. Guttenplan explained in reply to your question. Let us not go
into the whole concept of risk communication, but it is important for you to understand that risk
assessors and risk managers – as two different instances of a risk analysis process – do not make
decisions in isolation from each other. This has al ready been confirmed by the Appellate Body in the
1998 Hormones report.

4.287 This brings us back to the famous four st eps of the risk assessment. If there is a risk
management decision that the intended acceptable level of risk is "additional risk to the extent such a
risk is judged ‘insignificant' or ‘non appreciable,'" here is what you do as a risk assessor: once you
have identified that there is the possibility of an adverse effect, you go on and calculate whether and at
what threshold the risk becomes "non appreciable" using safety factors and whatever other tools you
have available to bridge possible gaps of knowledge. This is what JECFA has done.
4.288 If, on the other hand, there is a risk management decision that the intended acceptable level of
risk is "no additional risk," the situation is diffe rent: as a risk assessor, once you have identified the
possibility of an adverse effect and the possibility of its occurrence in real life, there is no point in
going on and calculating a threshold, as no additiona l risk, however minimal, would be accepted. As
a risk assessor you have done enough for the purposes of the risk assessment that the risk manager has
asked from you. Essentially (I am saying essentia lly because the European Communities, as even
Dr. Boobis had to confirm, has actually quantified exposure to the extent possible) this is what the EC
risk assessors have done. Your e xperts have confirmed this, not least Dr. Boobis, who first advised
you that the European Communities had not carried out a proper risk assessment and then qualified
his reply by stating that it was based on the assumpti on that a threshold would apply. Where this is
not the case, so he explained last week and in hi s written replies to Questions 11, 19 and 37, the
remaining steps after hazard identification look quite different. In particular, a dose response
assessment is unnecessary (see in particular reply to Question 37). However, as to what exactly the
remaining steps are supposed to look like in a non-threshold scenario, neither Dr. Boobis nor the other
experts gave you clear advice on that question. Y ou heard statements that the European Communities
failed to present new residue data or failed to refer to the problem of endocrine effects in its risk
assessment or failed to present evidence on in vivo genotoxicity, all of which the European
Communities proved to be wrong by pointing the Pa nel to the exact page where this issue was
discussed or a study was referred to in the EC Op inions. Frankly, Chairman, one might choose to
disagree with the conclusions the EC has come to, but to claim that the EC has not carried out a
proper risk assessment is a bit of a joke, obvious to anyone who has actually taken pains to read the
EC risk assessments (and, if I may add, to compare them to other relevant risk assessments).
4.289 So let me turn to the second level of argument, which turns on whether the evidence presented
by the European Communities supports – or, as the Appellate Body would put it – sufficiently
warrants a prohibition on oestradiol-17 β. Chairman, I could go back to the details of all the adverse
effects that the EC risk assessment h as identified and that were at least in part discussed at last week's
meeting. I could now launch into discussing everyt hing that was said about old and new residue data,
old and new detection methods, good veterinary practice and abuse, hormonal development of
children and the value of epidemiological studies. But I think there is probably no better way of
putting in a nutshell the controversy at the heart of this debate than the way Dr. Cogliano has done it.
He said essentially "at the heart of the scientific disagreement here is the interpretation of data.
JECFA's assessment felt that a threshold could be assumed even if there was some evidence on
genotoxicity. Therefore they assumed there was a thres hold. It seems to me that the EC is unwilling
to assume a threshold, because of genotoxicity and b ecause of low dose response and the fact that the
shape of the curve cannot be defined with certainty . Those are the scientific arguments on both sides
– depending on how you phrase the question, you will get a response of yes or no." On the question,
of whether this disagreement is arbitrary or unreasona ble, Dr. Cogliano answered by stating that "this
is a longstanding area of disagreement for scientists since many years, the reason for the controversy
being the assumptions that scientists bring to the risk assessment. It is an area of legitimate
disagreement."
4.290 Even Dr. Boobis, who may have wanted to make you believe that JECFA's – that is: his –
interpretation of the data is the only reasonable inte rpretation, had to concede that both genotoxicity
and low dose response are issues that are a long way from being resolved. What better way to
demonstrate this than the vivid debate betw een Dr. Guttenplan and Dr. Boobis on proof of in vivo

genotoxicity? What better way to say it than Dr. Bo obis' reply to the EC expert's intervention on low
dose response, when he stated "this is a major issue of scientific controversy. Dr. Vom Saal can point
to so many papers which support his argument, but currently this is not resolved in the scientific
community."
4.291 I could add to this now an account of the many things that were said last week about pre-
pubertal children, where the advice you received from the Panel's experts ranges all the way from
warning you not to feed your children broccoli (Dr. De Brabander) to stating that there is no problem
whatsoever for hormonal substances despite eviden ce demonstrating that JECFA's calculations on
endogenous production of hormones are actually wrong (Dr. Boobis).
4.292 But the point can already be made: what you should take away from last week's meeting is the
following: First, the European Communities bases itself on evidence wh ich well respected scientists,
including some of your own experts (Drs. Guttenpl an and Cogliano) understand to demonstrate direct
genotoxicity of oestradiol-17β. Direct genotoxicity, not only for the EC risk manager but actually for
most risk managers in this world (see Dr. Boobis' reply to Question 11) is a reason not to accept any
added risk and therefore to decline setting a thr eshold. Second, the European Communities bases
itself on evidence which is read by respected scien tists – and, apart from Drs. Cogliano and Sippell
this may well include most endocrinologists in the world – to mean that one actually knows precious
little about what hormonal substances do at low doses, and in particular, what they do to especially
sensitive populations such as pre-pubertal children. For the EC risk manager, and this may well be a
position not shared by the risk mana gers in the US and Canada, this is a reason to decline setting any
threshold.
4.293 The European Communities considers that it is not for this Panel to enter into the deep
scientific theories and try to resolve the scientific controversies, to which you have become witnesses
last week. The scientists have not managed to resolve it and you will not be able to do it with the legal
provisions and tools you are supposed to apply here. Indeed, you are not asked to now come down on
either side of the debate, apply your own – as Dr. Boobis would put it – "weight of evidence"
approach, provide your own interpretation of how the data should be read. It is sufficient for you to
ascertain that there is a genuine divergence of sci entific opinions here, which may indeed – as the
Appellate Body has put it – "indicat e a state of scientific uncertainty"
19 and that the European
Communities has relied on – and I quote the Appe llate Body again – "divergent opinion[s] coming
from qualified and respected sources" 20 as your own experts have confirmed. The US and Canada
may think that this source may not (yet) represent "mainstream" scientific opinion (although one may
well argue that there is at least equal balance betw een the different opinions) but this, as the Appellate
Body teaches us, "does not necessarily indicate th e absence of a reasonable relationship between the
SPS measure and the risk assessment, especially wh ere the risk involved is life-threatening in
character and is perceived to constitute a clear a nd imminent threat to public health and safety." 21
There is no other indication that the European Communities may not have acted in good faith (may
those who cherish protectionist theories go back to reading what the Appellate Body had to say about
that).
22 Therefore, Chairman and Members of the Panel, your conclusion must be that the EC's risk
assessment sufficiently warrants – that is to say reasonably supports – its ban on Oestradiol-17β.
4.294 This concludes my comments on the United States' and Canada's claim that there is a
violation of Article 5.1 of the SPS Agreement as regards the EC's implementation measure on
Oestradiol-17β. I should add that this also deals with the rather vague claim made by the United
States and Canada that there would also be a violation of Article 3.3 of the SPS Agreement. "Vague"

19 Appellate Body Report on EC – Hormones, at para. 194.
20 Ibid.
21 Ibid.
22 Appellate Body Report on EC – Hormones at para. 245.

because it is not clear what they would be relying on with regard to oestradiol-17 β. The standard
adopted by Codex on this substance dates back to 1988 and is outdated, not only in the EC's view but
also in the view of Codex' own scientific comm ittee JECFA, which has re-evaluated the substance
since. However, JECFA's updated assessment of 19 99 has never been adopted as a standard. In any
event, as is clear from the above, the European Co mmunities who has a scientific justification not to
base itself on the Codex standard, and also (not "or") 23 has a higher level of protection than that
implied in the Codex standard, acted c onsistently with Article 5.1. of the SPS Agreement. Therefore,
there is no violation of Article 3.3.
4.295 Let me turn to the European Communities pr ovisional ban on the other five substances,
progesterone, testosterone, zeranol, trenbolone acetate and melengestrol acetate (MGA). With regard
to that measure the United States and Canada claim that there is a violation of Article 5.7 of the SPS
Agreement. I will not go back to all legal arguments that have been exchanged between the parties on
the four conditions that Article 5.7 of the SPS Agreement requires, but will instead concentrate on
what the expert meeting has yielded in this regard, which mainly relates to the issue of sufficiency.
4.296 Obviously, you as the Panel wonder what to make of the fact that an international body such
as Codex and its scientific committee JECFA, with regard at least to four of these substances, has
considered that there is sufficient evidence to come to a conclusion on them, while the EC claims that
this is not the case.
4.297 This brings us back to the debate touc hed upon earlier about completeness of data,
sufficiency, gaps and scientific uncertainty. For all of those among us lawyers who love to think in
clear cut-categories, this is a bit of a disappointme nt. The world of science clearly does not think in
terms of definitive and provisional measures, of suffi ciency and insufficiency of evidence. Data are
never complete, as we learned; whether you can come to definitive conclusions on a risk assessment is
a function of what data you have and how your risk assessment has been framed by the risk manager.
Dr. Boobis, who emphasised several times how care ful he was about choosing his words, certainly
was careful when replying to the question of whethe r it was possible to complete a risk assessment on
the five substances. He agreed with the European Communities th at this was a question of risk
management and then stated: "I can only speak for JECFA, not for th e EC, we considered the data to
be sufficient." Indeed, he speaks for a different set of data and against the background of a different
decision on acceptable level of risk/intended level of protection! The EC's scientific committee
worked on the basis of the most up to date research on these substances and against the background of
the risk manager's decision not to accept any add itional risk from residues in hormone treated-meat.
Under these circumstances, the EC scientific committ ee, in the face of evidence indicating that there
may be risks with regard to genotoxicity and in li ght of the scientific uncer tainty regarding the low-
dose response problem, was careful to conclude only provisionally on the existence of a risk, and to
recommend further research. Who would have prefe rred a bold conclusion based on all sorts of gap-
bridging assumptions, that these substances present a ri sk, and on the basis of that a definitive ban
adopted by the EC regulator?
4.298 This concludes my remarks on the Article 5.7 cl aim, which has been shown to be unfounded.
Let me add a brief remark, once again on the Article 3.3 claim made by the United States and Canada.
The United States and Canada are relying on standa rds for zeranol and trenbolone acetate adopted in
1988, which are as outdated as the standards for prog esterone and testosterone also dating back to
1988. Again, as is clear from the above, the Eur opean Communities who has a scientific justification
not to base itself on the Codex standard, and also a hi gher level of protection than that implied in the
Codex standard, acted consistently with Article 5.7 of the SPS Agreement. Therefore, there is no
violation of Article 3.3.

23 As the Appellate Body has put it so delicately, "Ar ticle 3.3. is evidently not a model of clarity in
drafting and communication", see Appellate Body Report on EC – Hormones, para. 175.

4.299 These remarks of the European Communities attempted to help you place the results of last
week's experts' meeting in the context of your analysis on the relevant provisions of the
SPS Agreement. Before turning to my reservation on that exercise, which I stated in the beginning, let
me make one final remark. It seems fashionable, in the debate on the SPS Agreement, to raise the
spectre of regulators who close off their markets by putting never ending demands for more evidence
on scientists on the basis of a declared need to pr ove safety. There is a danger for abuse of the
SPS Agreement in this respect, no doubt. But there is a nother spectre out there, which is equally
haunting: that the SPS Agreement would be abused by those who value market profit over safety.
That those who do not bother to look into possible hea lth concerns, referring, at best, to industry data
that no member of the public has ever seen, woul d benefit from some sort of presumption of being
right under the SPS Agreement.
4.300 With this, I have ended my opening remarks on the outcome of the expert hearing. Now, with
regard to my earlier reservation: Chairman, we want to raise the question with you, why it is we are
going through this exercise of looking into a violation of the SPS Agreement. As suggested in your e-
mail we will come back to this issue in the sec ond part of our opening statement when we discuss
legal issues.
J. ORAL STATEMENT OF CANADA ON EXPERTS OP INIONS DURING THE SECOND SUBSTANTIVE
MEETING
1. Introduction
4.301 Canada considers that the conclusions to be drawn from the expert meeting are that the ban on
oestradiol-17β is not based on a risk assessment and the evidence is sufficient to conduct a risk
assessment for the other five hormones. Canada und erstands that, in discussi ng the experts' advice,
the parties may not introduce new ev idence into the record and furthe r that any statements made by
the disputing parties' own experts should be vi ewed and assessed as an argument of the party
concerned, rather than as evidence contained in free-standing scientific testimony.
4.302 The experts' advice is particularly pertinent wh ere it addresses the scientific questions that are
within the legal framework of this dispute, na mely, whether the EC's ban on meat from animals
treated with oestradiol-17 β is based on a risk assessment appropriate to the circumstances, and
whether there is sufficient scien tific evidence to conduct a risk assessment for the other five
hormones. The advice from the Experts on these clai ms was that the EC's risk assessment was not
appropriate to the circumstances and that there is sufficient evidence to conduct a risk assessment for
the other five hormones.
4.303 In light of the sensitivities surrounding public health and safety aspects of this case, the
Experts' role was more significant than the legal ques tions imply. It is not the role of the Panel or
even the Experts to pass judgment on the safety of the hormones, but this case also does not consist
entirely of technical legal questions. These hormones have been studied extensively, and the studies
demonstrate that they do not pose any real-world ri sk to human health and safety. Also, science
evolves, methodologies and techniques improve, con ceptions change, appreciation of hazards and
risks in our environment alters, but no credible evidence has brought into question the safety of these
hormones. Further, in the face of scientific uncerta inty, inquiry does not end and public health is not
managed on the basis of anecdotal observations, sp eculation and fear. Finally, risk assessors have
developed rigorous, reliable and recognized ways to handle uncertainties responsibly.
4.304 The importance, therefore, of the contribution of the Experts is that they have collectively
underlined and stressed these simple facts and have firmly deflected the EC's assault on the integrity
of scientific methodologies and techniques that under lie all scientific inquiry and of organizations
such as JECFA and Codex. The EC's claims to th e contrary notwithstanding, even in the absence of

data that cannot be acquired, "with an understanding of biology, you can responsibly conduct a risk
assessment."
2. The EC's risk assessments
4.305 The Experts' advice on the two legal issues was unambiguous. The EC risk assessment is not
a complete risk assessment; it focused on hazard iden tification, some hazard characterization and no
independent exposure assessment. And the evidence is sufficient for the performance of a risk
assessment for the other five hormones. These an swers should be sufficient to complete the
assessment of the legal issues. Any remaining controversies have to do with matters more
foundational and ancillary to these ba sic legal questions. These relate to the nature of the risk
assessment exercise in general and specific issues of the genotoxicity and potential adverse effects on
sensitive populations.
3. The nature of assessing risk
4.306 The Experts raised several issues that are re levant to evaluation of the EC's assessment,
including the nature of risk assessment techniques and the appropriateness of these techniques in these
circumstances.
(a) Hazard versus risk
4.307 Understanding the difference between "hazard" a nd "risk" leads to a better understanding of
approaches to risk assessment and the steps within the kind of risk assessment appropriate in these
circumstances. This understanding also illuminates th e central deficiency of the EC's approach to
these growth-promoting hormones.
4.308 Calling a substance a hazard reveals something a bout its intrinsic properties, its capacity to
cause adverse effects. For example, some substa nces have the intrinsic capacity to cause cancer
because of the way they interact with human cells. The role of IARC, the US Report on Carcinogens
(RoC) and the first step of the four-step risk assess ment technique is to identify and classify such
substances. However, calling a substance a hazar d says nothing about whether adverse effects will
occur in any given scenario involving that subs tance. IARC and the RoC stop after identifying the
hazard and provide no information on the likelihood that any particular exposure to the substance will
lead to cancer. It is the role of other agencies to complete the analysis of risk.
4.309 Risk is not only about whether a substance is cap able of causing adverse effects, but is also
about identifying the likelihood that a given exposur e to a substance will ca use adverse effects.
Whereas the identification of a hazard is a qualitativ e assessment about the intrinsic capacities of a
substance, the evaluation of risk often involves a quantitative evaluation. It is, therefore, not
sufficient for the EC simply to identify these substances as posing a hazard. The EC's risk assessment
must say something about the risks from the specific uses of the hormones as growth promoters.
(b) Risk versus thresholds / dose-response assessments
4.310 There are many substances for which not all expos ure scenarios lead to the quantification of
risk, because there are exposures, known as a threshold, below which there is no risk of adverse
effects. In these cases, identifyi ng a substance as carcinogenic precludes neither further evaluation of
it nor the identification of safe exposure levels. Th e issue is not the quantum of risk, but whether a
given exposure may have adverse effects, which is the role of dose-response assessments. A dose-
response assessment allows one to "characterize a hazard" by revealing the dose required for adverse
effects to occur.

4.311 For substances known to be carcinogenic through a direct genotoxic mode of action it is
assumed that there is no threshold below which no adverse effects will occur, making a dose-response
assessment unnecessary. Ev en in these rare cases, however , risk assessors may conduct a dose-
response assessment because the effects of most mutations are not deleterious. A risk assessor is not
justified in skipping a dose-response assessment fo r substances known to have a threshold. The
Experts believed that in this case a dose-response assessment should have been conducted.
(c) Integrity of the international risk assessment system
4.312 The scientists, regulators and administrators w ho work in the international standard setting
system for veterinary drugs act with professionalism and integrity. The four-step risk assessment
process – hazard identification, hazard characterization, exposure assessment and risk characterization
– is time-tested and universally adopted at the in ternational and national le vels. To question these
methodologies with respect to the evaluation of one substance calls into question the work of risk
assessors everywhere.
4.313 Advanced techniques, such as conservative assump tions, ensure that standards based on them
address global regulatory needs. The basic principle of every risk assessment is to be protective of the
most sensitive sub-populations. This is accomplishe d through the use of the most sensitive adverse
effects in identifying the threshold for adverse effect s, the use of safety factors, and overestimation of
the intake of residues in determining exposure.
4.314 Since science evolves and our understanding of science evolves, the risk assessment process
remains flexible. The fact that new questions can be raised at any time does not stand in the way of
decision-making, but decisions remain subject to review. Members of Codex and JECFA are invited
to submit new data and call for a review of existing standards if they believe that they are no longer
sufficient. Since the Members share responsibility for ensuring that standards are continually updated
to reflect emerging data, the failure of one Memb er to provide new data and seek review of an
existing standard can not be ascribed to the failure of the standard-setting system itself. The EC has
chosen not to avail itself of the review process for these international standards.
(d) Scientific uncertainty, appreciable risk and zero risk
4.315 Because science cannot guarantee with 100% certa inty that a substance will never cause
adverse effects, risk assessments are not expressed in terms of absolute certainty. This is not to
acknowledge that there are risks, but to acknowledge that we can never definitively say that there are
no risks, or that the risk is zero. This uncertainty is reflected in the term "no appreciable risk", which
is not the subjective value judgment of the risk assessor, but simply that unknowable and
unquantifiable residual risk inherent in living. Several Experts expressed this uncertainty in
quantitative terms, not to quantify real risks from ve terinary drugs, but to illustrate just how small
these risks, if any, really are.
4.316 Risk managers who require guarantees of "zero risk" are imposing unreasonable and
unachievable demands. The methodologies do not ex ist to provide those kinds of assurances,
particularly for substances that are endogenously produced in the human body and available from
other dietary sources. Although uncertainty will be present in any scientific inquiry, risk assessors
take that uncertainty into account and, when possibl e, eliminate it. The result is risk guarantees that
leave room for theoretical risk, but not more.

4. Specific scientific issues
4.317 The two most significant scientific conclusions made by the SCVPH were that oestradiol-17 β
is carcinogenic through a genotoxic mode of actio n and that there are potential adverse hormonal
effects for sensitive populations.
(a) Evidence of carcinogenicity through genotoxic mode of action of oestradiol-17β
4.318 The SCVPH declined to conduct a dose-response assessment in any of its three opinions as a
result of its conclusion that oestradiol-17 β was genotoxic in vivo. That conclusion is not justified by
the available data. It is necessary to understand the mechanism – or mode of action – through which a
compound can cause cancer in order to assess the ri sks. Since compounds capable of causing cancer
through a hormonal mode of action exhibit a threshold below which can cer will not occur, the risk of
cancer is dependent on exposure at doses hi gher than the threshold. It is not in dispute that
oestradiol-17β is carcinogenic through a hormonal mode of action, for which there is a threshold. It is
disputed that oestradiol-17β is also carcinogenic through a genotoxic mode of action.
4.319 While there is evidence from in vitro studies that oestradiol-17β has "genotoxic potential", to
conclude that it is carcinogenic through a genotoxic mode of action requires confirmed in vivo
evidence of genotoxicity. This has not been confir med due to the existence of defence mechanisms
such as metabolite inactivation, excretion and an ti-oxidant systems, DNA repair mechanisms and
natural (homeostatic) controls. These mechanisms are redundant and effective because cell damage
occurs quite regularly and naturally in the human body. The "genotoxic potential" of oestradiol-17 β
can be observed in vitro because these mechanisms are unavailable, suppressed or overwhelmed. It is
not observed in vivo due to the existence and correct func tioning of these mechanisms. Studies relied
upon by the EC to demonstrate genotoxicity in vivo simply confirm that, if thresholds for adverse
effects are overwhelmed, there can be dramatic results.
4.320 The Experts confirmed that oestradiol-17 β is not genotoxic in vivo , let alone carcinogenic
through a genotoxic mode of action, and the EC provided no evidence whatsoever that oestradiol-17 β
can cause mutations leading to cancer. It is also not just an issue of judging one scientist's opinion
over another, but that the EC's studies are simp ly not credible enough to support any other
interpretation on the weight of all the evidence. The carcinogenicity of oestradiol-17 β is therefore
considered to be subject to a threshold. Since the SCVPH made an erroneous interpretation of the
evidence related to thresholds for oestradiol-17 β, it was wrong not to conduct a dose-response
assessment.
(b) Potential adverse hormonal effects for sensitive populations
4.321 The Experts also advised on the potential for adverse hormonal effects, particularly in
prepubertal children. They pointed to homeosta tic control mechanisms that adjust endogenous
production of hormones in response to exogenous ex posure and advised that exogenous hormones are
indistinguishable from endogenous hormones. While these controls may not be 100% effective, the
assessment of risk must take them into account. Th e Experts also advised that the bioavailability of a
substance is important and that it can be substantia lly less than what is orally ingested. While there
was speculation that hormones may be more bioava ilable in children than in adults, there is no
evidence for this.
4.322 Some Experts considered that there is no dir ect evidence of adverse effects on prepubertal
children from exposure to hormones from treated m eat. Others did not contest this conclusion but
claimed it had not been properly investigated. The "indirect evidence" cited, such as epidemiological
studies related to puberty, simply does not impli cate hormone growth promoter residues due to the
problems of "confounding" factors. The EC had no explanation as to why, if minute increases in

hormones have such significant effects, prepube rtal children do not suffer adverse effects from
consuming eggs, meat and milk. The explanati on provided by others is that metabolic and
homeostatic control systems are functioning as they were designed and no adverse effects occur.
4.323 There are also questions about claims that exposure to low doses of oestradiol-17 β in utero
carries a risk of breast cancer in adult life. In light of the high amount of oestradiol-17 β produced
daily by pregnant women and the low amount consumed from treated meat, the dose of oestradiol-17β
to which the fetus is exposed is hardly low, and any incremental exposure from growth promoter
residues is about as negligible as one can get.
4.324 The SCVPH also did not evaluate the potential for endocrine disruption in prepubertal
children, but limited itself to an exposure assessment. It relied on data derived from an analytical
method that has not been validated, one that has r esulted in inconsistent estimates. It made dubious
assumptions about bioavailability in children. In the end, it failed to evaluate potential adverse effects
by not performing a dose-response assessment. Inst ead, it presumed adverse effects from exposure to
hormones and speculated about the ratio of daily pr oduction in prepubertal children to exposure from
treated meat. However, one cannot adequate ly assess risks without assessing exposure from normal
food consumption. At least one Expert indicated that based on consensus levels of hormones in
children JECFA's ADI would still be protective of sensitive populations.
5. Issues related to good veterinary practice
4.325 There was little discussion at the Experts mee ting of issues relating to compliance with good
veterinary practice, but a few points can be highlight ed. First, the Experts clarified that mechanisms
exist for testing meat and meat products to dete rmine compliance with established MRLs. Second,
since analytical methods for detecting residues n eed only be sufficient to identify whether residues
exceed established MRLs, the availability of new a nd more sophisticated analytical methods for
detecting residues is largely irrelevant when ther e is an established MRL with a validated detection
method. Third, there are no new residue data, no reason to believe the residue data relied upon by
JECFA are insufficient, and no reason for existing residue data to be recalculated simply because new
methods have been developed. Finally, Dr. de Br abander's written statement that no control measure
short of a complete ban can adequately protect against misuse and abuse is of questionable
applicability to Canada in light of his admission that he has no knowledge of control measures in
Canada.
6. Conclusion
4.326 The results of the meeting with the Experts are clear and consistent on the key issues. The
Experts unanimously advised that the EC did not perform a risk assessment consistent with
appropriate methodologies and that scientific evid ence was sufficient to a llow the performance of a
risk assessment for the other five hormones.
K. O
RAL STATEMENT OF THE EUROPEAN COMMUNITI ES ON LEGAL ISSUES DURING THE SECOND
SUBSTANTIVE MEETING
1. Introduction
4.327 The European Communities made a reservation in its statement yesterday when it questioned
the point of going through this exercise of looking at the possible violation of provisions under the
SPS Agreement. I am afraid that we have to postpone our discussion of that issue once again, to the
end of this meeting, as it seems more important at this stage to respond to the Panel's request to clarify
a few issues about the SPS Agreement and its application to the facts of this case. This is without

prejudice to our position on the provisions of the SPS Agreement which, if any, might be invoked
against our measures.
2. Article 5.1 of the SPS Agreement
4.328 Let us start with the main violation found by the Appellate Body in the original EC –
Hormones case, Article 5.1 of the SPS Agreement. The first point to make is that the situation today
is very different from that which confronted the Appellate Body in 1998.
4.329 The Appellate Body had found that the old risk assessment performed by the European
Communities was not specific enough to address r esidues in meat treated with hormonal growth
promoters.
4.330 The optimal way to remedy that would be to establish a quantitative dose response
relationship. However, the scientists last week have agreed (even though we did not need them to tell
us) that this is not possible to perform because the necessary studies would entail, as the 2002 US
Carcinogenesis Report says, conducting studies of long term human exposure and cancer incidence in
very restricted environments which will be able to eliminate with confidence confounding factors in
the initiation and promotion of cancer over a long latent period.
4.331 Visualize the study: a perfect place would seem a prison where you have a sufficient number
of very long term prisoners living in identical conditions, half of whom would eat non-hormone
treated beef and the other would eat hormone treat ed beef. Even under these circumstances, which
can not possibly be more restricted, the results of the study would be rebuttable due to differences in
the past exposure history of those in custody. You may visualize another situation where you have a
sufficient number of newly born children with wh om you perform a similar experiment for about 30
years. Do I need to go on?
4.332 In the absence of such studies we had to follo w an alternative approach which is also
acceptable under the SPS Agreement. Let's review what we ha ve done and some important
knowledge that we have acquired:
4.333 First, we now have sufficient scien tific evidence that oestradiol-17 β is genotoxic. This is not
a theoretical risk, it is not negligible and definitely not "zero", it is a real risk however minimal.
4.334 Second, we have sufficient evidence that e ndogenous production of natural hormones by pre-
pubertal children is by many times less than what was originally thought to be the case.
4.335 Third, most of the scientists have agreed that the dose-response curve cannot be defined with
certainty for low exposure to these substances.
4.336 Fourth, there is sufficient evidence, which is consistent with the observation that already
exposure from background endogenous production can lead to cancer;
4.337 Fifth, we know today that the old data used by the defending parties and JECFA and the
method by which they have been collected, are questionable or no longer valid ( e.g. depletion data
produced with method of analysis not apt to detect metabolites);
4.338 Sixth, there is a sufficient body of evidence i ndicating increased rates of cancer in the US and
Canada which is consistent with the argument th at residues of meat treated with these hormones can
contribute to these higher rates.

4.339 Seventh, we know that under r ealistic conditions of use, good veterinary practice cannot be
respected in the administration of hormones in th e US and Canada and this invalidates the ADIs and
MRLs (as Dr. Boisseau confirmed last week).
4.340 These things we did not know back then in the 1990s, but do know them now. Last week we
have heard that there is a difference of scientific views and of interpretation of data about some of
these issues, but that this difference is not arbitrar y and indeed reflects genuine scientific uncertainty.
In light of this, it is not indispensable that the third step of the risk assessment, the exposure
assessment, is performed in a quantitative manner.
4.341 With these data the European Communiti es has conducted a qualitative dose-response
assessment and has come to the conclusion that r esidues of hormone-treated meat will constitute an
added risk to human health. As the Appellate Body has explained in 1998, risk is not measured in the
laboratories but in the real world where people live and work and die.
4.342 In conclusion on this point, we believe that the European Communities performed a risk
assessment as appropriate to the circumstances and th e very nature of these substances, and therefore
the ban on oestradiol-17β is based thereon – that is: sufficiently warranted by that risk assessment.
4.343 Before turning to some comments on other SPS provisions, I would like to stress the
important point that we have made. A proper risk assessment can come to th e legitimate conclusion
that there are gaps in knowledge. This is expr essly recognized in point 11 of the General Working
Principles for Risk Analysis of Codex Alimentari us Commission. JECFA's risk assessment bridges
all knowledge gaps and scientific uncertainty by assumptions in favor of allowing the use of
hormones in growth promoters.
4.344 It seems that the US and Canada do not accept th at a proper risk assessment can conclude that
there are gaps and scientific uncertainty. For example, the US relies on a contention, at para 56 of its
statement of yesterday, that a risk assessment must fully address the four "mandatory" steps (and it
claims that the European Communities has not done so).
4.345 There is no basis for this. Article 5.1 of the SPS Agreement states that a risk assessment must
be "appropriate to the circumstances" and take into account techniques developed by international
organizations. As the European Communities has so often explained, and the experts have confirmed,
the four steps of the Codex guidelines only need to be taken where possible and necessary. A
qualitative assessment of the exposure of the kind pe rformed by the EC must be acceptable. Our
exposure assessment is not worse than that perform ed by the defending parties and JECFA, because
both are based on assumptions and extrapolations from data on animal experiments to human beings.
4.346 It seems that the US and Canada would like to make it almost impossible for the European
Communities to conduct a risk assessment they would ever accept. If they were to succeed with this
tactic, however, the result would not be more au thorizations but more provisional measures under
Article 5.7 SPS.
3. Article 3.3 of the SPS Agreement
4.347 There has also been mention of Article 3.3 of the SPS Agreement. The argument is not clear
but the European Communities would like to make a couple of important points. First, WTO
Members have a sovereign right to set a higher leve l of protection than reflected in international
standards. Article 3.3 only requires Members to ha ve a scientific justification for their measures
reflecting this higher level of protection, not for the higher level of protection itself.

4.348 Another point that needs to be made is that Article 3 of the SPS Agreement applies to
standards and measures, and does not require Members to accept risk assessments by organizations
such as JECFA. Accordingl y, the fact that JECFA may have made a different risk assessment, which
is outdated by today's standards and reflects a lowe r level of protection is not a basis for holding the
EC risk assessment to be inadequate. In any ev ent, the European Commun ities has shown that its
measure has the necessary scientific justification and aims to achieve a higher level of protection. For
this reason we fail to see the relevance of Article 3 SPS as a basis for the claims of US and Canada in
this case.
4. Article 5.7 of the SPS Agreement
4.349 Similarly, the fact that JECFA could carry ou t risk assessments on the five other hormones, is
not a reason for holding that the European Communities cannot adopt provisional measures based on
Article 5.7 of the SPS Agreement. For JECFA, the information is apparently sufficient to conduct risk
assessments; for the European Communities it is not. Even Dr Boobis agreed (and the US
misrepresents his position at para 35 of its statement yesterday morning).
4.350 The US is also wrong to say (in para 6 of its statement) that the European Communities has
failed to review the provisional bans within a reasonable time. The European Communities is in fact
now conducting such a review once again.
5. Article 5.5 of the SPS Agreement
4.351 There have also been suggestions that the EC ban on oestradiol-17 β (and the provisional
prohibition of the other five hormones) are unreasonable or arbitrary in view of the large amounts of
hormones that human beings are already exposed to fro m many different sources. Here again, we are
not sure what the argument is. We cannot see how compatibility with Article 5.5 SPS is relevant to
this case since no violation of this provision has been invoked by the Defendants. But even if it were,
we would remind you of the interpretation of the Appellate Body of this provision. You cannot
compare natural presence of these substances in a great many products with added risk from hormone-
treated meat.
24
6. Conclusion on the SPS Agreement
4.352 Chairman, Members of the Panel, our re view of the possible relevance of the SPS Agreement
has been somewhat cursory. Our problem is that we do not know what we are accused of. The US
and Canada have not set out their claims in a Panel Request and their arguments criticizing our
measures are varied and wide-ranging. We would be happy to discuss these issues in more detail if
only we would be told exactly what it is we ar e doing wrong, because it is scientifically unsound and
arbitrary.
7. Concluding statement of the European Communities
(a) Introduction
4.353 The European Communities would first of all thank you again for the professionalism and
objectivity with which you have conducted these proceedings. Let me just recall that it was more than
a year ago that we met for the first time to di scuss the main claims of the European Communities
against the US's s and Canada's illegal unilateral de termination of the allege d inconsistency of the
EC's implementing measure and, based thereupon, th eir illegal continuation of the sanctions against
the European Communities.

24 See para.221 of the Appellate Body Report on EC – Hormones.

4.354 The European Communities has explained in detail why in order to resolve these disputes it is
not necessary for you to address the scientific issues re lated to the use of hormones as animal growth
promoters. Chairman, Members of the Panel, you have nevertheless decided to look at these scientific
issues. And we are the first to acknowledge that the scientific debate has not facilitated your life. As
we have learned, the questions related to the use of these hormones are subject to a longstanding
legitimate scientific debate amongst scientists with respected and reasonable arguments on both side.
4.355 However, one bottom line with which probabl y everybody will agree is that these hormones
do not improve your health. These hormones are animal growth promoters but not health promoters.
Instead we discuss scientif ic issues such as genotoxocity, muta genicity, carcinogenesis, DNA repair
mechanism, the risks of early puberty to our child ren, obesity, cancer as well as abuse and misuse of
these hormones. Whatever one may think about th is, it does certainly not increase our appetite for
meat.
4.356 Another bottom line, which can be safely draw n, is that these hormones present a hazard and
potentially a risk. Now, I agree that this is where the controversy starts. But whatever one may think
about it as lawyers or consumers, neither of the scientists nor of the Defendants can reasonably argue
that there is no potential risk related to the u se of these hormones as growth promoters in cattle.
Instead, we have heard a lot of talk about "threshol ds", "appreciable risk" or "acceptable risk". But
whether a risk is appreciable or not, whether a ri sk is acceptable or not, it still remains a risk. And
contrary to what the defending parties have argued yesterday this is not a theoretical risk. No, the risk
is real, however minimal it may be.
4.357 Why should we accept such a risk? Why should we expose our public to an additional risk to
human health? Indeed, Chairman, Members of the Pa nel, we have heard repeatedly that we should
not care about the addition of the natural hormones sin ce they are also present in natural food, such as
broccoli, milk, eggs or butter or produced endogenously. But the question persists why we should add
on top of this an additional burden on the consumer without any health benefit in return. It is true that
we all take risks in life whether we drive with a car, or when we take the plane or if we drink a glass
of milk. However, we take these risks because we al so see the benefit. Driving a car is comfortable,
taking the plane is fast and milk contains a lot of vitamins. Yet, the story is different with hormones
used as growth promoters in cattle. Here the risk is on the consumer. He has to face an additional
health risk by being exposed to higher hormone levels. But he has no additional health benefit. Thus,
from the perspective of a public health regulator, the risk/benefit calculation does not speak in favour
of the use of these hormones either.
4.358 If at all, one may argue that the issue of not allowing hormones as growth promoters in cattle
while we allow our children to drink milk is a matte r of consistency. Howeve r, that would also be a
very superficial view of the issues at stake. As we have explained yesterday and as the Appellate
Body has already decided, one cannot compare thes e two things. On the one hand, we talk about
natural food products that are part of our daily life over centuries and where there is a concrete
risk/benefit for the consumer. On the other hand, th e use of hormones in beef is an unavoidable risk
which does not bring any advantages to public health.
4.359 How can this be better exemplified than by lo oking at our children. Children are the most
sensitive part of the population and we must protec t them wherever we can. There is a lot of
uncertainty about how the mechanism of hormones in these children work but one can be sure that
doubling the oestradiol doses – as would be the case by allowing hormones in beef – will have an
effect. One of your experts, Dr. Sippell, has confirmed this pointing to the examples of early puberty
or obesity. We should take his judgment very serious ly when he drew the conclusion of the scientific
hearing that he is "very concerned". Whatever t oxicologists or veterinarian may have to say we
should take this testimony of a paediatrician very, very seriously.

4.360 This brings me to one last point in this introduction which is about misuse and abuse of
hormones as growth promoters. It is already striking that we always refer to "Good Veterinary
Practices" even though no veterinarian or other traine d health professionals is involved in the use of
these hormones in the United States and Canada. As they are sold freely over the counter to farmers
you will admit that controlling the correct use of these substances is difficult under these
circumstances. It should strike us all that one implant contains the amount of hormones contained to
up to 10,000 carcasses of animals. The Europ ean Communities has assessed what happens if these
implants are misused and, indeed, there exists c oncrete evidence on this in the United States and
Canada.
(b) The scientific debate
4.361 Let me now turn briefly to the outcome of th e scientific debate regarding the use of these
hormones as growth promoters in cattle. The Eur opean Communities is still puzzled by the United
States' and Canada's attempts to present this de bate as if there were only one single monolithic
opinion in the scientific world on the safety of th ese hormones. This serves the US's and Canada's
purpose but it is not objective.
4.362 It is true that we are all sometimes tempte d to provide easy answers to difficult questions.
And, certainly, this natural reflex is made even easier in the face of scientists who are able to "quickly
dismiss" scientific evidence that they have not taken into account in the first place.
4.363 What is important for your decision, however, is to look at the differences and to see whether
these differences are scientifically legitimate. The European Communities has never claimed that its
scientific findings are the only valid ones, unlik e what the United States and Canada have done.
However, what the European Communities has repeatedly insisted upon is that its scientific views and
its risk assessment are appropriate to the circum stances and that they come from respected and
legitimate sources. One may not like the EC' conclusions but one cannot ignore or discredit them
either.
4.364 It also appears sometimes ironic to present the EC' risk assessment in opposition to the
JECFA's assessment. There is no doubt that th e JECFA assessments have been based on outdated
data since despite its assessment in 1999 this does not mean that the data also come from the 90's.
Rather the JECFA representative admitted that they only review data as they receive them and in this
particular case they had only received data from the FDA some of which date back to the 1960s.
Despite the general acknowledgement that science is constantly moving forward and reveals new
evidence this is an astonishing pro cedure itself which, again, we leave to your discretion on how you
take this into account. A second undisputable issu e is that JECFA's (and indeed the United States and
Canada's) approach to risk is different to the one by the European Communities. JECFA has set
thresholds in order to minimize the risk, the Eu ropean Communities has prohibited the use of these
hormones in order to exclude avoidable risks.
4.365 These are two completely different risk manage ment decisions. Both are legitimate and we
are, therefore, not criticizing JECFA for what it has done. However, we also cannot be blamed for
deviating from JECFA's approach. It is ultimately the responsibility of the regulator or risk manager
to decide what level of risk he wants to accept, and as I have indicated earlier, this is a very complex
decision to which no easy answer can be given.
4.366 Let me then turn to our puzzl ement by the United States and Canada's characterization of the
scientific debate. We mentioned already yesterday that they very selectively refer to the scientific
evidence in order to make their case. Chairman, Members of the Panel, we trust that you have a better
recollection of what was actually said.

4.367 Let me just give a few examples. The United Stat es has stated that "the experts agree that the
EC has not presented any scientific evidence that estradiol is genotoxic in vitro or in vivo at
physiological levels". However, may I remind yo u about the lively debate between Dr. Boobis and
Dr. Guttenplan on this particular issue where Dr . Boobis "quickly dismissed" a study that was co-
authored by one of his expert colleagues. Isn't it simply disingenuous to present this debate as if "all
experts agree" that there is no evidence? And I'm not even talking about the experts that have not
expressed an opinion on this issue.
4.368 Another example is the US's statement that "the experts have confirmed that the evidence for
each of the five hormones is sufficient to complete a risk assessment". This is again incorrect. First,
some of the experts have not even expressed a vi ew on this. And even Dr. Boobis, who the United
States often likes to rely on has merely stated that JECFA had enough information for completing a
risk assessment whereas he could not say this for the European Communities. Again, as we have just
explained, we all know the difference in these pe rceptions which is based on the fundamentally
different approach by JECFA and the European Co mmunities on how to deal with risks and whether
or not it is appropriate to set a threshold in light of the possible direct and indirect genotoxcity of these
substances.
4.369 A third and last example is Canada's today's statement that "nothing in what the Experts have
written, nothing in what we have heard from the E xperts (…) or the Experts have said demonstrates
that there is any risk to human health, adult or chil d, old or young, man or woman, boy or girl, arising
out of the correct use of these growth-promoting agen ts in cattle". It suffices to contrast this
simplistic summary by Canada with Dr. Sippell's conclu sion of last week that he is "very concerned"
about the health of children if they were exposed to these hormones in beef. Again, we trust the Panel
Members that they take into account what has actually been said by the scientists in their variety and
not what the United States or Canada make out of it.
4.370 In this context, let me also refer to the closi ng statements by some of the experts during last
week's hearing and which summarizes adequately th e level of differences in the scientific world.
Dr. Guttenplan stated that as regards young girls and boys we have to worry about the developmental
effects of estradiol on them and that hormones sensitive cancer might be increased by raising the level
of oestradiol. Dr. Sippell stated that we do not know enough about children and that the data are
insufficient to be confident that the additional exposure from hormones treated beef poses no risk.
Dr. Cogliano himself referred to the messiness of science and to the split within the scientific
community. He also stated that these issues are not likely to be resolved any time soon. Finally,
Dr. De Brabander even referred to other aspects re lated to the use of hormones as growth promoters
such as animal welfare or environmental concern.
4.371 The European Communities considers that there is a bottom line that one cannot ignore. The
scientific issues on which the European Communities and the United States and Canada disagree are
not arbitrary but they are the result of a legitimat e and genuine disagreement amongst scientists. This
was the main result of the Panel' experts hearing. We do not believe that this Panel is in a position, or
required, to resolve these long-standing scientific i ssues. Instead. we would urge you to acknowledge
the legitimate scientific controversy and to draw th e respective conclusions from it in resolving these
two disputes.
(c) The context of the scientific debate
4.372 With these remarks, let me come back to where we ended last year after our discussion on the
systemic issues under the DSU.
4.373 The European Communities would recall that these two disputes are still not about the
SPS Agreement despite the extensive scientific debate th at has taken place on the public health risk

related to hormones in animal treated beef. Chai rman, Members of the Panel, the panel requests by
the European Communities which pr ovide the legal basis for these two disputes do not refer to any
single provision under the SPS Agreement. Rather, as we discussed extensively last year, the
European Communities has based its case against the illegal continua tion of sanctions by the United
States and Canada on systemic violations of the DSU, in particular Article 23, paragraphs1 and 2(a),
Article 21.5 and Article 22.8.
4.374 As repeatedly stated, in order to resolve th ese disputes it is not necessary for you to make a
substantive finding on the scientific issues. We have already set out that in our view the proper forum
and the right procedural way to deal with these w ould be a compliance Panel under Article 21.5 of the
DSU initiated by the United States or Canada.
4.375 This said, it is true that the European Comm unities has also made an alternative claim which
requires you to address the substantive scientific as pects in order to determine that the original
inconsistent measure has been removed and that the European Communities has addressed all the
rulings and recommendations of the DSB.
4.376 However, this alternative claim has been only made "if, and only if" the Panel were to
disagree with the European Communities on its sy stemic arguments under the DSU. Up until now,
the Panel has not decided that this is the case. Ther efore, the main claims and arguments as set out by
the European Communities in its submissions ar e still valid and you are still called upon to take a
decision.
4.377 Our discussion of the scientific issues may nevertheless be useful in respect of the main
systemic claims made by the European Communities. I would just like to recall that one of the claims
is that the US's and Canada's continued suspension of obligations is in violation of Article 23.1 and
Article 22.8 of the DSU. This is so because by continuing to apply sanctio ns against the European
Communities, the United States and Canada are unilaterally seeking to redress an alleged WTO
inconsistency through the EC compliance measure. Furthermore, as you recall, in view of the
requirements of Article 22.8 of the DSU, the Europe an Communities has explained in great detail that
its implementing measure must be presumed to be WTO-consistent since there is no multilateral
finding to the contrary. This presumption is derive d from the general principle of good faith whereby
WTO Members are presumed to act in conformity with their obligations.
4.378 In this particular context, the European Comm unities considers that the scientific debate fully
supports its proposition of a presumed compliance of its implementing measure. Indeed, since the
scientific evidence demonstrates that the EC complia nce measure is in actual compliance, it follows a
fortiori that the lower standard of presumed compliance is also fulfilled.
4.379 Let me explain this aspect in more detail.
4.380 From the beginning of these two proceedings, th e United States and Canada have tried to
discredit the European Communities' compliance m easure and its scientific foundations. Arguably,
by this criticism the defendants have tried to undermine the European Communities' reliance on the
principle of good faith (or in this case the presump tion of compliance) under Article 22.8 of the DSU.
And one has to admit that this litigation tactic by the United States and Canada was not completely
unsuccessful because you felt the need to address the scientific issues related to the use of these six
hormones as growth promoters in cattle notwithstanding the applicability of the general principle of
good faith.
4.381 However, following the extensive discussion of th e scientific issues, it is clear that this
approach by the United States and Canada is not any longer sustainable. As we have seen last week,
there can be no doubt that there exists a real and actua l risk to public health related to the use of the

six hormones as growth promoters. The European Communities was therefore fully entitled to ban
the use of these hormones in beef. And in legal terms, the European Communities was therefore also
right in invoking the principle of presumed compliance within the context of its systemic claim under
Article 23.1, 22.8 of the DSU.
4.382 The logic of this argument may also be further elucidated when the invocation of good faith is
linked to the issue of burden of proof. The United States and Canada have attempted to make a prima
facie case against the EC compliance measure. Ye t, following the scientific debate the European
Communities has refuted this prima facie case. The burden of proof is therefore still on the United
States and Canada for questioning the European Co mmunities' conclusion that the use of these six
hormones for animal growth promotion is a risk to public health. The United States and Canada have
failed to meet this burden of proof and they could not support their conclusions that the EC's ban on
hormones treated beef was scientifically unsound.
4.383 We would like to recall that the European Communities also made violation claims under
Articles 23 and 21.5 of the DSU that do not depend on the WTO-consistency of the EC's compliance
measure. Rather these claims are directly linked to the US's and Canada's unilateral determination of
the alleged inconsistency of the EC' compliance measure.
4.384 Finally, we have heard again this morning th at the United States maintains that it could not
have possibly made a "determination" that the EC's new ban is in fact WTO-consistent by the time the
EC initiated these proceedings because the European Communities failed to provide all the necessary
materials relevant to its measure.
4.385 This is a rather disingenuous characterization of the real facts and I will, at this stage not
recall all our arguments that we have submitted to you. Let me just first point out that the United
States erroneously keeps referring to a determination of WTO-consistency which it claims it could not
make. The DSU neither requires nor forbids such "consistency determination". What the DSU
prohibits, however, is the unilateral determination of a WTO violation by another Member.
4.386 Let me also recall, that while the United Stat es in its view struggled to come up with a
"determination" as early as from November 2003 they dismissed the EC compliance measure and
explicitly stated in its Trade Policy Review of 2005 that "they failed to see how the revised measure
could be considered to implement the recommendations and rulings of the DSB" . And in addition to
that, since then the United States simply continued to apply its sanctions against the European
Communities. There is no other way than to qualify this behaviour as an illegal determination of non-
compliance. And, finally, it is also simply not tr ue that the United States had been confronted with
the evidence for the first time in 2003. All the unde rlying studies have been peer-reviewed and been
published in journals and the European Communiti es undertook even an effort to discuss with the
United States in Washington the sci entific evidence. All this is on the record. The European
Communities, therefore, cannot express again its pu zzlement by the way the United States represents
the facts in this dispute.
(d) Conclusion
4.387 For all these reasons, the European Communities would ask the Panel to find:
(a) First, that the United States' and Canada 's continued suspension of concessions
against the European Communities was inconsis tent with the provisions referred to
under Part I of the EC's first written submission.

(b) In the alternative, the United States' and Canada's continued suspension of
concessions against the European Communities is inconsistent with the provisions set
out under Part II of the EC's first written submission.
L. ORAL STATEMENT OF CANADA ON LEGAL I SSUES DURING THE SECOND SUBSTANTIVE
MEETING
1. Introduction
4.388 Almost ten years ago, the DSB ruled that the EC ban on Canadian beef treated with growth-
promoting hormones was inconsistent with the SPS Agreement because it was not based on a risk
assessment. After the EC refused to bring itself into compliance, the DSB authorized Canada to
impose retaliatory measures. The EC reaffirmed its ban in 2003, claiming that it was now based on a
risk assessment in respect of one of the hormones and that there was insufficient scientific evidence to
conduct a risk assessment for the other five. The EC launched this dispute, claiming: first, that the
DSB authorization was no longer valid and that Cana da had an obligation to suspend its authorized
retaliatory measures; and, second, that if Canada does not, it has an obligation to bring a compliance
case against the EC. The EC's DSU claims are wrong on the question of process and its alleged
"compliance" with the SPS Agreement is unsupported by evidence and flatly rejected by the experts.
4.389 The EC's argument that Article 21.5 of the DSU provides that a complaining party has a legal
obligation to launch compliance proceedings every ti me there is a "disagreement" as to compliance
should be rejected for its systemic absurdity. The EC argues that, on the sole basis of an assertion of
compliance by the EC, Canada should forego its righ ts under the WTO and launch dispute settlement
proceedings. If the EC were to be found again in violation it could make another unilateral assertion
of compliance and, if its procedural arguments prev ail, force the parties into another dispute. Few
things can be better calibrated to undermine confid ence in WTO dispute settlement than the endless
litigation loop that would result from this.
4.390 The EC's allegation of a breach of Article 22.8 on the basis that its unilateral assertion
overrides the multilateral authorization of the DSB is also plainly wrong. Canada, having acted
consistently with a DSB authorization, may not be f ound to be in violation of Article 22.8 on the sole
basis that the EC has asserted that it has complied. To end the retaliatory measures in light of the
disagreement as to its compliance, the EC must esta blish its compliance multilaterally. It is the EC's
burden, since it seeks to overturn an existing DSB au thorization. This case is therefore not about
procedural lacunae in the DSU, but about the compliance of the EC measure.
4.391 The rest of Canada's submission addresses the legal requirements of the SPS Agreement.
Canada makes the following preliminary observations . First, Canada's reference to exposure to
hormones from other sources does not relate to the regulatory aspects of the "consistency" required by
Article 5.5, but to the "appropriate circumstances" in relation to which the EC's risk assessment is
conducted, pursuant to Article 5.1. The EC's position on the risks from these hormones is either
irresponsible or disingenuous: if the hormones ar e as hazardous as it has claimed, the EC must
conduct an assessment to determine in what doses there are health risks, regardless of how natural the
products are; where it refuses to do so and insists that natural sources can be consumed every day but
residues from treated meat cause adve rse effects, scepticism about the EC's reasoning is warranted.
Second, the EC seems to be saying that even if it loses, its ban will remain in place, justified not by
Article 5.1 but by Article 5.7, because it will clai m there are insufficient data to conduct a risk
assessment. This makes it all the more important for the Panel to make findings about what
constitutes "sufficient evidence", which is different from scientific uncertainty, minority opinion or
speculations based on clinical observations.

2. The EC has not demonstrated that the rele vant international standards are insufficient
to meet its appropriate level of protection
4.392 The EC's measure is not justified under Article 3.3 because existing international standards
are capable of achieving the EC's higher level of protection. While the EC alleges that these standards
are insufficient and wrong, it has provided only unconfirmed evidence, considered within an
artificially constructed level of protection of "zero additional risk".
4.393 Existing international standards have been developed using methodologies so widely accepted
that to call them into question for these hormones calls them into question for other compounds as
well. The EC misrepresents the level of protection in herent in these standards. For example, in light
of other sources of exposure to the three natural ho rmones, standards for these hormones are such that
it is not necessary to determine maximum allowable levels of hormone residue in meat, reflecting the
conclusion that the ADI could never be exceeded simply by consuming treated meat. The EC
considers the concept of "no appreciable risk" to be subjective and qualitative. However, that concept
reflects scientific reluctance to guarantee zero risk in the case of very small, unquantifiable risk.
Since the risk inherent in this concept is the risk from exposure to hormones at the level of the ADI,
which includes exposure from all other sources, the risk from exposure to oestradiol-17 β from treated
meat is only 4% of the risk inherent in that concep t. The level of protection achieved by international
standards is therefore as close to zero as possible and reflects theoretical risk.
4.394 The EC claims that its ban is necessary becau se international standards cannot achieve its
level of protection, which it has set at "zero additional risk" to get around the fact that risk
management methodologies cannot provide for "zero risk ". The EC therefore believes that it need do
no more than establish that exposure to treated m eat increases overall exposure to hormones, and then
assume this automatically increases risk. This is based on incorrect assumptions that adverse effects
will occur at anything close to normal levels of e xposure to hormones and that levels of exposure to
treated meat alter the level of hormones in the body sufficiently to alter the level of risk. However,
since the EC provides no evidence that exposure to hormones from treated animals alters the risk that
might already exist from exposure to other sources of hormones, it has not demonstrated that there are
additional risks.
3. The EC has not demonstrated that its permanent ban on oestradiol-17 β i s b a s e d o n a
risk assessment appropriate to the circumstances
4.395 The EC claims that its reaffirmed ban on oestradiol-17 β is now based on a risk assessment,
but that assessment is not appropriate to the ci rcumstances, does not identify and evaluate the
potential for adverse effects from exposure from tr eated meat, does not demonstrate that exposure
from this source causes cancer and does not demons trate that sensitive populations are at risk from
exposure from this source.
(a) The EC has not demonstrated that existing international risk assessment techniques are
inappropriate to the circumstances
4.396 While the EC does not dispute that the four-s tep risk assessment process is appropriate to
these circumstances, it does make two incorrect claims about the application of these steps in these
circumstances. First, its claim that the SPS Agreement envisages a risk assessment that is "wider in
scope" than the four-step process does not find support in the SPS Agreement. Article 5 addresses risk
assessment techniques and not the separate and define d process of risk management. The EC reliance
on sections of the Appellate Body ruling in EC – Hormones
is also unjustified. There is a parallel
between the four-step process and legal requirements to "identify adverse effects and evaluate the
potential for their occurrence from exposure to hormones from meat from treated animals".

4.397 Second, the real reason the EC seeks to confu se the parameters of an appropriate risk
assessment relates to its claim that the scientific risk assessment was justified in short-circuiting the
process because of instructions from the risk manage rs related to "zero additional risk". A risk
manager is not justified in instructing a risk assessor to skip certain steps of the assessment to serve
risk management objectives. The risk assessment pro cess is a scientific exercise that should arrive at
the same scientific results regardless of the risk management framewo rk within which it is conducted.
The issue is therefore whether the EC's purported risk assessment unjustifiably departed from the
four-step process.
(b) The EC has not demonstrated that the risk assessment on which its measure is based is
appropriate to the circumstances
4.398 The EC measure is based on the three SCVPH opinions. While the EC has also submitted
additional material, it has not attempted to dem onstrate how this material constitutes a risk
assessment. It is therefore the SCVPH opinions that must satisfy the four-step process. The Experts
confirmed that it suffers from two critical flaws. First, the Experts confir med that a dose-response
assessment is a necessary component of a risk assessmen t, without which it is impossible to know the
dose at which adverse effects will occur. In thei r own reviews, JECFA and others conducted dose-
response assessments. Operating under the instru ctions to avoid "additional risk", the SCVPH
declined to conduct such an assessment, concluding that the adverse effects from oestradiol-17 β did
not exhibit a threshold for adverse effects, and as su ch all exposure would lead to "additional risk".
This conclusion is not justified by the scientific evidence.
4.399 Second, the failure to conduct a dose-response assess ment led to the failure to complete a risk
characterization, which corresponds to the requirement to evaluate the potential for the occurrence of
adverse effects. The Experts disagreed w ith the EC that the SCVPH conducted a risk
characterization. Assessment of risk from a substance in general was simply conflated with
assessment of risk from a single source of that substance. After identifying oestradiol-17β as a hazard,
the SCVPH concluded that exposure to it from treated meat poses additional risk. The finding that the
original EC ban was not based on a "sufficiently sp ecific" risk assessment applies equally this time,
and the artificial construct of "zero additional risk " does not save it. The failure to complete these
steps stemmed from mistaken interpretations of the scientific evidence, which the next section
reviews.
(c) There is no evidence that oestradiol-17β is genotoxic in vivo
4.400 The SCVPH concluded that there is no thr eshold for adverse effects from oestradiol-17 β on
the basis of erroneous and scientifically unjustified in terpretations of genotoxicity test results. While
there is no dispute that oestradiol-17 β is carcinogenic through a dose-dependent hormonal mode of
action, and that there is evidence of "genotoxic potential", the SCVPH was wrong to conclude that
oestradiol-17β is carcinogenic through a genotoxic mode of action. It ignored the fact that in vitro test
conditions neutralize effective and redundant defence and repa ir mechanisms, meaning that in vitro
genotoxicity must be confirmed by positive in vivo results. The "weight of evidence" is against
oestradiol-17β being carcinogenic through a genotoxic m ode of action. Other national and
international regulatory bodies, as well as the Expe rts, have indicated this and the SCVPH has no
credible evidence that all these experts are wrong.
4.401 While the EC raises the spectre of "scientific uncertainty" and "minority scientific opinion",
the conclusion that oestradiol-17 β is genotoxic in vivo is not supported by any reasonable
interpretation of the available scientific evidence. For a contrary interpretation of the data to
constitute a credible minority opinion, or for it to re flect "scientific uncertainty", there would need to
be at least some evidence that could not be expl ained by the existing understanding of the issues.

According to the Experts, this is not the case. Any evidence there is that oestradiol-17 β may be
genotoxic can be explained according to common understandings of biological mechanisms.
(d) There is no evidence of adverse effects on the endocrine system
4.402 While the EC cites various revised estimates of blood concentrations of oestradiol-17 β in
prepubertal children, the issue is whether these estim ates tell us anything about the implications of
incremental increases in exposure from one particul ar source for the risk profile of prepubertal
children. The JECFA analysis focuses on determini ng the level at which no adverse hormonal effects
would occur in the most sensitive sub-groups of the population. The SCVPH did not evaluate the
occurrence of potential adverse hormonal effects. It compared intake of oestradiol-17 β from treated
meat with this "new" daily produc tion rate, concluded that the excess intake would exceed the daily
production in prepubertal boys and then implied an increase in risk to prepubertal boys.
4.403 Apart from questions about the validity of the data and the justifiability of the assumptions,
this approach suffers from basic methodological flaw s. Since natural hormones are part of a normal
diet, a risk assessment must take into consider ation background dietary exposure. There is no
evidence that there is no safe threshold for daily consumption of oestradiol-17 β in part because of
homeostatic control mechanisms. The SCVPH failed to consider the question of a threshold for safe
daily intake because it did not conduct a dose-respon se assessment. The fact that background levels
are lower than previously thought says nothing a bout the potential occurren ce of adverse effects.
Thus, as a result of a failure to conduct a dose-res ponse assessment, the SCVPH has failed to evaluate
the potential occurrence of adverse hormonal effects from exposure to hormones.
4. The EC has not, and cannot, demonstrate that there is insufficient evidence to conduct a
risk assessment on the five other hormones
4.404 There are three legal issues concerning the interp retation and application of Article 5.7 in this
dispute. First, the mere existence of scientific uncertainty does not imply th at the scientific evidence
is insufficient to allow the performance of a risk assessment. Techniques have been developed to
address scientific uncertainty in the risk assess ment process and these techniques can be seen in
practical application here.
4.405 Second, the Appellate Body has clarified that "insufficiency" implies a relationship between
scientific evidence and the ability to perform an "adequate" risk assessment. The EC suggestion that a
WTO Member can determine what constitutes "s ufficiency" of scientific evidence through the
selection of its level of protection was already rejected by the panel in EC – Biotech . The advice
sought by this Panel confirmed that the relevant scientific evidence is sufficient for the performance
of a risk assessment. The "new" evidence provided by the EC does not call into question the JECFA
risk assessments and the conclusion that these horm ones are safe when good veterinary practice is
followed.
4.406 Finally, Codex has a procedure whereby any Member can request a re-evaluation of a
substance that has been previously reviewed by JECFA or for which a Codex standard exists. The EC
has deliberately avoided using this procedure, desp ite its insistence that new information casts doubt
on the validity of the Codex standards and JECFA risk assessments. One would expect the EC to
invoke this procedure not only to protect its own citizens but also to protect the citizens of other
countries that rely on Codex standards. Since the EC cannot demonstrate that the relevant scientific
evidence is insufficient to perform a risk assessment on the other five hormones, it has not fulfilled
the first condition of Article 5.7.

5. The EC has not demonstrated that the failu re to follow good veterinary practice results
in increased risk of adverse effects
4.407 The EC's purported assessment of the failure to respect good veterinary practice involves
exaggerated and unrealistic overdosing scenarios and suffers from other flaws. First, despite the EC's
assumption to the contrary, there is no evidence to suggest that there is an economic incentive to
misuse growth-promoting hormones where their use is approved and controlled. The EC's experience
with the abuse of banned hormones is not relevant to Canada where th eir use is permitted. There are
in fact significant economic disincentives to overdose an animal as implants have been calibrated to
provide an optimal dose. Second, even if some misuse occurs, the evidence presented by the EC does
not support the conclusion that the misuse scenarios will lead to residue levels that create potential for
adverse effects to occur.
4.408 Third, the EC has not evaluated whether unrealistic misuse scenarios occur in real life. It has
ignored data from Canada's National Chemical Residue Monitoring Program, and has provided no
evidence that Canadian meat contains hormones at levels exceeding the JECFA ADI. It depicts
successful detection of non-compliance as a failure of controls, and misrepresents non-compliance as
the norm. By ignoring the way in which hormones are actually used and the results of Canada's
official residue monitoring program, the EC has failed to take into account "relevant processes and
production methods" and "relevant inspection, sampling and testing methods" in the conduct of its so-
called risk assessment on misuse and abuse, as required by Article 5.2 of the SPS Agreement. The
EC's risk assessment does not meet the requirements for a risk assessment under the SPS Agreement.
6. Conclusion
4.409 The key legal questions at issue in this dis pute have clear answers. For these reasons and
those contained in Canada's earlier submissions, and the arguments and evidence submitted by the
United States, Canada respectfully requests that the Panel reject the EC's claim that it has complied
with the recommendations and rulings in EC – Hormones.
7. Concluding statement of Canada
4.410 It is natural, given the subject matter, that the parties on occasion may have shed more heat
than light on the discussions. I hope that none of that has reflected poorly on us or on you.
4.411 The questions at issue are indeed emotive. I note for example that there was an entire section
in the EC statement this afternoon about the protecti on of children. Certainly, there is nothing more
important than protecting the health of our children. This is a concern to us as parents, brothers and
sisters, public officials and, indeed, private citizens.
4.412 But it is essential to make a distinction between real concerns and the speculative references
that have also been at play. There is no need to go into them in detail at this stage, but there have
been a lot of them. That will surely present a di fficult challenge as you proceed with this matter in
your decision making.
4.413 Canada takes it as given that the parties, as democratic, law-abiding countries and entities,
and also as public officials, all have as a princi pal objective the protection of public health and
children’s health. The question is not whether we protect the children – that’s a given. We do so
rigorously and without reservation. The question is how to approach doing so, and in doing so
whether we are abiding by the law.
4.414 We have set out the law in detail, both on pr ocedural issues and on substantive SPS issues,
and will not repeat those points now. But the one point I wished to stress in closing is this: on

whichever side of the law you land, your decision will not harm the children. It would be a disservice
to us all to cast the dispute in any other terms.
V. ARGUMENTS OF THE THIRD PARTIES
A. AUSTRALIA
1. Introduction
5.1 According to Australia, this dispute is about one fundamental question; whether the DSU
provides that a Member's announcement of its co mpliance with DSB recommendations and rulings
triggers an obligation on a retaliating Member to either (i) cease retaliation or (ii) initiate a new
process for a multilateral determination of compliance.25
2. Opening Panel meetings for observation by the public
5.2 Australia contends that when parties agr ee not to follow the Working Procedures in
Appendix 3, or parts thereof, it would be difficult fo r the Panel to justify a decision that goes against
the wishes of the parties. In Australia's view, to do so would undermine a basic principle of dispute
settlement whereby parties consult with each other and with the Panel and seek mutual agreement on
the conduct of disputes, according to Article 12.1 of the DSU.26
5.3 Australia submits that the decision to open the meetings with the parties to the public would
not pose a problem, in principle, to Australia. Australia was however concerned about the modalities
of organising the meetings, equity of access and logistic issues. Australia was of the view that the
opening of the Panel's meetings to the public shoul d be subject to the provisions that allow for
protection of confidential information.27
3. Whether the DSB authorization remains in effect
5.4 Australia argues that a Member's annou ncement of its compliance with DSB
recommendations and rulings triggers an obligation on a retaliating Member to either cease retaliation
or initiate a new process for a multilateral determinati on of compliance. Australia claims that as seen
in Articles 22.1 and 22.8 of the DSU, the right to suspend concessi ons authorized by the DSB is
temporary and conditional upon the respondent continuing to be in non compliance or upon a solution
not being reached. According to Australia, by c ontinuing retaliation in the face of a respondent's
notification of compliance, a complainant is effectively challenging the measure(s) taken to comply.
According to Australia therefore, in such a case it is for the complainant to invoke a compliance panel
pursuant to Article 21.5 of the DSU.
28
5.5 Australia contends that the suspension of concessi ons or other obligations is the "last resort"
for Members invoking the dispute settlement procedures, as stated in Article 3.7 of the DSU.29
4. Article 21.5 of the DSU
5.6 Australia acknowledges that Article 21.5 of th e DSU does not explicitly place the obligation
to invoke a compliance panel on a complaining part y. The text simply provides that in cases of
disagreement over compliance such dispute shall be decided through recourse to the dispute

25 Third party submission of Australia, para. 4.
26 Replies by Australia to Panel questions concerning open hearings, question 1.
27 Replies by Australia to Panel questions concerning open hearings, question 2.
28 Third party submission of Australia, para. 5.
29 Replies by Australia to Panel questions, question 5.

settlement procedure. Australia however argues that requiring a respondent to invoke a compliance
panel against its own measure(s) constitutes an impl icit unilateral determinati on of inconsistency by
the complainant and undermines the presumption that Members act in good faith in taking action to
comply with DSB recommendations and rulings.30
5.7 Australia further submits that this position is consistent with Appella te Body findings on the
presumption of good faith in Chile – Alcoholic Beverages ,31 where the Appellate Body stated that
Members of the WTO should not be assumed, in any way, to have continued previous protection or
discrimination through the adoption of a new measure , as this would come close to a presumption of
bad faith.32 Australia also noted observations on good faith made by the Appellate Body in US – Hot-
Rolled Steel33and US – Line Pipe.34
5.8 Australia thus points out that the fact that a complainant may have been granted temporary
authorization to retaliate against a Member f ound to be in non-compliance does not change the
fundamental application of the presumption of good faith. Australia stresses that disregarding the
presumption in the specific circumstances of a Member announcing that it has taken action which it
considers brings it into compliance would go against the design and underlying logic of the DSU.
35
5.9 Australia posits that the DSU is explicit on th e following points, which provide context for
the interpretation of Article 21.5:36
• Members must not take unilateral action to seek redress for alleged violations of
obligations or other nullification or impairment of benefits (Article 23).
• Instead, Members must have recourse to the DSU and abide with its rules and
procedures (Article 23).
• DSU procedures, including those provided for in Article 21, must be used to resolve
disagreements over compliance (Article 23.1).
• The suspension of concessions or other oblig ations is a "last resort" by Members and
is temporary. That is, it is only authorized until compliance is achieved (Articles 3.7
and 22).
5.10 Australia contends that by refusing to in voke a "compliance panel", a complainant who
disagrees with the respondent's announcement of its compliance allows the dispute to continue
unresolved.37 Australia argues that the longer the time period in which the United States did not take
action under Article 21.5, the greater the firmness or immutability the United States made of its
determination. Australia emphasizes that this is because a determination within the meaning of
Article 23.2(a) of the DSU may be inferred on ce a certain amount of time has passed after
communication by a responding party that it has complied and in which a complaining party continues
to retaliate. According to Australia therefore, th e longer the period of time that a complaining party

30 Third party submission of Australia, para. 6.
31 Chile – Taxes on Alcoholic Beverages , (WT/DS87/AB/R and WT/DS110/AB/R), paragraph 74,
(emphasis in original, footnote omitted).
32 Third party submission of Australia, para. 7.
33 US – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan (WT/DS184/AB/R),
para. 101.
34 US – Definitive Safeguard Measures on Import of Circular Welded Carbon Quality Line Pipe from
35 Third party submission of Australia, para. 8.
36 Third party submission of Australia, para. 9.
37 Third party submission of Australia, para. 10.

continues its retaliation in the face of this communica tion, the greater degree of certainty there is for
the inference that the retaliating party has determined that a violation has occurred, that benefits have
been nullified or impaired or that the attainment of any objective of the covered agreements has been
impeded.38
5.11 Australia argues that there is no procedure that a Member claiming compliance can invoke in
order to obtain a multilateral determination of act ual compliance. According to Australia, the
possibility of a new dispute whereby the origin al respondent complains against the continued
retaliating measures on the basis of actual compliance assumes that there is no obligation upon the
retaliating Member to either initiate an Article 21.5 panel or cease retaliation after communication of
compliance by a respondent, which is an incorrect interpretation of the DSU.39
B. BRAZIL
1. Introduction
5.12 Brazil claims that it files the present submission in light of its interests in the interpretation to
be developed by the parties and the Panel in these proceedings. Brazil states that it will address what
it considers to be the fundamental objective of th e European Communities in the current dispute,
namely to obtain multilateral recognition that it has fully implemented the recommendations of the
DSB without having to bear the burden of proving how it would have effectively implemented those
rulings.40
2. Opening Panel meetings for observation by the public
5.13 Brazil questioned the specific grounds and the DSU provisions on which the Panel based its
decision to accept the parties' request to open th e panel meetings for observation by the public.
According to Brazil, transparency is one of the key issues in the DSU review process and constitutes
an important element in the debate carried out by Members in the DSB meetings. As such, Brazil
notes that the debate on transparency will largely benefit from any further clarification by the Panel as
to the legal reasons which motivated its decision to open the meetings to the public.41
5.14 Brazil argues that a decision on whether or not to open panels' proceedings to the public relies
solely on the WTO membership, in particular th e DSU review process which is the appropriate locus
to deal with issues regarding the Dispute Settlement Mechanism. According to Brazil, if panels were
to decide on this issue, they would go beyond their mandate, playing a role that is exclusive to the
WTO membership.42
5.15 Brazil further submits that the right to be presen t at or to watch a panel meeting should be
granted first to WTO Members subject to the rules fo r third party participation set forth in Article 10
of the DSU. Brazil also contends that opening the meetings to the public would represent a
reinterpretation of Article 14 of the DSU, signaling that there are cases to wh ich confidentiality is not
applied, such as Panel and Appellate Body meetings.43

38 Third party submission of Australia, para. 10.
39 Replies by Australia to Panel questions, question 4.
40 Third party submission of Brazil, paras. 1 and 2.
42 Replies by Brazil to Panel questions concerning open hearings, question 1.
43 Replies by Brazil to Panel questions concerning open hearings, question 1.

3. Whether the DSB authorization remains in effect
5.16 In Brazil's point of view, the European Commun ities must prove that the new measure is in
full compliance with the DSB recommendations. Brazil stresses that the European Communities'
claim is based only on a unilatera l sole assertion of compliance. However, a mere assertion is
insufficient to prove compliance. Brazil submits that the European Co mmunities may modify its
legislation over and over and notify changes to th e WTO without actually bringing the measures into
conformity with WTO rules.44
5.17 Brazil considersthat if the European Commun ities argument were accepted, it would give the
implementing Member the power to unilaterally dispel a previous multilateral determination
authorizing suspension of concessions. Brazil contends that such Member would therefore be allowed
to act as arbitrator, making use of a procedural artifice that could go on ad infinitum. Brazil notes that
it would be absurd to have that practice accepted as the common practice in the implementation of
WTO disputes. It would mean that a mere asse rtion that a Member has changed a measure found to
be inconsistent automatically revokes a DSB aut horization to suspend concessions, while exempting
the Member from proving why and how the new measure complies with the DSB recommendations
and rulings.
45
5.18 Brazil submits that only in case of multilateral de termination confirming that the European
Communities has fully complied could there be gr ounds for consideration of whether the United
States and Canada are in breach of Articles 23, 21.5, 3.7 and 22.8 of the DSU and Articles I:1 and II
of the GATT'94, as claimed.
46
5.19 Brazil argues that just as the initial imposition of suspension of concessions must be preceded
by a DSB determination of non-compliance, the au thorization for a Member to discontinue the
suspension of those concessions can only be made by a DSB determination of compliance, be it for
the initial suspension of concessions, or at a later st age for the lifting of the authorized suspension of
concessions.47
5.20 Brazil posits that the right to suspend concessi ons is temporary and conditional because it can
only be applied based on a multilateral authorization (A rticle 23.2 (c) of the DS U) and until the party
in violation complies with the recommendations of th e DSB or a mutually satisfied solution is agreed
between the parties in the dispute (Article 22.1 and 22.8 of the DSU).48
4. Article 21.5 of the DSU
5.21 Brazil contends that the present situation is different from the one resulting from the
relationship between Articles 21.5 and 22.6 of the DS U and it does not consider examples refered to
by the European Communities regarding the US – Subsidies on Upland Cotton dispute, 49 and
Softwood Lumber 50 disputes, to be applicable to the present proceedings. Brazil argues that the
proceedings under Article 21.5 in those disputes had been already established at the time the
implementing party requested the arbitration to dete rmine the level of the suspension of concessions.

44 Third party submission of Brazil, paras. 5 and 6
45 Third party submission of Brazil, para. 8.
46 Third party submission of Brazil, para. 9.
47 Third party submission of Brazil, para. 20.
48 Replies by Brazil to questions from the European Communities, question 3.
49 US – Upland Cotton, WT/DS267/22.
50 US – Softwood Lumber VI, WT/DS277/11.

Brazil stresses that in the current dispute, Article 21.5 proceedings and Article 22.6 arbitration are not
"simultaneously ongoing", since no request for a compliance panel has been presented.51
5.22 Brazil submits that in the post retaliation phase, one should bear in mind that there is a
multilateral authorization in effect. According to Brazil, a presumption of good faith in carrying out
the implementing measure cannot by itself override a DSB authorization. That authorization should
be revoked by a multilateral determination of compliance not by a unilateral declaration of
implementation or a presumption of compliance.
52
5. Burden of proof
5.23 Brazil posits that the party who makes a partic ular claim bears the burden of proof. Brazil
further contends that by merely asserting that it h as removed the inconsistency found by the DSB, the
European Communities is not supporting its claim.53
5.24 Brazil also argues that the European Communiti es professes that no Member shall be 'judged'
except through multilateral judicial proceedings. 54 However, Brazil notes that this notwithstanding,
the European Communities serves it self with a "blank authorization" to determine unilaterally its
compliance with WTO obligations and the inconsis tency of the continued suspension of concessions
granted by the DSB to the United States. Brazil st ates that had the European Communities wanted to
follow multilateral rules, it should have requested an Article 21.5 compliance panel, as it did in EC –
Bananas III (Article 21.5 – EC).55
5.25 Brazil argues that Article 21.5 of the DSU does not specify which Member is to initiate
Article 21.5 proceeding. Therefore, in Brazil's poi nt of view, when disagreement exists as to the
consistency of the measures taken to comply with the DSB recommendations, any party to a dispute
may have recourse to the Article 21.5 proceedings. Brazil asserts that nothing in the DSU precludes
an implementing Member from resorting to an Artic le 21.5 panel review. Brazil further argues that
Article 6 of the DSU provides a rule for the develo pment of special terms of reference, which could
be applied in those cases where the implementi ng Member requests a panel to analyse its own
measure.56
C. CHINA
1. Introduction
5.26 China submits that the disputes raised in this case are derived from loopholes embedded in the
DSU. China states that this brings to attention the importance of amending those loopholes in the new
round of negotiation. According to China, in absence of any revision of the DSU, it is a challenge for
this Panel to find suitable dispute settlement solution according to the current DSU.57
2. Opening Panel meetings for observation by the public
5.27 China did not provide a reply on the potential le gal constraint that would exclude the Panel
from opening the Panel meeting for observation by th e public. China however preferred the Panel to

51 Third party submission of Brazil, paras. 22-24.
52 Replies by Brazil to Panel questions, question 3.
53 Third party submission of Brazil, paras. 10 and 11.
54 See EC's first written submission, para. 1
55 Third party submission of Brazil, paras. 13 and 14.
56 Replies by Brazil to Panel questions, question 2 and 5.
57 Third party submission of China, paras. 1 and 2.

meet the third parties in closed session. It argues that based on Article 18.2 of the DSU, panels do not
have the right to unilaterally disclose the third party submissions and oral presentations.58
3. The current status of the DSB authorized suspension of concessions
5.28 China submits that under Article 22.8, a DSB au thorized suspension of concessions shall not
be applied, if one of three of the following conditions has been met:59
(a) The measure found to be inconsistent with a covered agreement has been removed;
(b) The Member that must implement the recommendations or rulings provides a solution
to the nullification or impairment of benefits;
(c) A mutually satisfactory solution is reached.
5.29 China contends that if a mutually satisfactory so lution is reached by the parties on (a) or (b)
above, it will fall into condition (c) and then a DSB authorized suspension of concessions shall not be
applied. China posits that if there is no mutua lly satisfactory solution reached by the parties on
whether condition (a) and/or (b) above has been met, the parties have to invoke the dispute settlement
procedures to let the Panel make such determinati on. China posits that in case the responding party
declares any of the above conditions has been satisfied, there are only two options for the complaining
party: (a) to admit the compliance of new measures; or (b) to deny it.60
5.30 In China's view, in case the original complaining party denies the compliance of new
measures, that is, if no agreement is reached be tween the parties as to whether the conditions under
Article 22.8 of the DSU have been met, under Article 23 of the DSU, the parties shall have recourse
to the DSB's determination to avoid unilateral determination.61
5.31 China thus considers that there are only two wa ys to terminate a DSB authorized suspension
of concessions: (i) to reach a mutually satisfactory solution; (ii) to get a final determination from the
DSB. According to China, this is the case, even when the orig inal complaining party needs a
reasonable period of time to evaluate the WTO consistency of the implementation measure.62
5.32 China argues that the European Communities' allegation that it has removed the measure at
issue in itself could not give the European Comm unities ground to terminate the authorization of
suspension of concessions. China asserts that Artic le 23 of the DSU lays down the fundamental
principle that the dispute settlement system of the WTO is the exclusive means to redress any
violation of any provision of the WTO Agreement. It argues that since there is no mutually
satisfactory solution between the European Communities and Canada, the DSB authorized suspension
of concessions shall be applied until the DSB mak es a new determination on the authorization of
suspension of concessions. China notes that th e suspension of concessions pursuant to a DSB
authorization is temporary and conditional, with th e condition being that the original responding party
fully implements the rulings and recommendations of the DSB. China emphasizes that no party can
make a unilateral determination on whether condition (i) and/or (ii) has been met.63
5.33 China emphasizes that if this Panel allows th e original responding party to terminate a DSB
authorized suspension of concessions by introducing an implementing measure, there is a risk that it

58 Replies by China to Panel questions concerning open hearings, questions 1 and 2.
59 Third party submission of China, para. 6.
60 Third party submission of China, paras. 7 and 8.
61 Replies by China to Panel questions, question 7.
62 Third party submission of China, para. 9.
63 Third party submission of China, para. 10 and oral statement of China, paras. 3-4.

could be abused by an original responding party who, instead of bringing its measures into full
conformity with the recommendations and rulings of the DSB, may implement legislation which does
not cure all the defects in its earlier inconsistent le gislation. China argues that if this Panel finds a
DSB authorized suspension of con cessions to remain in effect after the original responding party
introduced an implementing measure, it can he lp enforcing WTO rules by inducing actual
compliance.64
5.34 China is of the view that the suspension of concessions has at least two functions: (i) to
rebalance the interests among parties; (ii) to fo rce the responding party to bring its measure into
compliance with the covered agreement. China posits that if this Panel allows the original responding
party to introduce an implementing measure to override the DSB-authorized suspension of
concessions, it invalidates the second function of suspension of concessions.65
4. Article 21.5 of the DSU and burden of proof
5.35 China states that Article 21.5 of the DSU does not preclude the original responding party
from having recourse to the dispute settlement procedur es in the event that there is disagreement as to
the existence or consistency w ith a covered agreement of measures taken to comply with the
recommendations and rulings. China advances the following reasons for this argument.66
5.36 First, according to China, it would be natural and logical only for the original complaining
party to initiate an Article 21.5 proceeding. China quotes Chile – Alcoholic Beverages67 and Canada –
Aircraft (Article 21.5 – Brazil)68and argues that the original responding party when adopting measures
to implement recommendations and rulings of the DSB shall be presumed to have fulfilled its WTO
obligations, and therefore, shall not bear the burden to demonstrate compliance. China notes that this
is further justified because th e European Communities' implementation measure requires conducting
extensive scientific studies and performing a compre hensive risk assessment in a transparent and
objective manner. According to China therefore, after the European Communities notifies the DSB of
its measure to implement the recommendation and ru lings of the DSB, it has fulfilled the procedure
obligation under the DSU, and should not be required to bear the burden of proof.69
5.37 Secondly, China refers to the practice of treaty interpretation as elucidated in Article 31.3 of
the Vienna Convention on the Law of Treaties and Japan – Alcoholic Beverages II 70, and points out
that the statistics of panel proceedings on compliance under Article 21.5 of the DSU show that in
most cases, it is the original complaining party that initiates the dispute settlement procedure under
Article 21.5 of the DSU. China stresses that the only precedent for an original responding party to
initiate the dispute settlement procedure under Article 21.5 of the DSU is in the EC – Bananas
71
dispute where the European Commun ities as an original responding party sought the establishment of
a compliance panel under Article 21.5 of the DSU wi th the hope of preventing the United States from
having recourse to Article 22.6 of the DSU directly. China asserts that this subsequent practice in the

64 Third party submission of China, paras. 11 and 12.
65 Replies by China to Panel questions, question 3.
66 Third party submission of China, para. 15.
67 Third party submission of China, para. 17.
68 Third party submission of China, para. 18.
69 Third party submission of China, paras. 19 and 20.
70 See Appellate Body Report on Japan – Alcoholic Beverages II (WT/DS8/AB/R, WT/DS10/AB/R,
WT/DS11/AB/R) p. 13
71 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse
to Article 21.5 by the European Communities , Report by the Panel (WT/DS27/RW/EEC), 12 April 1999 –
report never adopted.

application of Article 21.5 of the DSU establishe s the agreement of the parties regarding their
interpretation that the original complaining party should initiate the Article 21.5 proceeding.72
5.38 Thirdly, China argues, the balance of hardship to initiate an Article 21.5 proceeding does not
favour the original complaining party. China belie ves that the original complaining party will suffer
no cognizable harm if it initiates an Article 21.5 proceeding, because the DSB authorized suspension
of concessions is still in effect. China asserts that it is not proper to let the European Communities
initiate an Article 21.5 proceeding simply because the original complaining party is reluctant or has
no incentive to do so.73
5.39 China stresses that it should be presumed that wh en the original responding party introduces
an implementation measure, it has fulfilled its WT O obligation, and it should be the duty of the
original complaining party to demonstrate that th e implementation measure is still inconsistent with
the covered agreement. China believes if this Panel rules that the European Communities, as an
original responding party, should initiate an Artic le 21.5 proceeding, it will unduly shift the heavy
burden on the shoulders of the European Communiti es to establish the compliance, which is against
the nature and logic of the Article 21.5 proceeding.74
5.40 China contends that it is usually the case that the responding party has more information on
its implementation measure, therefore it is better positioned to demonstrate the WTO consistency of
the measure. However, according to China, the nature and logic of the Article 21.5 proceedings
stands against this approach. China stresses that subs equent practice in the application of Article 21.5
confirms this conclusion. China is therefore of th e opinion that the original complaining party should
bear the burden to institute the Article 21.5 proceeding.75
5.41 China continues that the unique part of this case is that the original complaining party has a
DSB authorized suspension of concessions. Accord ing to China, in addition to the function of
inducing compliance, this authorized suspension of concessions can rebalance the trading relationship
between the complaining and the original responding party in order to restore the economic
equilibrium embodied in the original WTO deal. China submits that if after the original panel
proceeding, an original complaining party finds that the original responding party does not implement
the recommendations and rulings of the DSB, it has incentive to initiate an Article 21.5 proceeding,
because it still suffers from a WTO inconsistent measur e. However, in this case, China submits that
due to the rebalance by the authorized suspension of concessions, the original complaining party may
not have the same incentive, therefore it may be necessary to set up a time limit for it to initiate an
Article 21.5 proceeding.
76
5.42 China argues that the proceedings under Artic le 21.5 of the DSU shall be initiated in a
reasonable period of time. China points out that it is in line with the good faith requirement
established by Article 26 of the Vienna Convention on the Law of Treaties and it is also consistent
with the requirement of "prompt settlement of situa tions" in Article 3.3 and the "temporary nature" of
the retaliation system of the DSU.77
5.43 China stresses that it wants to bring to th e Panel's attention that both Article 22.8 and
Article 21.5 of the DSU do not preclude this Panel from setting a time limit to initiate the dispute
settlement proceedings. If this Panel holds that it sh ould be the original complaining party to invoke

72 Third party submission of China, paras. 21-24.
73 Third party submission of China, para. 25.
74 Third party submission of China, para. 26.
75 Third party submission of China, paras. 27 and 28.
76 Third party submission of China, para. 29.
77 Third party submission of China, para. 31.

Article 21.5 of the DSU, to facilitate the implementation of this recommendation and ruling, it may be
necessary to set up a time limit for the original complaining party to in itiate an Article 21.5
proceeding.78
5. Article 23.2 of the DSU
5.44 China argues that to establish a violation of Article 23.2 (a), the Panel shall first assess
whether the act of "determination" is made "in such cases", where a Member seeks the redress of a
WTO violation.79
5.45 China analyses the different interpretations of the term "seek the redress of violation" in US –
Section 301 Trade Act, 80 in US – Certain EC Products "81 and in European Communities – Measures
Affecting Trade in Commercial Vessels, 82 and states that the term "seek the redress of a violation"
should be read broadly to cover any act as long as it seeks to obtain unilateral results that can be
achieved through means other than recourse to the DSU. China states that in this case, the original
complaining party's continued suspension of con cessions could be considered as a measure seeking
the redress of a WTO violation, if it had a chan ce to challenge the European Communities' WTO
violation but held back, allowing the DSB au thorized suspension of concessions to apply
continuously.83
5.46 China argues that after the European Communitie s provided notice of the Directive to the
DSB in October 2003, the original complaining pa rty cast doubt on the WT O consistency of this
European Communities' implementation measure. Since then the complaining party has had a
reasonable period of time to review the European Communities measure and to initiate Article 21.5
proceedings. China argues that it is the lack of action under Article 21.5 of the DSU by the original
complaining party, rather than the DSB authori zed suspension of concessions itself, that may be
considered as seeking the redress of a violation.84
5.47 With respect to the meaning of the term "d etermination", China refers to the panel in US –
Section 301 Trade Act85 and argues that the term "determination" in Article 23.2(a) of the DSU needs
to be read broadly and it does not require that a measure clearly sets out in its text that a WTO
violation has occurred. China argues that such a determination may be inferred from actions.
According to China, the longer the time period in which the original complaining party took no action
under Article 21.5 of the DSU, the greater the firmness or immutability it made such a
determination.86
5.48 China argues that where there is no official determination, the Panel has to find a way to
evaluate the firmness and immutability of the alle ged determination. China notes that before the
decision becomes final, there could be a gradual change process in which a time lapse can be a
parameter. According to China, in the post-retaliation phase, the clock starts ticking when the original
responding party introduces a new measure. Chin a argues that the amount of time needed to
constitute a final determination by the original complaining party under Article 23 of the DSU
depends on several factors, including but not limited to (1) the complexity of the compliance measure;

78 Third party submission of China, para. 32.
79 Third party submission of China, para. 35.
80 See Panel Report on US – Section 301 Trade Act, para. 7.50, footnote 657.
81 See Panel Report on US – Certain EC Products, paras. 6.22 and 6.23.
82 See Panel Report on EC – Commercial Vessels, WT/DS301/R, para. 7.196
83 Third party submission of China, paras. 36-39.
84 Third party submission of China, para. 40.
85 See Panel Report on US – Section 301 Trade Act, para. 7.50, footnote 657.
86 Third party submission of China, paras. 41 and 42.

(2) sufficiency of information related to the comp liance measure; and (3) the ability of the original
complaining party to evaluate such new measure.87
D. INDIA
1. Introduction
5.49 India submits that it takes no position on the r espective assertions of the parties in this
dispute. India notes however that the treaty text is not clear on the respective rights and obligations of
the party taking a compliance measure and the party a pplying sanctions. India contends that this is
evidenced by the fact that this is one of the major issues on which the WTO Membership is currently
engaged in negotiation with a view to improve or cl arify the legal text. India states that it has views
on how the lacunae in the DSU on this issue can be improved or clarified, but that is a matter for the
Membership to decide through future negotiations.
88
2. Opening Panel meetings for observation by the public
5.50 India submits that the issue of external tr ansparency is being di scussed in the ongoing
negotiations in the Special Session of the Dispute Settlement Body. India states that the negotiations
have not yet been completed, and there is no c onsensus on whether and wh ich form of external
transparency is acceptable to the WTO Members. Until that happens, India believes that the Panel
proceedings have to be in closed session, 89 and its deliberations have to remain confidential 90 as
provided in the DSU.91
5.51 India posits that it is not a function of a panel to respond to any requests from the parties that
do not assist in resolution of the matter before it, an d which are not in the terms of reference of the
panel.92
5.52 India contends that the possibility of a pa nel to decide to deviate from the Working
Procedures in Appendix 3 has been provided with a view to have panel procedures with sufficient
flexibilities so as to ensure high-quality panel reports 93. In India's view, deviation from the Working
Procedures, therefore, should meet this qualitative objective. India quotes Article 12.1 of the DSU
and the Panel in India – Patents (US) 94 and argues that although p anels are given some discretion in
establishing their own working procedures, they do no t have the discretion to modify the substantive
provisions of the DSU. India argues that the conf identiality requirements for panel proceedings are a
substantive provision of the DSU, and the Panel cannot use its discretion to modify them in order to
cater to a request by the parties on a matter that does not serve to improve the quality of the Panel's
Report.95
5.53 India argues that Article VII of the Rules of Conduct 96 requires each "covered person" to
maintain the confidentiality of di spute settlement deliberations and proceedings at all times. India

87 Replies by China to Panel questions, question 1.
89 Paragraph 2 of the Working Procedures in Appendix 3 of the DSU
90 Paragraph 3 of the Working Procedures in Appendix 3 of the DSU
91 Replies by India to Panel questions concerning open hearings, question 1.
93 Article 12.2, DSU
94 India – Patent Protection for Pharmaceutical and Agricultural Chemical Products – Complaint by
the United States, Panel Report, WT/DS50/R.
96 Rules of conduct for the understanding on rules and procedures governing the settlement of disputes
adopted by the DSB on 3 December 1996 (WT/DSB/RC/1).

questions how the Panel is going to ensure th at these requirements are met after opening the
proceedings to the public for observation.97
5.54 India submits that the decision of the Panel to open its proceedings to the public necessarily
involves some issues on which consultation and d ecisions with WTO members, and not just the
parties and third parties, would have been necessary. For example, India questions how the Panel, at
its own level, addressed issues relating to the implicat ions on the functioning of the WTO Secretariat,
budgetary implications and implications relating to the use of the official languages of the WTO, for
which rules and practices have been established by other bodies of the WTO. India also questions
how the Panel could take a view on the additiona l costs arising out of the opening up of the
proceedings to public without the Budget Committee having considered the matter.98
5.55 According to India, the WTO is a Member driven organization and it is solely for the WTO
Members to decide whether or not to change th e WTO rules and open up panel proceedings to the
public; a Panel cannot take upon itself that function, even at the request of parties to the dispute.99
5.56 India posits that the meeting of the Panel's ses sion with the third parties should be in closed
session as required under paragraph 2 of the Work ing Procedures contained in Appendix 3 of the
DSU.100
E. MEXICO
1. Introduction
5.57 Mexico submits that the systemic implications of this dispute are of great importance in terms
of the functioning of the DSU and in particular of defining a way of proceeding when there is an
authorization to suspend benefits and then furt her disagreement as to whether or not the DSB's
recommendations and rulings have been implemented. In Mexico's view, the most important issue in
this case is whether the adoption of implementati on measures "require" immediate termination of
retaliatory measures and if not, who should require termination and how. According to Mexico, the
role of the Panel in this case is to give precise answ ers to these questions and to ensure that they fulfil
not only the letter of the DSU, but also the objectiv es of security, predictability and prompt settlement
of the dispute.101
2. Opening Panel meetings for observation by the public
5.58 Mexico disagreed with the opening of the panel meetings to the public on the grounds that
panel meetings constitute panel "de liberations" and as such should be confidential, as per Article 14.1
DSU. Mexico also argues that tr ansparency is a sensitive issue that is currently under discussion in
the negotiations to amend the DSU thus to force one or another negotiating position by taking such a
decision is inappropriate. Mexico argues that the DS U rules require that the meetings be confidential
and therefore, bilateral agreement among parties is not suffice to bend the rules. In its view, therefore,
the decision of the two parties should only prevail to the extent that it does not affect the right of
other DSB Members including third parties. Mexico c ontends that if the Panel is to depart from the
Working Procedures of Appendix 3, the Panel must do so with caution as such deviation is meant to
grant flexibility so as to ensure high quality panel reports, as seen in Article 12.2 DSU.102

100 Replies by India to Panel questions concerning open hearings, question 2.
101 Replies by Mexico to Panel questions concerning open hearings, question 1, paras. 2, 3 and 9.
102 Oral statement of Mexico, para. 2; Replies by Mexico to Panel questions, paras. 3 and 9.

5.59 Mexico emphasizes that public hearings are a cr oss-cutting issue that should be addressed in
all the discussions conducted in the WTO, and shou ld not be imposed by a panel at the request of
three Members. Mexico regrets that the decision w ill set a precedent that may affect the outcome of
the negotiations and which will in all likelihood end up complicating the preparation of working
procedures of future panels.103
5.60 Mexico notes that if the Panel is to open the meetings to the public observation, as a policy
perspective, it poses systemic questions as to the n ecessity to open negotiation meetings and ordinary
sessions of the WTO bodies to the public. 104 Mexico suggests that third party sessions follow the
established WTO practice of being closed session.105
3. Whether the DSB authorization remains in effect
5.61 According to Mexico, the Panel should reject the argument that a simple unilateral
notification is enough to reduce multila teral effort to nothing. Mexico contends that the Panel should
bear in mind the lengthy procedure and high po litical costs to Members of obtaining a multilateral
authorization to suspend concessions.106
5.62 Mexico stresses that it can not allow a dispute se ttlement system to deprive all effect of the
authority to suspend benefits when a Member has failed to implement the DSB's recommendations
and rulings within the reasonable peri od. In its view, in such a case, if the parties fail to agree, the
matter must be resolved by a multilateral decision.107
5.63 Mexico argues in its reply to the questions posed by the European Communities that a DSB
decision may be affected only by another DSB decision taking away the effect of the first decision.108
4. Article 21.5 of the DSU
5.64 Mexico claims that Article 21.5 DSU affords th e most suitable procedure for resolving this
dispute and it could be initiated by any party. Mexico however submits that the dispute could be dealt
with either by an ordinary panel, or through arbitr ation under Article 25 DSU or indeed by any of the
proceedings provided for in Article 5 DSU. Mexi co however points out that it takes a constructive
approach and good will by the parties to make Artic le 21.5 DSU function and be able to resolve any
disagreements.109
F. NEW ZEALAND
1. Introduction
5.65 New Zealand submits that this case raises important issues about the integrity and
effectiveness of the WTO dispute settlement system , as it is principally about issues of compliance
and the proper interpretation and application of the rules of the DSU as they relate to the post-
retaliation phase. In New Zealand's view, the cas e taken by the European Communities is for all
intents and purposes a compliance case and is thus akin to an Article 21.5 case. According to New
Zealand, the same determinations are required to r esolve the case at hand, as would be required had it

104 Replies by Mexico to Panel questions concerning open hearings, question 1, para. 7.
105 Replies by Mexico to Panel questions concerning open hearings, question 2.
108 Replies by Mexico to questions from the European Communities, question 4.

been commenced under Article 21.5. In New Zeal and's view, the Panel's terms of reference 110 are
sufficiently broad to encompass this question a nd in doing so, the Panel should focus on actual
compliance and not presumed compliance.111
2. Opening Panel meetings for observation by the public
5.66 According to New Zealand, there are no legal constraints that would prevent the Panel from
opening the Panel hearings to the public. New Z ealand quotes Article 12.1 wh ich allows panels to
follow Working Procedures unless the panel decid es otherwise after consulting the parties.
New Zealand argues that while Appendix 3 provi des for closed session hearings, the Working
Procedure can be amended on the consent of the panel and the parties. New Zealand further stipulates
that the reference in Article 14.1 of the DSU to pa nel deliberations being confidential refers to the
internal deliberations of the panel, not the hearings with the parties. New Zealand submits that this is
in line with the practice of other internationa l tribunals which have open hearings but whose
deliberations are nonetheless confidential. According to New Zealand, Article 18.2 of the DSU
allows parties to waive confidentiality. New Zeala nd did not object to its third party hearings being
public.112
3. Whether the DSB authorization remains in effect
5.67 New Zealand submits that there is no obligati on on the United States to take an Article 21.5
case, and that in the absence of a determination of compliance from the DSB, the DSB's authorization
of suspension of concessions remains valid.113
5.68 New Zealand argues that underlying the Eur opean Communities' arguments is the assumption
that it should benefit in these circumstances from a presumption of compliance on the basis of the
principle of good faith. 114 New Zealand however does not agree that the said principle applies in the
current circumstances, to require the United St ates to cease the suspension of concessions and
commence Article 21.5 proceedings simply because the European Communities has notified that it
now considers itself to be in compliance. Accord ing to New Zealand, a presumption of good faith
cannot override an explicit multilateral authorization from the DSB to impose a retaliatory suspension
of concessions.115
5.69 In New Zealand's view, the cases cited by the European Communities in support of the
application of a presumption of compliance involve measures that were implemented within the
reasonable period of time and where there was no au thorization to suspend concessions, which is not
the situation at present. New Zealand opines that even if it can be said that a presumption of
compliance operates in the pre-retaliation period wh ile the reasonable period of time is still pending,
in the current circumstances any presumed complia nce on the part of the European Communities has

110 WT/DS320/6 of 14 January 2005 and WT/DS/320/7. The Request for the Establishment of a Panel
by the European Communities states, inter alia, that:
The United States has acted inconsistently with Article 22.8 of the DSU by failing to apply the
suspension of concessions or other obligations only until such time as the measure found to be inconsistent with
a covered agreement has been removed , or the implementing Member has provided a solution to the
nullification or impairment of benefits previously caused to the United States. (emphasis added).
111 Third party submission of New Zealand, paras. 1.06 and 2.19.
112 Replies by New Zealand to Panel questions concerning open hearings, questions 1 and 2.
113 Third party submission of New Zealand, para. 2.09.
114 The European Communities sets out its arguments on the 'presumption of compliance' in
paras. 81-94 of its First Written Submission in addressing its argument that the United States is in violation of
Article 23.1 read together with Articles 22.8 and 3.7 of the DSU.
115 Third party submission of New Zealand, paras. 2.10 and 2.11.

given way to the actual compliance of the suspensi on of concessions which has been duly authorized
by the DSB.116
4. Articles 21.5, 22.8 and 23 of the DSU
5.70 New Zealand argues that while it would be ope n to the respondent to initiate compliance
review under Article 21.5, the argument that Article 23 read with Articles 21.5, 22.8 and 3.7 imposes
a requirement to do so cannot be sustained. New Zealand insists that Article 21.5 merely states that
the disagreement shall be dealt with through recour se to the dispute settlement procedures, but does
not place any particular onus on any one to commence proceedings.117
5.71 New Zealand contends that Article 23 is the framework provision setting up the requirement
to have recourse to dispute settlement when seek ing redress of a violation of obligations. New
Zealand however argues that Article 23 does not addr ess the specific situation in this case, where the
United States has had recourse to dispute settlement in accordance with this Article and has taken all
the steps there identified. New Zealand submits th at Article 23 does not impose an obligation on the
United States to cease the application of the suspension of concessions or to take a compliance review
case where it does not accept that the measure ha s been removed. Nor does it do so when "read
together" with Articles 3.7 and 22.8. New Zeala nd argues that it cannot see how these provisions can
be read to displace the specific authorization under Article 22.6, which has never been revoked.118
5.72 New Zealand posits that if the Panel were to adopt the European Communities' approach, it
would give rise to a situation where an implementing Member could continually impose successive
rounds of litigation at will, by a mere assertion of compliance. In New Zealand's view this could
render useless the mechanism of suspension of concessions. According to New Zealand, this
approach is inconsistent with the aims and obj ectives of the dispute settlement system given the
fundamental importance of suspension of concessions as the 'last resort' of the dispute settlement
system, as per Article 3.7 DSU.
119
5.73 New Zealand points out that the suspensi on of concessions may not be maintained
indefinitely in circumstances where the violation h as been addressed as stipulated in Article 22.8 of
the DSU. According to New Zealand, if the r espondent maintains the suspension notwithstanding,
then there is a "disagreement as to the existence or consistency ... of measures taken to comply" with
the recommendations within the terms of Article 21.5. As a consequence it is open to the party
concerned about this to have recourse to th e dispute settlement procedures to resolve the
disagreement.120
5.74 New Zealand notes that this does not mean however, that sanctions may go on forever even in
cases where there is full compliance but the new me asure has not been challenged. New Zealand
considers that if a measure taken to comply do es indeed remove the inconsistency with the
recommendations and rulings of the DSB, the su spension of concessions should be ceased. In its
view, the justification for continuing to suspend concessions would be the combination of the
continuing DSB authorization and the absence of an y agreement that the original respondent has
brought its measures into compliance.
121

116 Third party submission of New Zealand, para. 2.12.
117 Third party submission of New Zealand, para2.14.
118 Third party submission of New Zealand, paras. 2.14-2.16.
119 Third party submission of New Zealand, para. 2.17.
120 Third party submission of New Zealand, para. 2.18.
121 Replies by New Zealand to questions from the European Communities, questions 4 and 5.

5.75 In New Zealand's view, it is possible for an im plementing Member to initiate an Article 21.5
proceeding in any case "where there is disagreement as to the existence or consistency with a covered
agreement of measures taken to comply with the recommendations and rulings" of the DSB.122
5.76 New Zealand states that Article 21.5 does not sp ecify the procedures to be applied, beyond
stipulating that the matter be referred to the origin al panel and that there be an accelerated timeframe
for circulation of the report. It further contends th at the consequence is that it is up to the Panel to
establish the Panel procedures in accordance with Article 12 of the DSU.123
5.77 New Zealand submits that there is no textual basi s in the DSU for concluding that an original
complainant that maintains a multilaterally authori zed suspension of concessions after notification of
a compliance measure by the original respondent and does not initiate Article 21.5 proceedings, is in
violation of its obligations under the DSU.124
5. Burden of proof
5.78 New Zealand submits that the European Co mmunities bears the burden of proving a prima
facie inconsistency with Article 22.8 of the DSU. New Zealand refers to the Appellate Body decision
in US – Wool Shirts and Blouses 125, and contends that the European Communities must adduce
evidence sufficient to raise a presumption that th e suspension of concessions continues to apply and
that: (a) it has removed the measure found to be inconsistent with the SPS Agreement; or (b) it has
provided a solution to the nullification or impairme nt of benefits; or (c) a mutually satisfactory
solution has been reached. The Eu ropean Communities does not argue (b), and (c) is clearly not the
case, but it instead relies on (a).126
5.79 New Zealand submits that the European Communities has not demonstrated in its first written
submission that it has removed the inconsistent measur e. According to New Zealand, 'removal' of an
inconsistent measure for the purposes of Article 22.8 of the DSU may be interpreted as compliance
with the recommendations and rulings of the DSB. 'Removal' of the measure in this case could
involve the removal of the import prohibition and/or establishing a justification for the prohibition
through a risk assessment consistent with the SPS Agreement, taking into account the particular
requirements which the Panel and Appellate Body reports identified.127
6. Article 5.7 of the SPS Agreement
5.80 New Zealand posits that as the Member seeking to have recourse to Article 5.7, the burden of
proof rests on the European Communities to demonstrat e that the four requirements of that provision
have been met. 128 New Zealand is of the view that while not explicitly stated by the European
Communities, the provisional import ban on the five hormones other than oestradiol-17 β appears to
be an attempt to bring those measures within the qualified exemption provide d of Article 5.7 of the
SPS Agreement. According to New Zealand, as seen in Japan – Agricultural Products II 129, the
European Communities must demonstrate that: (a) its measure was imposed in a situation where

122 Replies by New Zealand to questions from the European Communities, question 6.
123 Replies by New Zealand to Panel questions, question 2.
124 Replies by New Zealand to Panel questions, question 5.
125 United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India (US –
Wool Shirts and Blouses), WT/DS33/AB/R, 25 April 1997, p. 14.
126 Third party submission of New Zealand, paras. 2.21-2.22
127 Third party submission of New Zealand, para. 2.26.
128 The Panel in Japan – Measures Affecting the Importation of Apples ( Japan – Apples ),
WT/DS245/R, 15 July 2003, discussed at para. 8.212 the burden of proof under Article 5.7.
129 Appellate Body Report on Japan – Measures Affecting Agricultural Products (Japan – Agricultural
Products II), WT/DS76/AB/R, 22 February 1999, para. 89.

'relevant scientific evidence is insufficient'; and th at (b) its measure was adopted "on the basis of
available pertinent information, including that from relevant international organisations as well as
from sanitary or phytosanitary measures applied by other Members."130
5.81 New Zealand claims that pursuant to the sec ond sentence of Article 5.7, the European
Communities may not maintain its measure unless it also: (a) 'seek[s] to obtain the additional
information necessary for a more objective assessmen t of risk'; and (b) 'review[s] the measure
accordingly within a reasonable period of time'. Ne w Zealand posits further that the Appellate Body
added that "[w]herever one of these four requirements is not met, the measure at issue is inconsistent
with Article 5.7."131 New Zealand argues that the European Communities states that its provisional
ban on five of the six hormones was adopted "on the basis of the available but still incomplete
data".132 However, according to New Zealand, the European Communities is not required under
Article 5.7 to show that the relevant scientific evidence was 'incomplete', but rather that it was
'insufficient'. New Zealand quotes the Appellate Body in the Japan – Apples case, which analysed the
meaning of this expression that:133
" '[R]elevant scientific evidence' will be 'insufficient' within the meaning of
Article 5.7 if the body of available scien tific 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."134
5.82 New Zealand is of the opinion that the Eur opean Communities in its first written submission
does not establish a prima facie case that relevant sc ientific evidence does not allow an adequate risk
assessment to be carried out. New Zealand argues that the European Commun ities fails in its first
written submission to explain how the current st ate of scientific knowledge has prevented it from
conducting an adequate risk assessment with r espect to the five hormones. According to
New Zealand, this is even more difficult to unde rstand when the same measure, an import ban, which
the European Communities previous ly maintained was based on suffi cient scientific evidence to be
definitive, is now held out as a merely 'provisional' measure.135
5.83 New Zealand submits that on the other hand, the respondent in its first written submission
shows that a considerable body of relevant scientif ic evidence exists as to the use of hormones for
growth promotion purposes. 136 New Zealand argues that the United States points out that the
hormones at issue have been "intensively studied over the last twenty-five years" 137 and that the five
particular hormones subject to the provisional ban have been "studied in greater detail in the
intervening period (since the original Hormones case)".138 According to New Zealand, the inference
to be taken is that the relevant scientific evidence is both quantitatively and qualitatively sufficient to
have enabled the European Communities to conduct an adequate risk assessment, and avoid the need
for recourse to provisional measures.139
5.84 New Zealand further opines that even if the Pa nel were to accept that there was insufficient
scientific evidence for the European Communities to conduct an adequate risk assessment, the
European Communities must also show that its ne w measure was adopted 'on the basis of available

130 Third party submission of New Zealand, paras. 2.28 and 2.29.
131 Appellate Body Report on Japan – Agricultural Products II, para. 89. Emphasis original.
132 EC's first written submission, para. 145.
133 Third party submission of New Zealand, paras. 2.30-2.32.
134 Appellate Body Report on Japan – Apples, para. 179.
135 Third party submission of New Zealand, para. 2.34.
136 See US's first written submission at paras. 55-91.
137 US's first written submission, para. 122.
138 US's first written submission, para. 123.
139 Third party submission of New Zealand, para. 2.35.

pertinent information'. New Zealand stresses that in order to satisfy the burden of proof, the European
Communities must present the 'available pertinent info rmation' it evaluated and the factors that led it
to conclude that a provisional import ban on the five hormones could reasona bly be based on this
information. New Zealand states that the Europ ean Communities failed in its first written submission
to establish any connection between its provisional import ban and: (a) the available pertinent
information; (b) information from relevant inte rnational organisations; and (c) information from
sanitary or phytosanitary measures applied by other Members.140
5.85 According to New Zealand, by contrast, the United States claims that a large body of
'available pertinent information'141 indicates that proper use of the hormones in question poses no risk
to consumers.142
5.86 New Zealand submits that under the third limb of Ar ticle 5.7, in a situation where the relevant
scientific evidence is insufficient to conduct an adequate risk assessment, the European Communities
is required to 'seek to obtain the additional info rmation necessary for a more objective assessment of
risk'. New Zealand contends that the European Communities implies that this requirement is reflected
in Directive 2003/74/EC, which obliges the Commission "to seek more complete scientific
information from any source which could shed light and clarify gaps in the present state of knowledge
on [the hormones]."
143 New Zealand however submits that the European Communities offers no
evidence in its first written submission to explain how the Commission is fulfilling this obligation.144
5.87 New Zealand further opines that the final element of Article 5.7 requires the European
Communities to 'review' its provisional measures 'w ithin a reasonable period of time'. New Zealand
notes that while a competent WTO body has yet to analyse what constitutes a 'reasonable period of
time,' Directive 2003/74/EC has been in force for nearly two years, but the European Communities
makes no suggestion in its first written submission th at a review of the provisional import ban is
contemplated at all, let alone within a 'reasona ble period of time'. New Zealand submits that the
European Communities has failed to discharge its burden of proof with respect to the four elements of
Article 5.7 in its first written submissions.145
7. Article 5.1 of the SPS Agreement
5.88 New Zealand alleges that the European Commun ities has not demonstrated in its first written
submission that its new measures meet the requirements of Article 5.1 SPS Agreement. New Zealand
contends that the Appellate Body in EC – Hormones established that the obligation in Article 5.1
contains two elements: (a) an assessment of risk s; and (b) that Members ensure that their SPS
measures are "based on" such an assessment. New Zealand argues that concerning the first element of
Article 5.1, paragraph 4 of Annex A of the SPS Agreement sets out the definition of a "risk
assessment". New Zealand quotes the Appellate Body 146 that recalled Article 5.2 of the
SPS Agreement, which provides an indicative list of factors that must be taken into account in a risk
assessment.147
5.89 New Zealand further argues that the panel in the Japan – Apples case summarised its
consideration of the elements of Article 5.1 by r ecalling that a risk assessment would also involve an
evaluation of whether the risk assessment was 'as ap propriate to the circumstances', and whether it

140 Third party submission of New Zealand, para. 2.36.
141 See US's first written submission, paras. 127-128.
142 Third party submission of New Zealand, para. 2.37.
143 EC's first written submission, para. 145.
144 Third party submission of New Zealand, para. 2.38
145 Third party submission of New Zealand, paras. 2.38 and 2.39.
146 Appellate Body Report on EC – Hormones, para. 187.
147 Third party submission of New Zealand, paras. 2.42-2.44.

took into account 'risk assessment techniques developed by the relevant international organizations'.148
New Zealand posits that the panel in that case adde d that these two factors would "pervade the entire
assessment of the risk".149
5.90 New Zealand stresses that while the European Communiti es claims to have conducted "a
comprehensive risk assessment" since the Appellate Body decision in 1998 150, it devotes only three
paragraphs of its first written s ubmission to attempting to establish what constitutes a valid risk
assessment for the purposes of Article 5.1. New Zealand submits that the European Communities
notes that it has initiated 17 scientific studies and resear ch projects, but enters into no discussion of
the substance, conduct or conclusions of these studies. 151 According to New Zealand, the European
Communities observes that it addressed specific request s for scientific data to several countries and
published an open call for relevant and recent scien tific data and information from any interested
party, but makes no comment on the information received.152
5.91 New Zealand further opines that in its firs t written submission, the European Communities
simply refers to the SCVPH Opinions and presents a three-paragraph excerpt from
Directive 2003/74/EC
153 which provide, on the face of it, a rath er limited and constrained justification
for the European Communities' import ban. Further, New Zealand posits that the European
Communities articulates no clear link between "excess intake of hormone residues" (which is not
defined in relation to use as a growth-promoting hormone) and "a risk" that has been identified.
154
5.92 In New Zealand's view, the European Communitie s' recital and its bare conclusion fall well
short of demonstrating that the European Comm unities has met the threshold required under the
SPS Agreement for the existence of a valid risk assessment. New Zealand notes that in particular, the
European Communities fails in its first written subm ission to adduce sufficient evidence that its risk
assessment: (a) adequately identifies any adverse effects on human health arising from the presence of
the hormones in question when used as growth promoters in meat; 155 (b) evaluates the potential or
possibility of occurrence of such adverse effects; 156 (c) is 'as appropriate to the circumstances'; 157
(d) takes into account risk assessment techniqu es developed by the relevant international
organisations;158 and (e) takes into account the available scientific evidence as ma tters specified in
Article 5.2 of the SPS Agreement.159
5.93 New Zealand argues that none of these criteria is optional in the performance of a risk
assessment, and therefore the Europ ean Communities is required to demonstrate that all of them have
been satisfied in the development of its opini ons. New Zealand submits that the European
Communities has failed to adduce sufficient evidence to discharge this burden.160

148 Panel Report on Japan – Apples, para. 8.236.
149 Panel Report on Japan – Apples, para. 8.237.
150 EC's first written submission, para. 142.
151 EC's first written submission, para. 142.
152 Third party submission of New Zealand, para. 2.48.
153 EC's first written submission, para. 144.
154 Third party submission of New Zealand, para. 2.49.
155 SPS Agreement, Annex A, paragraph 4. Extrapolated from the Panel Report in EC – Hormones ,
para. 8.101, as considered in the Appellate Body Report at paras. 183-184.
156 SPS Agreement, Annex A, paragraph 4. Extrapolated from the Panel Report in EC – Hormones ,
para. 8.101, as considered and modified in the Appellate Body Report at paras. 183-184.
157 SPS Agreement, Article 5.1.
158 SPS Agreement, Article 5.1.
159 Third party submission of New Zealand, para. 2.51.
160 Third party submission of New Zealand, para. 2.52.

5.94 New Zealand contends that in contrast, the United States outlines some of the scientific
evidence that exists on the use of growth-promoting hormones 161, and evokes long-standing practice
on the proper assessment of risks related to veterinary drug residues. 162 According to New Zealand,
this casts doubt on both the process and the s ubstance of the European Communities' risk
assessment.163
5.95 New Zealand states that in the event that the Panel decides that the European Communities'
opinions constitute a valid risk ass essment for the purposes of Article 5.1, the European Communities
is also required to demonstrate that the measure s in question are 'based on' a risk assessment.
According to New Zealand, the Appellate Body analysed this relationship in EC – Hormones 164, and
states that the term 'based on' required a certain objective relationship between the risk assessment and
the measure in question.165
5.96 New Zealand argues that the European Communitie s does not attempt to explain in what way
or to what extent its new measures are considered to be 'in accordance' with the scientific conclusions
of the SCVPH. New Zealand further stipulates that the European Communities offers no basis at all
for concluding that its risk assessment 'reasonabl y supports' its new measures. New Zealand argues
that in this case, the European Communities bears the burden of establishing that its risk assessment
'sufficiently warrants' the new measures it adopted. In New Zealand's view it was not open to the
European Communities to leave the existence of a 'rational relations hip' to be inferred from a brief
summary of the conclusions of the European Communities' opinions.166
G. NORWAY
1. Opening Panel meetings for observation by the public
5.97 Norway considers that Article 12.1 of the DSU gives the Panel the discretion to follow other
working procedures than the ones provided in Appendix 3 after consulting the parties. It sees no legal
constraints in granting the request to the parties to open the hearings to the public. Norway also
agrees to have the third party session of the hearing open to the public.167
2. Whether the DSB authorization remains in effect
5.98 Norway considers that the right to apply th e suspension of concessions pursuant to a DBS
authorization is temporary and conditional. According to Norway, the application of the right rests on
two basic conditions. First; that there be an aut horization pursuant to Article 22.6 DSU and that the
conditions set out in Article 22.6 DSU and 22.7 DSU, are respected and secondly, that the temporal
condition of Article 22.8 is met.168
5.99 Norway opines that the temporal condition in Article 22.8 has three alternative elements:
(a) the measure found to be inconsistent with a covered agreement has been removed; or (b) the
Member that must implement recommendations or rulings provides a solution to the nullification or
impairment of benefits; or (c) a mutually satisfactory solution is reached.169

161 See, for example, US's first written submission, paras. 55-91.
162 US's first written submission, para. 136.
163 Third party submission of New Zealand, para. 2.53.
164 Appellate Body Report on EC – Hormones, para. 193.
165 Third party submission of New Zealand, para. 2.55.
166 Third party submission of New Zealand, para. 2.58.
167 Replies by Norway to Panel questions concerning open hearings, question 1 and 2.
168 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 2.
169 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 3.

5.100 Norway contends that the common concept in all the three elements is that continued
suspension is related to continued non-compliance or lack of any other mutually satisfactory solution
to the inconsistency. According to Norway therefor e , the temporal condition is intrinsically linked to
the substance of compliance. Norway posits that out of the three elements, the third one, "a mutually
satisfactory solution", can in principle be achieve d at any point in time and once achieved, would
resolve the matter and no suspension may continue. Norw ay adds that this is even so if the original
measure found to be inconsistent with a covered agreement is still in place.170
5.101 Norway considers that the first two elements are in reference to compliance, which can be
achieved through the removal of the original measur e or through another solution to the nullification
or impairment of benefits, and the second elemen t is the normal situation where one measure is
replaced by another measure.171
5.102 Norway submits that once compliance is achieve d, be it through a simple revocation of the
inconsistent measure or its repla cement with another measure that ensures compliance, the right to
suspend obligations automatically lapses. Norway is of the view that similarly, once compliance has
been established by a panel pursuant to Article 21. 5 of the DSU, the previous authorization lapses
ipso facto once the report is adopted, without there being a need for the DSB to revoke it formally as
the temporal condition no longer exists.172
5.103 Norway contends that once a measure taken to comply is notified by the original respondent,
the question arises whether this amounts to full co mpliance or not. Norway submits that if the
original complainant considers that the measure taken to comply falls short of what is required by the
adopted rulings and recommendations, then the obliga tion to refer a "compliance dispute" to a panel
according to Article 21.5 is incumbent upon them.173
3. Article 21.5 of the DSU
5.104 Norway argues that the situation addressed by Article 21.5 DSU occurs when the original
respondent claims to have complied with the recomm endation and ruling of the DSB, but the original
complainant disagrees. According to Norway, Ar ticle 21.5 is competent both where the parties
disagree as to the very existence of measures take n to comply, and where they disagree as to whether
the measures taken to comply actually achieve complia nce. Norway is of the view that the case at
hand is typical in this respect, and falls squarely w ithin the ambit of Article 21.5. Norway notes that
neither Article 22.8 nor Article 21.5 sets forth time lines in this respect.174
5.105 According to Norway, the origin al complainant must be accorded a certain amount of time to
assess the measure before going to a compliance panel. Norway posits that the length of time needed
will vary from case to case, and it is hard to set a fixed dead-line. In Norway's view, the DSU does not
include such a fixed dead-line, however, this does not mean that the original complainant can refuse
to take action according to Article 21.5 within a reas onable time. Norway thus contends that in order
to avoid such unreasonable delay, Article 21.5 allows the original respondent to have recourse to a
compliance panel.175
5.106 Norway contends that the obligation to refer a "compliance dispute" to a panel according to
Article 21.5 rests on both parties in the dispute. According to Norway, Article 21.5 does not specify

170 Replies by Norway to questions from the Europ ean Communities, questions 3, 4 and 5, paras. 4
and 5.
171 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 6.
172 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 7.
173 Replies by Norway to Panel questions, question 5 para. 10.
174 Replies by Norway to questions from the European Communities, questions 3, 4 and 5, para. 8.
175 Replies by Norway to Panel questions, question 5, paras. 11 and 12.

that it must be the original complainant to refer the matter to a "compliance panel". Norway submits
that Article 21.5 is written in the passive form, conc entrating on the result, specifically to place this
obligation on all parties to the original dispute.176
5.107 Norway submits that the standard practice has b een that the original complainant refers the
matter to the panel. It argues th at the one exception so far has been the referral to a compliance panel
by the European Communities in EC – Bananas III (Article 21.5 – EC). 177 According to Norway, the
fact that the report remains unadopted and that the panel in that case refused to make any
recommendations or rulings in the case, does not in itself prove that an original respondent may not
invoke Article 21.5.178 Rather, the position of the Panel in that case must be seen in the light of the
fact that Ecuador also requested a separate compliance panel 179 , and that the United States had
submitted a request for retaliation that led to arbitration. 180 Norway submits that the panel in that
particular case could thus justify not making any recommendations or rulings by pointing to these
other proceedings.181
5.108 In Norway's view, a panel launched by the respondent cannot just make a declaratory
judgment based on the presentation of the original respondent, but must make an objective assessment
of the matter before it. The scope of the "terms of reference" would be to examine whether the
measures taken to comply imply that there is now compliance with the rulings and recommendations
of the original panel, i.e. that the original violation has been removed. Only the violations specifically
addressed in the original report will be addressed by the compliance panel, not any other violations
that the new measure may cause.182
5.109 Norway argues that where the orig inal complainants refuse to par ticipate, then any claim that
the new measure is inconsistent with other provis ions of the covered agreements will not be heard
(will be outside of the "terms of the referen ce" for the compliance panel), and the original
complainants risk a finding of co mpliance that does not take into acc ount all the arguments that they
would otherwise have presented. By not launchin g the Article 21.5 panel in a timely manner, the
original complainants thus lose certain rights to pr esent new claims that they would have had, had
they themselves launched the panel request first. Such claims will thus have to await another panel.
As such, the incentive structure th at is created by allowing the original respondent to launch an
Article 21.5 panel proceeding works to provide the original complainants w ith the incentive to go
ahead themselves and launch the Article 21.5 panel first.183
5.110 In case a compliance panel is requested by the original respondent, the reference in Article 6.2
to "provide a brief summary of the legal basis of the complaint sufficient to present the problem

176 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities,
para. 13.
177 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse
to Article 21.5 by the European Communities , Report by the Panel (WT/DS27/RW/EEC), 12 April 1999 –
report never adopted.
178 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities,
para. 14.
179 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse
to Article 21.5 by the Ecuador, Report by the Panel (WT/DS27/RW/ECU), 12 April 1999.
180 European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse
to Arbitration by the European Communities under Article 22.6 of the DSU , (WT/DS27/ARB), Report of the
arbitrators dated 9 April 1999.
181 See paras. 4.15 and 4.16 of the Panel Report in WT/DS27/RW/EEC.
182 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities,
paras. 16 and 18.
183 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities,
para. 16.

clearly" can be fulfilled by referring to the original pa nel report, together with the identification of the
specific measure taken to comply and how it ensures compliance. 184 Where the original respondent
has to request an Article 21.5 panel because the origin al complainants refused to do so, the original
respondent may be considered as "complainant" for the purpose of Article 6.1 and "applicant" for the
purpose of Article 6.2. The question who is "com plainant" and who is "respondent" does not matter
for the rest of the proceedings.185
H. SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU
1. Introduction
5.111 The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu (Chinese Taipei)
submits that it presents its views in this dispute b ecause of the important systemic issues involved, in
particular, the raised DSU provisions that are under negotiations in the Special Session of the Dispute
Settlement Body. In its view, the resolution of cer tain issues in this case could significantly impact
these negotiations.
186
2. Opening Panel meetings for observation by the public
5.112 Chinese Taipei argues that in accordance with the procedures and customary practices
developed over more than half a century under GA TT, which are reflected in Articles 14.1, 18.2 and
Appendix 3 of the DSU, panel proceedings are to be kept confidential. It argues that only Members
by consensus can change the rules of confidentiality. According to Chinese Taipei, a panel, even with
the consent of the parties does not have the legal authority to open the proceedings to the public.187
5.113 Chinese Taipei refers to Article VII of the Ru les of Conduct which requires that each covered
person shall at all times maintain the confidentia lity of the dispute settlement deliberations and
proceedings. According to it, the only exception to this confidentiality obliga tion is Article 18.2 of
the DSU which states that nothing in the DSU sh all preclude a party to a dispute from disclosing
statements of its own positions to the public. Chin ese Taipei is therefore of the opinion that this
exception does not extend to the possibility of allo wing parties to decide whether to open panel
meetings to the public.188
5.114 According to Chinese Taipei, "panel deliber ations" implies more than one form of
deliberation, thus includes not only internal consid eration among panelists, but also the entire process
of the panel's consideration of the dispute.189
5.115 Chinese Taipei argues that the flexibility from Article 12.1 of the DSU to change Working
Procedures in Appendix 3 cannot be extended to c over provisions in the Working Procedures that
directly elaborate on the obligations of the DSU. It further argues that if the drafters had
contemplated that the confidentiality requirement can be changed, they would have said so, just like in
Article 18.2 of the DSU. In the absence of such language, only an amendment to the DSU by the
Members through negotiations can change the requirement of confidential deliberations.190

184 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities,
para. 18.
185 Joint reply by Norway to question 2 from the Panel and question 6 from the European Communities,
paras. 17 and 19.
186 Third party submission of Chinese Taipei, para. 1.
187 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, paras. 1 and 2.
188 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, paras. 4 and 5.
189 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, para. 3.
190 Replies by Chinese Taipei to Panel questions concerning open hearings, question 1, paras. 6 and 7.

5.116 Chinese Taipei is of the opinion that the third party sessions be in closed session.191
3. Whether the DSB authorization remains in effect
5.117 Chinese Taipei contends that the new implementi ng measure is required to be confirmed by a
multilateral determination that the measure is compliant with the DSB's recommendations and rulings.
According to it, a unilateral claim of compliance t ogether with the principle of good faith does not
overturn the DSB authorization of suspension of co ncessions, and that suspension of concessions can
continue until the conditions in Article 22.8 have been met.192
5.118 According to Chinese Taipei, the suspension of concessions can only be lifted after a
multilateral determination of compliance, which involves an examination of the implementing
measure against the recommendations and rulings of th e DSB, or by mutual agreement of the parties.
In its view, until then, the DSB authorization re mains valid and the suspension of concessions may
continue. Chinese Taipei further states that if none of the parties brings the implementing measure to
the panel, whether through Article 21.5 or Article 22.8, the suspension of concessions may continue.
It contends that without the initiation of a dispute that results in the examination of the implementing
measure, the status quo would be considered as maintaining the existing balance of rights and
obligations among WTO Members.193
5.119 Chinese Taipei does not consider that there is a need to justify the continuing suspension of
concessions after the implementing Member's cl aim that it has complied with the DSB's
recommendations and rulings.194
5.120 Chinese Taipei rejects the view th at the lack of action for any period of time on the part of
Canada constitutes an expression of Canada's determin ation. According to it, the existence of the
determination by Canada cannot depend on such an indeterminate criteria as the length of time it takes
for Canada to take action under Artic le 21.5 of the DSU. In its view, Article 22.8 of the DSU allows
Canada to continue its suspension of concessions un til one of the three conditions therein have been
met.195
4. Article 21.5 of the DSU
5.121 Chinese Taipei considers that one of the ways to arrive at a multilateral determination in the
current situation is through Article 21.5 of the DS U. With respect to the European Communities'
argument that in absence of the initiation by Ca nada of an Article 21.5 compliance panel, the
European Communities' implementing measure must be presumed to be compliant with WTO rules 196
and the continuation of the suspension of concess ions by Canada would amount to a unilateral
determination of a violation of WTO rules, it argues that Article 23.2(a) is valid only if two
requirements are present in the text of Article 21. 5,namely, (a) a deadline by which a 21.5 panel must
be initiated, and (b) an obligation only on the original complaining party to initiate the proceeding.
197
5.122 Chinese Taipei considers that neither one of th ese requirements currently exists in the text,
nor is it reasonable to interpret their existence. It submits that it is up to the Member involved to
choose whether and when to initiate the Article 21. 5 proceeding. It opines that while it recognizes
that the party suffering the suspension of concessions has an interest to lift such suspension as early as

191 Replies by Chinese Taipei to Panel questions concerning open hearings, question 2, para. 12.
192 Replies by Chinese Taipei to questions from the European Communities, question 1.
193 Replies by Chinese Taipei to questions from the European Communities, question 4.
194 Replies by Chinese Taipei to questions from the European Communities, question 5.
195 Replies by Chinese Taipei to Panel questions, question 1.
196 EC's first written submission, para. 61.
197 Oral statement of Chinese Taipei, para. 2.

possible, that interest has to be balanced with the fact that the same party had originally been
determined, through a lengthy WTO pr ocess, to be in violation of it s obligations, and had a chance to
implement, but failed to do so, within a reasonable period of time. Further, it argues that consistent
with the text of Article 21.5, if the original r espondent considers the conditions for the suspension of
concessions to be no longer valid, the respondent may initiate the Article 21.5 proceeding at any
time.198
5.123 Chinese Taipei stresses that as the DSU currently stands, th ere is no deadline and no
designated party to initiate the Ar ticle 21.5 proceeding. Chinese Taip ei agrees with the United States
that just because the United States has not initiated the Article 21.5 proceeding does not mean that the
European Communities automatically enjoys the presu mption of compliance. In its view, at this
stage, only a multilateral procedure can reach that conclusion, and one of the ways the European
Communities can obtain such a multilateral determina tion is through its initiation of an Article 21.5
panel.
5.124 Chinese Taipei wishes to remind the Panel that the procedural issues involved in this case are
currently under discussion in the negotiations on the improvement and clarification of the DSU. It
argues that several competing proposals are on the table, including one from the European
Communities. Chinese Taipei notes that it is a vi ew widely shared by Members that the DSU
procedures in this so-called "post-retaliation stag e" are imperfect. According to Chinese Taipei
however, it is not the task of the Panel, or indeed any Member, through litigation, to make up for such
imperfection. Therefore, Chinese Taipei urges the Panel to avoid interpreting the current provisions
in a way that would impose rules or requirements that are not written in the text.199
5. The relationship between Article 22.8 and Article 23 of the DSU
5.125 Chinese Taipei argues that Articles 23 and 22.8 apply to different situations and therefore
should not be read together, as this would lead to a weakening of the WTO dispute settlement system.
It contends that Article 22.8 differs from Article 23 in that it deals with the specific post-retaliation
situation, outlining the conditi ons under which the suspension of the concessions pursuant to
authorization from the DSB can be lifted. Chinese Taip ei states that the general principle of resolving
disputes under the multilateral system in Article 23 has been specifically modified by Article 22.8.
Article 22.8 thus has its own independent set of requirements applicable specifically to the post-
retaliation situation, apart from the general principles in Article 23.200
5.126 Chinese Taipei opines that the basis upon which European Co mmunities builds its arguments
for its interpretation of DSU Articles 23 and 22.8 is the general principle of good faith under which
States are normally considered to act in conformity with their obligations. 201 Chinese Taipei agrees
that Article 23.2(a) embodies that principle in prohibiting Members from making any unilateral
determination to the effect that a violation has occurred.202
5.127 Chinese Taipei argues that by its title, Article 23 applies to the normal situations when the
Member is responding to a perceived violation, nullification, impairment, or impediment, to which the
Member is seeking remedy. It argues that this is the normal situation under which most cases begin
and are first brought to the attention of the Dispute Settlement Body.203

198 Oral statement of Chinese Taipei, para. 3.
199 Oral statement of Chinese Taipei, para. 4.
200 Third party submission of Chinese Taipei, paras. 2 and 7.
201 EC's first written submission para. 87.
202 Third party submission of Chinese Taipei, paras. 2-4.
203 Third party submission of Chinese Taipei, para. 5.

5.128 According to Chinese Taipei, Article 23.2 prescr ibes the actions Members may take in the
normal situation described in Article 23.1. Accord ing to it, specifically, 23.2(a) prevents a Member
from acting upon the unilateral perception of viol ation until it is validat ed under multilateral
procedures. Chinese Taipei considers that this amount s to the presumption that a Member is normally
considered to be acting in conformity with its obligations until a multilateral determination under the
WTO says otherwise.204
5.129 Chinese Taipei posits that Article 22.8 on the ot her hand describes situations that depart from
the norm. It submits that the general principle in Article 23 relating to normal situations therefore has
limited application and must be modified by the speci fic requirements spelt out in Article 22.8. In its
view, the situation at hand is one where the redress of violation has already been determined at least
once through multilateral procedures and where susp ension of concessions has been authorized.
Chinese Taipei argues that the requirement is not that the suspension of concessions must be lifted in
the absence of an adverse finding, but rather that the suspension shall be applied until the violation
has been removed or any of the other two conditions in the provision have been met.205
5.130 According to Chinese Taipei, it therefore follo ws from this difference in situation and
requirement that the normal presumption that a Member is considered to be in conformity with its
obligations until proven otherwise in a multilateral de termination does not apply. It contends that
since Article 22.8 provides that the suspension of concessions can continue until the removal of the
violation, the presumption here is that there is no removal of the violation until a multilateral
determination says otherwise.206
5.131 Chinese Taipei contends that if the normal presu mption were to apply to Article 22.8, despite
the existence of a multilateral determination and au thorization for retaliation, any offending Member
can simply declare itself to have removed the violation. It submits that this would create the incentive
for Members to implement partially or not at all, and drag the Member suspending concessions into an
endless loop of Article 21.5 litigations.207
5.132 Chinese Taipei is of the view that under both normal and Article 22.8 situations, a multilateral
determination is the prerequisite to any action that changes the existing balance of rights and
obligations. It further notes that normally, a Me mber cannot seek redress of violation without a
multilateral determination because a balance is presume d to exist. Similarly, Chinese Taipei argues
that under the Article 22.8 situation where suspension of concessions is in place, that situation is the
presumed balance, and that existing balance cannot be changed without another multilateral
determination.208
5.133 Chinese Taipei thus argues that the suspension of concessions by Canada does not fall into the
normal situation described in Article 23 and un til a multilateral determination deems the European
Communities' implementing measure to have rem oved the previously multilaterally determined
inconsistency, the continuation of suspension of concessions by Canada does not violate the existing
provisions of the DSU.209

204 Third party submission of Chinese Taipei, para. 6.
205 Third party submission of Chinese Taipei, para. 7.
206 Third party submission of Chinese Taipei, para. 8.
207 Third party submission of Chinese Taipei, para. 9.
208 Third party submission of Chinese Taipei, para. 10.
209 Third party submission of Chinese Taipei, para. 11.

I. UNITED STATES
1. Introduction
5.134 The United States submits that for all of the reas ons set out in the arguments presented by the
United States in United States – Continued Suspension of Ob ligations in the EC – Hormones Dispute
(WT/DS320)210 the United States concurs that Canada's continued suspension of concessions to the
European Communities is consistent with th e obligations of Canada under the DSU and
GATT 1994.211
2. Opening Panel meetings for observation by the public
5.135 A summary of the arguments of the United States on the opening of panel meetings for
observation by the public is set out in Section IV.B.2 of the Panel's Report in United States –
Continued Suspension of Obligations in the EC – Hormones Dispute (WT/DS320).
VI. INTERIM REVIEW
A. INTRODUCTION
6.1 Pursuant to Article 15.3 of the DSU, the findi ngs of the final panel report shall include a
discussion of the arguments made by the parties at th e interim review stage. This section of the Panel
report provides such a discussion. As is clear from Article 15.3, this Section is part of the Panel's
findings.
6.2 The European Communities and Canada separatel y requested an interim review by the Panel
of certain aspects of the interim repor t issued to the Parties on 31 July 2007. 212 The European
Communities stated that it stood ready to attend an in terim review hearing to discuss the issues raised
in its letter, "should the Panel consider it useful". The Panel notes that it is not for it to decide
whether holding an interim review hearing would be useful. Article 15.2 of the DSU provides that it
is "[a]t the request of a party [that] the panel sha ll hold a further meeting with the parties on the issues
identified in the written comments." The Panel does not understand the EC statement above as a
request by the European Communities for the Panel to hold an additional meeting with the parties.
Furthermore, the Panel notes that Canada did not requ est such a meeting. As a result, the Panel did
not hold an interim review meeting.
6.3 In accordance with the Panel working procedures and timetable, the parties had, and used, the
opportunity to submit further written comments on each other's requests for review of specific aspects
of the interim report. 213 These comments are discussed, where relevant, together with the request to
which they relate.
6.4 The Panel issued its final report to the parties on a confidential basis on 21 December 2007.
6.5 The Panel has structured its treatment of the Parties' requests below in the following manner:
(a) first, it addresses a comment made in rela tion to the descriptive part of the report
(Section IV) that the Panel could not address at an earlier stage of the proceedings;

210 WT/DS320/6.
211 Letter of 19 August 2005 to the Panel explaining the US third party submission.
212 Letters of the parties dated 28 September 2007.
213 Letters of the parties dated 19 October 2007.

(b) second, it discusses the comments of the parti es relating to the findings of the Panel
and, more particularly:
(i) the aspects of the report regarding procedural issues (Section VII.A);
(ii) the comments of the parties regarding the Panels findings of violation of
Article 23.2(a) read together with Articles 21.5 and 23.1 of the DSU
(Section VII.B); and
(iii) the comments of the parties regarding the compliance of the EC ban on meat
and meat products treated with the six hormones at issue for growth
promotion purposes with the SPS Agreement in relation to the Panel's
findings on the EC claims on Article 23.1, read together with Articles 22.8
and 3.7 of the DSU (Section VII.C).
6.6 In addition, minor editing changes were made, wh ich the Panel did not deem necessary to list
in this section.
B. P
ARTIES' COMMENTS ON THE DESCRIPTIVE PART
6.7 The Panel considered and incorporated in its revised descriptive part the majority of the
parties' comments. In one instance, however, the Panel rejected the modifications requested by the
European Communities and deems it appropriate to provide its reasons in this section.
6.8 This instance relates to the EC request that th e Panel incorporate in the descriptive part the
parties' arguments on logistical issues relating to the opening to public observation of the Panel's
substantive meetings with the parties and with the experts.
6.9 In its comments on paragraph 4.2 and following of the descriptive part of this report, the
European Communities notes that, while the parties' answers of 20 June 2005 to a number of
questions of the Panel have been reported in full, ther e is no reference to the parties' replies of 7 July
2005 to the additional questions of the Panel. Th is, in the opinion of the European Communities,
raises a question of the completeness of the record of the parties' arguments. Inserting the replies of
the parties of 7 July 2005 is also important according to the European Communities since the
comments of the third parties on logistical matters ha ve been reported in the descriptive part. Thus,
the European Communities requests the Panel to re flect the parties' responses to these additional
questions in its report.
6.10 The Panel notes that the parties' replies of 7 July 2005 essentially addressed technical
questions of a logistical nature. The Panel did no t deem it necessary to insert in its report any account
of the logistical aspects of the opening of the hear ings to public observation. The Panel notes in this
respect that it did not include in the descriptive pa rt of the report extracts from the replies of the
parties of 20 June 2005 that related to logistical i ssues. Given that, among the third parties, only India
and Mexico mentioned, in a general manner, the logi stical implications of opening hearings to public
observation, the discussion on logistical issues essenti ally took place between the parties themselves,
or between the parties and the Secretariat. The Panel did not address the details of the logistical issues
in its decision on opening meetings for public observati on. This matter is, in the opinion of the Panel,
purely administrative. It is neither procedurally nor factually relevant for the resolution of the dispute
before us. The Panel is mindful that such an account might be useful from a practical point of view for
future panels. However, it considers that the technical solutions found in this case may not necessarily
be extended to other panel procedures, if only because the parties' expectations and constraints, e.g. in

terms of confidentiality, may be different in future cases. 214 Whereas the Panel provided a detailed
account of the legal issues related to the opening of the Panel's hearings for public observation, for the
reasons mentioned above, it decided not to follow the suggestion of the European Communities.
6.11 The Panel nonetheless wishes to confirm that the technical options available were extensively
discussed with the parties and that the solution finally selected, i.e. the broadcast of the hearings into a
separate room through closed-circuit television, was adopted in accordance with the positions
expressed by the parties.
C. PARTIES' COMMENTS REGARDING THE FINDINGS OF THE PANEL
1. Preliminary remarks
6.12 As a preliminary remark, the Panel notes that the European Communities mentions in the
introduction to its written request for the Panel to review precise aspects of the interim report that it:
"[W]ill try to provide some examples of the numerous and serious errors in the
reasoning of the Panel on the scientific issues underpinning this dispute. However, it
is not possible in the time available to provide a detailed and complete list of all
omissions and errors of the two interim reports as it would in reality require re-
writing substantial parts of the Panel's repor t in order to rectify its analysis and
reasoning... Therefore, the European Comm unities reserves the right to make all its
comments at the appeal stage , if the Panel's findings on the issue were to be
maintained."215 (emphasis added)
6.13 This statement suggests that the European Communities did not identify all the precise
aspects of the interim report with which it disag rees due to lack of time and because this would
require rewriting substantial parts of the Panel report. It would, however, be able to make all its
comments at the appeal stage. The Panel wishes first to make it clear that parties were free to request
an extension if they needed more time to revi ew the interim report and identify precise aspects that
should be addressed by the Panel. The Panel notes in this respect that it is at the request of the
European Communities that parties were granted several additional weeks to review the interim
report. The Panel also notes that the European Co mmunities gave as a justification for its request the
expected length and complexity of the report. The Panel therefore regrets that the European
Communities is now alleging lack of time as a justification for providing only "some examples" of
errors in the reasoning of the Panel on the scientific issues underpinning this dispute.
6.14 In contrast, the European Communities mentions that it may make "all its comments" at the
appeal stage. The Panel is surprised by the appa rent choice of the European Communities to "make
all its comments" before the Appellate Body rather than before the Panel, at the procedural stage
expressly designed for the purpose of considering any and all comments on the interim report. This is
because the decision of the European Communities to provide only "som e examples" of errors of the
Panel suggests that it has already decided to app eal the Panel report unless the Panel makes changes
which the European Communities will not specify. It is also not clear whether the "examples" given
by the European Communities exhaust all its factua l comments or whether it intends to make further

214 In the present dispute, after comparing different alternatives, the Secretariat was able to arrange
open hearings through closed-circuit broadcast from one room to another utilizing the existing facilities of the
Secretariat. The cost of open hearings was covered by the regular budget under the Secretariat arrangement.
There may be different cost implications for future disputes in different circumstances but that consideration
would fall outside the remit of this Panel.
215 EC's written request of 28 September 2007, para. 5.

comments on factual issues before the Appellate Body . Having regard to Article 17.6 of the DSU, we
consider this to be equivalent to depriving the interim review stage of its purpose.
6.15 The Panel therefore regrets that the European Communities did not request an extension so as
to ensure that all the comments it deemed necessar y on precise aspects of the interim report be made
at the procedural stage of the dispute settlement process intended for that very purpose.
6.16 The Panel also notes that some of the EC comments are general statements on whole sections
of the report, not a written request for the Panel to review precise aspects of the interim report. We
recall that the panel in Australia – Salmon216 stated as follows:
"According to Canada, it is not open to the Panel to consider anything other than
comments dealing with 'precise aspects' of th e interim report. We agree with Canada
and have therefore only reviewed our interim report in light of the comments made by
the parties which relate to 'precise aspects' of the interim report."
6.17 We agree with the reasoning of the above-menti oned panel and therefore consider that the
general comments by the European Communities did not require a specific reply from the Panel. We
limited our replies to the portions of the report on which specific comments, in the form of precise
requests for reconsideration of specific paragraphs, had been made by the European Communities. We
addressed the EC general comments as part of our review of specific paragraphs.
2. Parties' requests for review related to aspects of the report on procedural issues
(a) Comments by the European Communities
6.18 The European Communities considers the Panel' s reference to Article 17.10 of the DSU in
paragraph 7.48 of the interim report is unnecessar y and potentially detrimental as implicitly
suggesting that the Appellate Body could be legall y barred by Article 17.10 of the DSU from opening
its own hearings to public observation. The Eu ropean Communities requests that we remove that
paragraph from our findings. We note that a si milar request was made by Canada. Since this
reference was only an additional argument, we accepted the parties' requests and removed our
discussion of the term "proceedings" in Article 17.10 of the DSU.
6.19 The European Communities considers that the description of IARC contained in
paragraph 7.76 footnote 370 is incomplete. It refers to Dr. Cogliano's statement in Annex G,
paragraph 541. In paragraph 541, Dr. Cogliano essentially say s that IARC monographs simply
indicate which substances are carcinogenic or are probably not carcinogenic to humans. Monographs
identify occurrence (i.e. exposure to a chemical through some particular pathway), but not the specific
level of exposure for a particular population. Dr. Cogliano also says in paragraph 541 that different
decision-making authorities will decide whethe r the evidence contained in IARC monographs
sufficiently supports an SPS decision or whether they need to conduct further analysis. Thus it seems
that IARC monographs provide information and serve in risk assessment. This said, the text in the
footnote is a verbatim quote from the IARC website, d escribing what IARC does. Thus the Panel did
not deem it necessary to augment the footnote.
6.20 The European Communities argues that the second sentence of paragraph 7.83 does not
reflect reality, since the European Communities di d not agree with the final decision on Working
Procedures for Consultation with Scientific and/or Technical Experts adopted by the Panel. The Panel
notes that, in a letter of 3 November 2005, the Eu ropean Communities commented on the draft expert
working procedures. One of the comments was that the experts should act as a single expert review

216 Panel Report on Australia – Salmon, para. 7.3.

group in order to provide a consistent advice on the issues concerned. The European Communities
also suggested that the experts should be independent from the industry or regulatory bodies which
had a vested interest in the issue on which they would be consulted. The Panel rejected the EC
request that experts should act as a single review group in its letter sent to the parties on
25 November 2005, together with its finalized Wo rking Procedures for Consultation with Scientific
and/or Technical Experts. We therefore modified paragraph 7.83 to reflect the absence of full
agreement of the European Communities on the Pa nel's Working Procedures for Consultation with
Scientific and/or Technical Experts.
6.21 The European Communities further requests us to redraft the fourth sentence of
paragraph 7.83 to reflect better its concerns that tw o of the experts selected by the Panel participated
in the preparation and drafting of the JECFA risk assessment of the hormonal substances at issue in
this case, with which the EC risk assessment disagrees. The Panel sees no problem in clarifying the
nature of the work of these two experts with JECFA It remains however puzzled by the EC
suggestions that a scientist who worked with JECF A could be deemed to be biased in assessing the
scientific evidence on which EC Directive 2003/ 74/EC relies and could be assumed to defend
JECFA's work. First, scientists would readily admit that science is constantly evolving and the fact
that new studies are peer revi ewed is evidence that assessing new ideas and findings is part of
scientific work. Assuming that scientists may lack objectivity because they participated in the
preparation and drafting of JECFA's risk assessments on the hormones at issue would call into
question the whole principle of peer review. The Panel also agrees with Canada in its comments on
comments of 19 October 2007 that JECFA is the body that provides the independent scientific advice
on which the work of Codex is based and Codex is expressly recognized by the SPS Agreement as
having responsibilities for the establishment of "international standards, guidelines and
recommendations". The Panel also recalls the role given to international standards, guidelines and
recommendations by Article 3.1 and 3.2 of the SPS Agreement. It is therefore consistent with this role
for the Panel to rely on experts who contributed in the preparation and drafting of JECFA's risk
assessments of the substances at issue.
6.22 The Panel does not agree either with the EC ar guments according to which the two experts at
issue should not be described as "internationall y recognized specialists". The Panel notes the
arguments of Canada in this regard in its comment s of 19 October 2007. The Panel recalls that these
two experts have been selected by the FAO and W HO as part of the JECFA selection process. The
selection procedure has been described in JECFA' s reply to question 14 of the Panel to JECFA.
217
The Panel fails to understand why the JECFA selec tion would not be evidence of the international
reputation of the scientists at issue. 218 The EC concerns about JECFA's work and the selection of
experts to participate in that work are in c ontradiction with the role attributed by the SPS Agreement
to Codex and to international standards, guidelin es and recommendations. The Panel was fully aware
of the area of expertise of the two scientists at issue, and believed that they would be more at liberty to
comment on the content of JECFA's work than official s of the JECFA Secretariat. It also specified
the reasons why those experts were selected in spite of their not having carried out experiments with
the substances at issue and does not see any need for further substantial elaboration. The Panel has
nevertheless made some clarifications, in response to the EC request, to paragraph 7.83.
6.23 The European Communities requests that we modi fy the first sentence of paragraph 7.85 to
better reflect the content of its letter of 28 March 20 06. We consider that the letter largely reiterated
points which the Panel already addresses in paragraph 7.83, i.e. the involvement of experts in the
preparation and drafting of JECFA's risk assessments and their alleged lack of scientific expertise.
Besides this, the EC letter of 28 March deals exclusiv ely with conflict of interest, which is the subject

217 Annex E-2, pp. 115-116.
218 See also Dr. Boobis, Annex G, para. 511; Dr. Tritscher, Annex G, para. 515; Dr. Wennberg,
Annex G, para. 517.

addressed by the Panel in paragraph 7.85. While th e Panel has modified the paragraph to reflect the
fact that the EC letter addressed other issues alre ady discussed in this report, it did not deem it
necessary to modify the rest of the paragraph, excep t to clarify the elements on the basis of which the
Panel considered that the experts concerned shoul d be deemed to be the best among the very few
individuals available.
6.24 Having reviewed the EC comments on pa ragraph 7.87 of the interim report , the Panel agrees
that this paragraph did not directly relate to the i ssue of the alleged conflict of interest of two of the
experts consulted by the Panel and has deleted it.
6.25 The European Communities argues that th e statements in paragraph 7.115 and footnote 388
are not accurate as some of the subsequent evidence did expand and confirm the scientific basis of
Directive 2003/74/EC. The European Communities refers to the replies of Dr. Guttenplan and
Dr. Sippell. In paragraph 7.115 and footnote 388, the Panel states that nothing new was submitted
after the adoption of Directive 2003/74/EC that differed in any fundamental way from previous
evidence. This is not contradicted by the EC comment that subsequent evidence expanded and
confirmed the scientific basis of its Directive, incl uding the EC reply to question 5 of the Panel after
the second substantive meeting. 219 The statements of Dr. Guttenplan referred to by the European
Communities220 do not support the EC argument. Dr. Sippell mentions in paragraph 611 of Annex G
that he changed his opinion on exposure to e xogenous oestrogens and precocious puberty because the
acceptance of the significance of th e ultrasensitive assays within paediatric endocrinology increased
tremendously after he publ ished his review article in 1999. Ho wever, the ultrasensitive assays he is
referring to were not carried out or published after the adoption of Directive 2003/74/EC. In his
written replies221, where he discusses the ultrasensitive a ssay techniques, Dr. Sippell refers to Klein et
al (1994) and Larmore et al (2002) and other studies dated 1999 or 2001. As a result, in the opinion
of the Panel, the statement of Dr. Sippell cited by the European Communities is not about evidence
that became available after the adoption of the Di rective. Consequently the Panel did not modify
paragraph 7.115 and footnote 388.
6.26 The European Communities also argues with resp ect to paragraph 7.116 that it had reserved
its right to submit the finally published version of the study contained in Exhibit EC-107. According
to the European Communities, this study was submitt ed in time and should have been accepted. The
Panel notes that, when it submitted Exhibit EC-107 on 21 December 2005, the European
Communities specified that it "reserve[d] its right to s ubmit further evidence, if and to the extent this
appears necessary for the purpose of commenting on any further submissions by the other parties as
well as on replies of the panel's experts". The Pane l does not read this reservation as reserving the EC
right to submit the finally published version of th e study. Moreover, the Panel recalls that the
European Communities stated that it left it to the discretion of the Panel whether to forward the
published version to the experts. 222 The Panel considers that it suffici ently explained in its report the
reasons why the published version of this study had not been sent to the experts. In particular, it
considered that submitting a modified study to e xperts at a relatively late stage of the expert
consultation proceedings could generate confusion.
6.27 The European Communities also considers with respect to paragraph 7.124 that the Panel
should accept that the European Communities submit the comments it wished to make in relation to
some factual errors made by the United States 223 in its replies to the Panel questions posed after the

219 Annex C, pp. 5-7.
220 Annex G, paras. 709 and 713.
221 Annex D, para. 319.
222 See EC's letter to the Panel of 29 May 2006.
223 Since the original request of the European Co mmunities related to alleged factual errors in
comments from the United States and Canada, and since the European Communities requests that we review

second substantive meeting. The Panel considers th at its decision was clear. If inaccuracies resulting
from US factual arguments had been reflected in the interim report, the European Communities could
have identified them in its comments or in its comments on comments. There does not seem to be any
need for the Panel to reverse its decision of 20 November 2006.
6.28 The European Communities al so alleges, with resp ect to paragraph 7.126 et seq., that one
paragraph was added to the transcript of the experts' hearing annexed to this report compared with the
version sent to the parties in January 2007. Ther e are, indeed, more paragraph numbers. However,
there is no additional text in Annex G as compared to the version sent to the parties in January 2007.
In fact, the difference results from a correction to the paragraph numbers of the transcript. In the
version sent to the parties for comments, there was a paragraph between paragraphs 29 and 30 that did
not have a number. This paragraph became the new paragraph 30 in the final version of the transcript,
and as a consequence, all the other paragraph numbers shifted by one. On the same subject, two more
changes were made in paragraph numbers: paragraph 827 of the draf t transcript was divided into two
paragraphs, following a comment by the United States 224, and became paragraphs 828 and 829 in the
final version of the transcript. Finally, another paragraph lacked a number, between paragraphs 926
and 927. This paragraph corres ponded to a short statement by Dr. Boisseau clarifying that he had
asked a question to Dr. Boobis, not to the Eur opean Communities. This unnumbered paragraph
became paragraph 929. In conclusion, three add itional paragraph numbers we re added in the final
version of the transcript compared to the draft ve rsion sent for comments to the parties. The draft
version had 1069 numbered paragraphs; the final version has 1072 numbered paragraphs.
6.29 The European Communities also seems to request, with respect to paragraph 7.135 , that the
Panel specify the nature of the "editorial adjustme nts" made in the transcript. The Panel deems it
appropriate to recall that the tapes of the meeting of the Panel with the experts were given to a typist
who transcribed them. Two types of editorial adjust ments were made to the transcript. First, the
Secretariat proofread the transcript, identifying any words or passages the typist had misunderstood
and checking these passages against th e tapes. The type of errors identified were limited to
confusions regarding technical terms (e.g. "N-point" instead of "endpoint"; "safe defactual" instead of
"safety factor" 225 or "defactual threshold" instead of "de facto threshold" 226 ). Other corrections
involved minimal adjustments to sentences, for ex ample to remove repeated words and occasionally
adding punctuation marks. Once these corrections we re made, the transcript was sent to the experts
and subsequently to the parties in order to give each speaker the chance to verify that his or her own
interventions had been accurately reflected. The experts' comments consisted of further corrections of
technical words which had been improperly transcribed, or corrections of word order or colloquial
expressions to make the transcript more legible. This is the reason why the Panel considered that
these corrections did not go beyond "minimal editorial adjustments".
(b) Comments by Canada
6.30 With respect to the discussion of the procedural question of the opening of the Panel meetings
with parties and experts for public observation, Cana da requests that we remove our discussion of the
term "proceedings" as it appears in Article 17.10 of the DSU. We note that the same request was
made by the European Communiti es. Since this reference was only an additional argument, we
accepted the parties' requests and removed our discu ssion of the term "proceedings" in Article 17.10
of the DSU.

paragraph 7.124 of this report, the Panel deemed it appr opriate to discuss this issue in this interim review
section.
224 See US's letter dated 14 February 2007.
225 Annex G, para. 422.
226 Annex G, para. 707.

6.31 Canada also requests that we modify paragraph 7.138. We see no reason not to adjust the
description of the measure since it is actually the absence of recourse to the DSU by Canada which
seems to be at the origin of the EC complaint. However, under the circumstances, we also deem it
necessary to specify that the issue stems from the fact that Canada maintained the measure after the
notification of Directive 2003/74/EC to the DSB and, accordingly, we have modified paragraphs 2.7
and 7.138.
6.32 Canada contests the conclusion of the Panel in paragraphs 7.149 and 7.151 that the European
Communities narrowed the terms of reference of the Panel through the approach it followed in its first
written submission. For Canada, the EC approach is a "choice of legal strategy" which is not binding
on the Panel. The European Communities cannot cons train the terms of reference of the Panel by
adopting a specific approach to its claims in its first written submission.
6.33 The Panel agrees that it is well established that a complainant cannot change the terms of
reference of a panel in its first submission or s ubsequently. As stated by the Appellate Body in EC –
Bananas III:
"If a claim is not specified in the request for the establishment of a panel, then a
faulty request cannot be subsequently 'cur ed' by a complaining party's argumentation
in its first written submission to the panel or in any other submission or statement
made later in the panel proceeding."227
6.34 However, the Panel does not believe that this is the issue in the pre sent case. The European
Communities did not try to cure a faulty request. It ma de its claims more specific. As the Panel itself
noted228, there could be several ways to find a violation of Article 23 of the DSU. The European
Communities has clarified how it considered that this violation should be approached by the Panel.
As stated by the Panel on EC – Tube or Pipe Fittings229:
"In our view, it is in the nature of the Pane l process that the claims made by a party
may be progressively clarified and refined throughout the proceedings."
6.35 The Panel also quotes the Appellate Body in US – Carbon Steel .230 It seems to be accepted
that complainants can clarify their claims througho ut the proceedings. In this instance however, it
appears that Canada is concerned by the conclusion of the Panel that it is bound by these clarifications
or that they are part of the Panel's terms of reference.
6.36 Panels are free to address claims in the order that they deem appropriate. 231 However, if a
party specifies in its first written submission that a claim is raised in the alternative, can a panel
disregard this clarification? To a lesser extent, can a panel disregard the fact that the complainant
addressed the violation of a given provision in a particular way? Regarding the first question, it seems
that panels should be bound by a claim made "i n the alternative", as acknowledged by the Appellate
Body.232 Regarding the second question, the reply mi ght be less clear and depend on the type of
"clarification" made by the complainant. In the present case, the EC clarification had serious
consequences on how the Panel could address the cl aims listed in the terms of reference. The
European Communities did not claim a violation of Artic le 23 in general, but a violation of Article 23
as a consequence of a breach of Article 22.8 of th e DSU. The Panel also notes the arguments of the

227 Appellate Body Report on EC – Bananas III, paras. 141-143; Appellate Body Report on US – Lead
and Bismuth II, paras. 72 and 73.
228 See para.7.159.
229 Panel Report on EC – Tubes and Pipes Fittings, para. 7.10.
230 See para. 7.148.
231 Appellate Body Report on Canada – Wheat Exports and Grain Imports, para. 126.
232 See, e.g., Appellate Body Report on EC – Selected Customs Matters, para. 308.

European Communities in its comments of 19 October 2007. The Panel recalls, in particular, that the
rights of the respondent or its ability to defend itself were in no way affected by the "narrowing" of its
claims by the European Communities. The Panel remains of the view that it is bound by the EC
approach to its claims and, accordingly, has not modified paragraph 7.149 or paragraph 7.151.
3. Comments of the parties regarding the Panel's findings of violation of Article 23.2(a)
read together with Articles 21.5 and 23.1 of the DSU and on the EC claims on
Article 23.1, read together with Articles 22.8 and 3.7 of the DSU
(a) Comments by the European Communities
6.37 The European Communities disagrees with th e interpretation the Panel makes, in
paragraph 7.153, as well as in paragraph 7.288, of the EC claims as set out in its first written
submission. The European Communities insists in its comments that "it did not argue [in its main
claims] that there was a violation of Article 22.8 itself, but rather one of Article 23.1". In other words,
the European Communities seems to suggest that the Panel should not have addressed the conformity
of Canada's measure under Article 22.8 of the DSU – even though this Article was listed in the EC
request for establishment of a panel – but only unde r Article 23.1. Yet, the European Communities
alleges a violation of Article 22.8 in various parts of its first submission and subsequently.233
6.38 In the opinion of the Panel, the use of the term "in conjunction with" or "read together with"
is not indicative that the European Communities only claims a violation of Article 23. In
Section III.E.3 of its first written submission, th e European Communities alleges a violation of
Article 3.7 even though in its conclusions it states that the United States' and Canada's unilateral
conduct "violates Article 23.1 of the DSU read in c onjunction with Article 22.8 and 3.7 of the DSU".
One cannot conclude either that the European Communities draws a conclusion of violation of
Article 22.8 from the violation of Article 23.1 since its allegation of violati on of Article 23.1 stems
from the obligation to withdraw the measure if th e violation has been removed. Rather, one must
conclude the opposite, i.e. that the European Communities draws a conclusion of violation of
Article 23.1 from a violation of Article 22.8. Fo r those reasons, the Panel does not agree with the
argument made by the European Co mmunities at the interim review stage that it never made a claim
of violation of Article 22.8 of the DSU, and that its claims related only to violations of Article 23.
6.39 The European Communities also contests the qua lifications made by the Panel of its second
series of main claims (i.e. its claims of viola tion of Article 23.1 of the DSU in conjunction with
Article 22.8 and Article 3.7 of the DSU) as cl aims "premised on compliance by the European
Communities with the DSB recommendations and rulings in the EC – Hormones case" in
paragraph 7.163. The Panel notes that it has clea rly explained in paragraphs 7.293-7.294 why it
believes that this claim was premised on complianc e with the DSB recommendations and rulings in
the EC – Hormones case.

233 See, for instance:
– EC's first written submission, para. 71: "Under Ar ticle 23.1 of the DSU, Canada is obliged to
have recourse to, and abide by, the rules and procedures of this Understanding. This
encompasses, inter alia, Articles 22.8 and 3.7 of the DSU";
– EC's first written submission, Section III.E.2, title: "The obligation not to apply suspension of
concessions or other obligations under Article 22.8 of the DSU";
– EC's first written submission, Section III:E.3, title: "Canada's violation of Article 23.1 and
Article 22.8 of the DSU necessary entails a violation of Article 3.7";
– EC's first written submission, para. 123: "For these reasons, Canada, by violating Articles
23.1, 22.8 of the DSU, also acted contrary to Article 3.7 of the DSU";
– EC's oral statement at first meeting, pa ra. 56: a "systemic claim under Article 22.8, in
conjunction with Article 23.1";
– EC's second written submission, para. 174.

6.40 Consequently, and having regard to Canada's comments of 19 October 2007, the Panel will
not delete the section of its report considering the allegedly non-existent EC claim under Article 22.8
of the DSU.
6.41 The Panel, however, deems it appropriate to clarify paragraph 7.163, and to make a
modification with respect to paragraph 7.357 in orde r to make clear that it is not reviewing the EC
claim of violation of Article 22.8 in isolation.
6.42 The European Communities also argues that, even though the obligation of the respondent
clearly emerges from the Panel's reasoning, the Pane l should clarify its recommendations. This could
be done either by removing from the findings any consideration of the second series of main EC
claims (i.e. its claim of violation of Article 23.1 of the DSU in conjunction with Articles 22.8 and 3.7
of the DSU) or, if necessary, through suggesti ons under Article 19.1 of the DSU, or through
clarifications in the Panel's reasoning. A somewhat similar request for clarification has been made by
the respondent in its request for review of precise aspects of the interim report. However, the
European Communities suggests that the Panel should cl arify that Canada must remove its suspension
of concessions, whereas Canada requests that we cl arify that our findings under Article 23.1 and
23.2(a) have been rendered moot by the current proceedings and the Panel's findings regarding
Canada's compliance with Article 22.8 of the DSU.
6.43 The Panel is mindful of its duty to assist the DSB in making recommendations or rulings
aimed at achieving a satisfactory settlement of the ma tter. The Panel notes that the parties have both
requested that the Panel make suggestions or conclu ding remarks aimed at clarifying what is expected
from Canada. The Panel notes, however, that thei r proposed suggestions or concluding remarks are
divergent. The Panel wishes to recall its conclusion in paragraph 7.244. Th is conclusion is based on
the terms of Article 23.1 and 23.2(a). Those provisi ons require that recourse should be had to "the
rules and procedures of the [DSU]" (Article 23.1) or, in the case of Article 23.2(a), that recourse be
had to "dispute settlement in accordance with the rules and procedures of this Understanding".
Moreover, for reasons explained in this report, the Panel does not believe that recourse by the
European Communities to dispute settlement exem pts the respondent from its obligations under
Article 23.1 and 23.2(a) of the DSU. The Panel has clarified this point in paragraph 8.3.
(b) Comments by Canada
6.44 The Panel accepted Canada's suggestion regarding paragraph 7.225.
6.45 Canada requests that we clarify our statement in the first sentence of paragraph 7.292 by
confirming that the present proceedings and the Panel's findings in respect of Article 22.8 of the DSU,
while technically not findings under Article 21.5 of the DSU, involve the same legal questions and
legal conclusions as a compliance panel under Artic le 21.5 of the DSU. While recognizing that,
indeed, its review of a breach of Article 22.8 by Canada involved in this case assessments resembling
those that could have been performed by an Article 21.5 panel called upon to review the compatibility
of Directive 2003/74/EC, the Panel notes a fundamental difference. The matter before it is not the
conformity of Directive 2003/74/EC, but the confor mity of the continued suspension of concessions
or other obligations by Canada vis-à-vis the European Communities. The fact that the European
Communities may have the possibility in practice to achieve, by initiating a panel procedure like the
present one, a result similar to that which coul d be achieved by Canada having recourse to
Article 21.5 does not exempt Canada from its obliga tion under Article 23 to have recourse to dispute
settlement. Moreover, there is no telling which claims would be brought by Canada if it had recourse

to Article 21.5 of the DSU. We also note the EC comments of 19 October 2007. 234 As a result, the
Panel does not deem it necessary to modify paragraph 7.292.
6.46 Canada requests that the Panel modify paragraph 7.358 so as to state that reviewing alleged
violations of the SPS Agreement falls within the Panel's mandate and constitutes an integral part of its
findings in this report.
6.47 The European Communities, in its comments of 19 October 2007 235 , disagrees with the
comments of Canada to the extent that, unlike in the case referred to by Canada where there was an
express reference to another provision in the article allegedly breached, there is no reference in the
term "removed" in Article 22.8 to any other provisi on. The European Communities considers that if
Canada's interpretation prevailed, the responding party would effectively be free to refer to any
provision of the covered agreements and the terms of reference would become meaningless.
6.48 The Panel considers that it has extensively explained why it believes that, while making
actual findings regarding the compatibility of the EC Directive 2003/74/EC with the SPS Agreement
is not part of its mandate, it h as jurisdiction to address the compa tibility of the Directive with the
SPS Agreement to the extent necessary to make findings in relation to Article 22.8 of the DSU, which
is part of its mandate. The Panel notes that this is part of its duty to make an objective assessment of
the matter pursuant to Article 11 of the DSU and a sentence has been added to that effect in the
findings.236 The Panel also believes that its approach is consistent with the scope of a panel mandate
as confirmed by the Appellate Body.
6.49 Moreover, the Panel considers that the Appellate Body report in Argentina – Footwear
(EC)237 does not support the view that the Panel coul d make actual findings with respect to the
compatibility of the EC measure with the SPS Agreement. First, the EC implementing measure
(Directive 2003/74/EC) is not part of the terms of re ference of the Panel. Second, the Appellate Body
report in Argentina – Footwear (EC) confirms the reasoning of the Panel:
"We have examined the specific paragraphs in the Panel Report cited by Argentina,
and we see no finding by the Panel that Argentina acted inconsistently with Article 3
of the Agreement on Safeguards . In one instance 238, the Panel referred to Article 3
parenthetically in support of its r easoning on Article 4.2(a) of the Agreement on
Safeguards. Every other reference to Article 3 cited by Argentina was made by the
Panel in conjunction with the Panel's reasoning and findings relating to Article 4.2(c)
of the Agreement on Safeguards. None of these references constitutes a legal finding
or conclusion by the Panel regarding Article 3 itself."239
6.50 In that case, the panel had reviewed Article 3 of the Agreement on Safeguards as part of its
review of Article 4.2(a), not as a finding on Article 3. Article 3 was not mentioned in the terms of
reference of the panel. The Appellate Body agreed w ith the panel that it had to consider Article 3. It
even concluded that it had an obligation to do so. But it also noted that the panel made no findings
under Article 3. Rather, its consideration of Article 3 was made in support of its reasoning on
Article 4.2(a).

234 Paras. 14-16.
235 Para. 21.
236 Para. 7.374.
237 Appellate Body Report on Argentina – Footwear (EC), paras. 74-75.
239 Appellate Body Report on Argentina – Footwear (EC), para. 73.

6.51 Finally, Canada requests a modification to para graph 8.2 and the addition of a new paragraph
confirming that the Panel's finding of a breach of Ar ticle 23.1 and 23.2(a) has been rendered moot by
the current proceedings and the Panel's findings re garding Canada's compliance with Article 22.8 of
the DSU. Regarding paragraph 8.2, having duly considered the EC comments on comments, we
nonetheless decided to replace the term "legislation" with the term "measure", consistent with
Article 19.1 of the DSU. Indeed, the measure at issue has been previously defined in
paragraph 7.138.
6.52 Regarding Canada's request for the addition of a new paragraph, we do not agree with Canada
that, through our comment in the first sentence of paragraph 7.350, we have recognized that recourse
to Article 21.5 of the DSU has become unnecessary by virtue of the current proceedings. What we
meant was that this dispute was an a lternative to a recourse to Article 21.5 by the European
Communities, not that it was an alternative to Ca nada complying with its obligations under
Article 23.1 and 23.2(a) of the DSU. We have clarified this point in paragraph 8.3.
4. Comments of the parties on the compliance of the EC ban on meat and meat products
treated with the six hormones at issue for growth promotion purposes with the
SPS Agreement in relation to the Panel's findings on the EC claims on Article 23.1, read
together with Articles 22.8 and 3.7 of the DSU
(a) Comments by the European Communities
(i) Introductory comments
6.53 In an introduction to its specific comments, the European Communities alleges:
(a) that the Panel has dismissed the 1999, 2000 and 2002 Opinions as not constituting a
proper risk assessment based on an alleged absence of specific evidence which, the
European Communities claims, is impossible to provide;
(b) that the Panel dismissed the Opinions as not having presented sufficient evidence to
call into question the conclusions of JECFA;
(c) that the Panel should have scrutinized JECFA's evaluations, which are based on old
studies which were not publicly available a nd were not communicated to the Panel or
the Panel's experts for review;
(d) that the Panel has reached its conclu sions on the EC implementing measure
(Directive 2003/74/EC) by relying selectively, for a number of important issues, on
the statements of two experts in a group of six. The European Communities recalls
that those two experts had participated in the drafting of the JECFA's assessments
contradicted by the EC Opinions and we re obviously defending their own work and
the methodology applied by JECFA and Codex. Comparatively, the other four experts
had overall validated and supported the conclusions of the EC Opinions; and, finally,
(e) that the Panel's methodology and reasoning are contrary to established principles on
burden of proof and standards of review of genuine scientific questions by WTO
panels and ordinary courts of law.
6.54 Regarding the argument under (a) above, the Panel will address this question when it
addresses the EC comments on the Panel' s findings under Article 5.1 of the SPS Agreement. As a
preliminary remark, however, the Panel wishes to clarify that it did not "dismiss the opinion of a
relevant committee constituted of highly regarded , independent scientific experts". The Panel

concluded that the European Communities had not evaluated specifically the possibility that the
adverse effects related to the association between excess hormones and neurobiological,
developmental, reproductive and im munological effects, as well as immunotoxicity, genotoxicity and
carcinogenicity coming into being, originating or resulting from the consumption of meat or meat
products which contain veterinary residues of oestradiol-17β as a result of the cattle being treated with
this hormone for growth promotion purposes. Th e Panel also found that the scientific evidence
referred to in the Opinions does not support the EC conclusions on genotoxicity, or the conclusion
that the presence of residues of oestradiol-17 β in meat and meat products as a result of a cattle being
treated with this hormone for growth promotion purposes leads to increase cancer risk. Nor does the
scientific evidence support the EC conclusions a bout the adverse immunologi cal and developmental
effects of consuming meat and meat produc ts from cattle treated with oestradiol-17 β for growth
promotion purposes. This does not put into ques tion the results of the studies and research relied
upon by the SCVPH, nor the conclusions reached by the scientists, but simply the conclusions drawn
by the European Communities on the basis of the science.
6.55 Regarding the argument under (b) above, it is co rrect that the Panel considered that, in order
to determine whether relevant scientific evidence was insufficient within the meaning of Article 5.7 of
the SPS Agreement, it had to take the results of the risk assessments made by JECFA as a
"benchmark" of the existence of suffi cient scientific evidence. This is in line with the findings of the
Appellate Body in Japan – Apples that the relevant scientific evid ence will be insufficient within the
meaning of Article 5.7 if the body of available scien tific evidence does not allow, in quantitative or
qualitative terms, the performance of an adequate assessment of risks as re quired under Article 5.1
and as defined in Annex A to the SPS Agreement240, as well as with the presumption of compliance
under Article 3.2 of the SPS Agreement.
6.56 As far as the argument under (c) is concerned, the Panel explained in its findings why it relied
on JECFA's work without questioning it. 241 First, using JECFA's risk assessments as "benchmarks"
did not mean that the Panel had to examine the scientific evidence supporting JECFA's conclusions.
Second, none of the parties contested that JECFA and Codex work on the hormones at issue (with the
exception of MGA) constitute international standa rds, guidelines and recommendations within the
meaning of Article 3.2. Because sanitary meas ures which conform to international standards,
guidelines or recommendations are deemed to be consistent with the provisions of the SPS Agreement,
the Panel had no reason to scrutinize the evaluation ma de by JECFA. The only benefit of such an
evaluation would have been to determine whethe r JECFA's risk assessment met the conditions of
Article 5.1. However, the question before the Pane l is not to review the validity of international
standards – the Panel has no mandate to do that. It is not to review whether JECFA's risk assessments
are compatible with Article 5.1, but whether the EC implementing measure is compatible with
Article 5.1 as far as oestradiol-17 β is concerned or justified unde r Article 5.7 for the other five
hormones at issue. The Panel also notes in this respect that, whereas Members have, pursuant to
Article 3.3, a right to introduce or maintain sanitary measures which result in a higher level of sanitary
protection than would be achieved by measures b ased on the relevant international standards,
guidelines and recommendations, the way to do this is not by seeking to demonstrate that those
standards, guidelines and recommendations are flawed or outdated, which would simply show that
they have become insufficient and would not ju stify the EC measure, but by providing positive
evidence or information supporting the conformity of the measure at issue with Article 5.1 and/or
Article 5.7. It was, thus, for the European Communities to provide convincing evidence, in line with
the requirements of Article 3.3 of the SPS Agreement, to justify its definitive ban on oestradiol-17 β
and that relevant scientific evidence was insufficient for the other five hormones.

240 Appellate Body Report on Japan – Apples, para. 179.
241 Paras. 7.621-7.625.

6.57 Regarding the argument according to which th e two experts involved in the drafting of
JECFA's risk assessments were defending their ow n work and the methodology applied by JECFA
and Codex, the Panel wishes to add to what it has already said above that, since JECFA's risk
assessments were used as the reference risk assessments for purposes of the analysis under Article 5.7
of the SPS Agreement, it was necessary for the Panel to be able to rely on the advice of experts
intimately knowledgeable about the su bstance of JECFA's risk assessments.
242 The purpose was not
to check whether JECFA's risk assessments were supported by sufficient scientific evidence or carried
out in accordance with Article 5 of the SPS Agreement, but to identify to what extent the concerns
raised by the European Communities in its submissions had been considered in the development of its
risk assessments by JECFA (e.g. how the risk to pr epubertal children had been taken into account by
JECFA). Second, the Panel recalls that JECFA is an international, indepe ndent entity composed of
highly qualified experts selected by the WHO or FAO according to strict procedures. 243 JECFA also
regularly reassesses its risk assessments, normally at th e request of Members of Codex, and evidence
before the Panel suggest that the European Co mmunities did not request JECFA to reassess the
hormones at issue on the basis of the new evid ence it had gathered. Instead, the European
Communities relied on its own risk assessment. Moreover, JECFA reaches its conclusions by
consensus. So the opinions expr essed by the two experts were given with regard to the consensual
view of JECFA on this matter, not just their own personal positions in the past. This does not mean,
however, that JECFA's work is these particular expe rts' own work: it is a joint work by several
experts. The experts that the European Communitie s claims were defending their work acknowledge
that the state of knowledge can evolve. For instance, Dr. Boobis stated that:
"[S]cience moves on, and it would be co mplacent for a risk assessment body to
assume that it knew everything about a substance at a particular point in time. We
have to work within the available information, and the question we ask is: do we have
sufficient information at this point to conduct a risk assessment? – not: is the data
complete and are there no scientific questions remaining to be answered."244
6.58 The experts consulted by the Panel are used to considering and peer reviewing studies that go
beyond what they have published themselves or perhap s even contradict them. In other words, they
are not likely to feel any need to defend their ow n previous work results in the light of new,
convincing evidence or techniques that put such prev ious work into doubt. The Panel also notes that
other experts referred to JECFA's work in their replies, just as they also referred to studies
commissioned by the European Communities.245
6.59 The European Communities also argues that the remaining four experts "overall validated and
supported the conclusions of the [SCVPH] Opinion[s]". The Panel does not share this point of view.
First, not all experts expressed their views on all the issues. The experts who expressed their views
often agreed with each other. Second, the impressi on that a majority of experts overall validated and
supported the conclusions of the SCVPH Opinions is incorrect. With respect to the five provisionally
banned hormones, to different degrees, the experts agreed that new studies would be useful. This
does not mean, however, that they considered them useful for the reasons a dvocated by the European
Communities. The four experts agreed regarding the hazard related to hormones, or the risk attached
to high doses. But so did the two experts with JECFA experience.

242 In order to assess the appropriat eness for the Panel to seek advi ce from experts involved in the
preparation of JECFA's risk assessment, it is also importa nt to recall that the experts are being consulted in the
context of an assessment of the EC implementing measure under Articles 5.1 (and accessorily 5.2 in
WT/DS320), 5.7 and 3.3 of the SPS Agreement, and of the presumption of conformity with the SPS Agreement
of measures based on international standards.
243 JECFA's reply to question 14 of the Panel. See also Dr. Boobis, Annex G, para. 511; Dr. Tritscher,
244 See Annex G, para. 346.
245 See, e.g. Dr. Guttenplan, Annex D, para. 145.

6.60 As to the argument that the Panel's methodol ogy and reasoning are contrary to established
principles on burden of proof and standards of review of genuine scientific questions by WTO panels
and ordinary courts of law, the Panel wishes to recall its findings at pa ragraphs 7.377-7.383 and
7.403-7.418 on the standard of review and burden of proof. The Panel has also explained why it gave
particular relevance to JECFA's risk assessments and why, to the extent that the European
Communities disagreed with JECFA, it had to prove that its measure was based on a risk assessment
consistent with Article 5.1 and Annex A(4) of the SPS Agreement, or that the relevant scientific
evidence was insufficient.
6.61 The European Communities argues that the statement originally found in paragraph 7.368 was
not accurate as the European Communities was alle gedly replying to a hypothetical question and
stated that it was not necessary to lo ok into the scientific issues. Th e Panel notes that the European
Communities stated in its reply to question 74 of the Panel 246 that "it did not believe that it [was]
necessary to look into the scientific issues". The European Communities did not formally object to
the Panel seeking scientific opinion even if the Panel proceeded with reviewing the SPS Agreement.
Indeed, the European Communities added in its reply to the same question 74:247
"However, the European Communities does not believe that the Panel would have the
expertise to decide on such issues itself, should the Panel decide to go down [the
road] of deciding the scientific issues at st ake. In such a scenario, the European
Communities believes that the consultation of scientific and technical advice would
be absolutely necessary."
6.62 The European Communities argues th at it was replying to an hypothetical question. Yet, the
European Communities uses the affirmative and not th e conditional in its reply when it states that
"New experts will have to be chosen". 248 The Panel concludes that, whereas the European
Communities was not of the view that it was n ecessary to look into the sci entific issues, it was
nevertheless in favour of the consultation of scien tific experts if the Panel decided to address the
scientific issues at stake. Paragraph 7.368 was modified accordingly.
6.63 The European Communities suggests that the Panel contradicted itself in paragraph 7.371
when it stated, on the one hand, that parties had had sufficient opportunity to comment on the other
party's allegations and, on the other hand, in paragraph 7.124, refused to allow the European
Communities clarify the nature of a number of fact ual errors allegedly made by the United States and
Canada. In paragraph 7.124, th e Panel took the view that the European Communities should not be
allowed to make further comments, lest the other parties would also comment and this would launch
an endless exchange of arguments. The Panel not es that parties were allowed to comment on the
experts' responses and to comment on the comments of the other party. In addi tion, the parties were
allowed to comment on each other's replies to the questions of the Panel after the second substantive
meeting. This is fully consistent with usual panel procedures. Mo reover, the European Communities
could correct any factual error appearing in the interim report by requesting the Panel to review
precise aspects of the interim report, if the allege dly erroneous information provided by the United
States and Canada had been used in the findings. Th e Panel notes that the EC request to correct some
factual statements made by the other parties was lim ited to factual aspects, not to legal issues such as
allegations of inc onsistency with the SPS Agreement, which was the subject of this paragraph. The
Panel nonetheless decided to clarify paragraph 7.371.

246 EC's replies to Panel questions after the first substantive meeting, Annex B, para. 274.
247 EC's replies to Panel questions after the first substantive meeting, Annex B, para. 275.
248 The Panel also notes that the European Communities made an alternative claim of violation of
Article 22.8 of the DSU and Articles I and II of the GA TT 1994, in isolation from its claim under Articles 23.1
and 3.7 of the DSU which was based on an allegatio n of actual compliance with the recommendations and
rulings of the DSB in the EC – Hormones case.

6.64 The European Communities argues that, in para graphs 7.373-7.374, the Panel states that its
approach was a "pragmatic solution" and the "most l ogical way forward" without further explanation.
The European Communities considers that the appr oach of the Panel is arbitrary and negatively
affects the interests of the parties and reverses existing case law and established practice. The Panel
first notes that the European Communities doe s not specify which "existing case law" and
"established practice" it refers to, and that it does no t make any reference to its previous submissions.
Second, the Panel notes that these paragraphs c ontain only additional arguments. The Panel has
amply justified its decision to address the compa tibility of the EC implementing measure with the
SPS Agreement throughout the preceding paragraphs. Th e Panel also explains the reason why it
follows this approach in paragraph 7.374, emphasi zing the need to assist the parties and the DSB in
solving this dispute and the need to determine whether there is a violation of Article 23.1 in
conjunction with Article 22.8 and Article 3.7 of th e DSU. The Panel's choice was directed by the
requirement to make an objective assessment of th e matter before it, in accordance with Article 11 of
the DSU, having regard to the particular circumstan ces of this case, as recalled in Section VII.C.2.(a)
of this report.
6.65 The European Communities stat es that paragraph 7.401 and footnote 506 are factually
inaccurate. This comment can only relate to and be limited to the refusal of the Panel to let the
European Communities correct alleged factual errors in the comments of Canada and the United
States on the EC replies to the questions of the Pane l after the second substantive meeting. First, the
European Communities never identifie d the factual errors at issue. Second, the Panel explained its
position in its letter of 20 November 2006. The Panel recalls that it followed the standard practice of
panels in terms of procedure, allowing comments on replies to the questions of the Panel. The Panel
felt justified in not allowing further comments. Th e Panel stressed that the European Communities
could address these factual errors at the interim review stage, if they were reflected in the findings of
the Panel. It appears that the European Communities did not take advantage of this opportunity as no
such factual corrections were made. Thus , the Panel sees no reason to correct paragraph 7.401 and
footnote 506.
6.66 The reference to Article 5.2 of the SPS Agreement in paragraph 7.434 has been removed.
6.67 The European Communities argues, with resp ect to paragraph 7.411, that the Panel
misconstrued its role by engaging in settling a scien tific debate and arbitrating the opinions expressed
by the scientific community by "picking and choosin g" from individual replies of experts without any
valid explanation. The Panel explained in its find ings in paragraph 7.69 why it deemed it preferable
to consult experts individually. The Panel had al so explained in its letter to the parties of
25 November 2005 how it understood its role in terms of assessment of scientific opinions. The Panel
believes that weighing the scientific evidence before it was necessary to reply to the two main legal
questions in relation to the SPS Agreement, i.e. whether the European Communities had performed a
risk assessment within the meaning of Article 5.1 for oestradiol-17 β and if the relevant scientific
evidence was sufficient within th e meaning of Article 5.7 as far as the other hormones were
concerned. In fact, the Appellate Body confirme d the discretion of Panels in weighing evidence in
EC – Asbestos .249 This is also part of the role of panels under Articles 11 and 13 of the DSU. The
Panel also considers that the role of the experts was to act as an "interface" between the scientific
evidence and the Panel, so as to allow it to perform its task as the trier of fact. If panels were not to
weigh the scientific evidence before them, then the DSU would have mandated the recourse to experts
review groups. The Panel also notes that the Appellate Body took the view in EC – Hormones , that
both the SPS Agreement and the DSU leave to the discretion of a panel the determination of whether
the establishment of an expert review group is necessary or appropriate. 250 The Panel explained its
approach in detail in paragraph 7.411 and thus does not believe that it engaged into "picking and

249 Appellate Body Report on EC – Asbestos, para. 161.
250 See para. 7.72.

choosing" without any valid explanation. The Pane l notes that some replies to its questions were
more detailed than others and supported by bibliogr aphical references. The Panel believes that, in
case of divergence of opinions between the experts, and having due regard to the comments of the
parties and the clarifications provided by the expe rts at the meeting with the Panel, it was a sound
approach to take into account, in forming its own opi nion, the opinions that were the most precise and
elaborate. Therefore, having also considered the comments of the respondent of 19 October 2007, the
Panel did not deem it necessary to revise paragraph 7.411.
6.68 The European Communities considers that, in pa ragraphs 7.414-7.418, the Panel missed the
point made by the European Communities, namely that neither the United States, Canada nor JECFA
have provided conclusive proof that the methods used to generate the outdated evidence on which
they based and continue to base th eir risk assessment were validated. The Panel first notes that the
paragraphs at issue are part of an introductory section, not one where the validity of the evidence
actually relied upon by JECFA is being discussed. S econd, the purpose of the discussion contained in
the paragraphs at issue is clearly stated in para graph 7.418. The point made by the Panel is that a
study is not ipso facto irrelevant because it is old. The Panel makes two points in paragraph 7.418: (i)
that accuracy is a problem when one is at the limits of detection of the older methods and (ii) that in
any event an essential question is whether a given method has been validated.
6.69 Second, the European Communities' comment rais es the question whether there is a need for
the United States and Canada to prove that JECFA' s risk assessments were based on validated studies.
In the opinion of the Panel, this is not a question that needs to be addressed in order to resolve this
dispute. JECFA's risk assessments were used as the bases for Codex recommendations which are,
pursuant to Article 3.1 and Annex A(3) of the SPS Agreement, "international standards, guidelines or
recommendations". Pursuant to Article 3.3, it is for the WTO Member wishing to introduce or
maintain sanitary measures which result in a higher level of sanitary protection than would be
achieved by measures based on the re levant international standards, guidelines and recommendations
to provide scientific justification in support of such measures. In that context, the question before the
Panel is not whether JECFA's risk assessments were based on validated studies 251, but whether the
European Communities' permanent ban on meat and meat products containing veterinary residues of
oestradiol-17β derived from cattle treated with this hormone for growth promotion purposes is based
on a risk assessment within the meaning of Artic le 5.1 and, for the five provisionally banned

251 The Panel did not use the quotation from Dr. Wennberg in paragraph 7.417 to argue that JECFA's
studies were actually validated, but to stress that if a study used a validated method, there is no reason to reject it
simply because it is old. The problem with some of the more recent studies on which the European Communities
relies is that they have not been validated. The Europe an Communities also refers to statements of Dr. De
Brabander (Annex G, paras. 670, 675, 681 and 687) and Dr. Sippell (Annex G, para. 689). The Panel
understands from Dr. De Brabander's comments that there would be reasons to re-do certain assessments, inter
alia because the separation power of components has incr eased considerably since th e 1980s (see para. 681).
However, the Panel notes that Dr. De Brabander insists on the fact that one cannot say that the "old" data are not
correct on not valid un til they are checked with modern analytical methods, which, according to him, has not
been done. Dr. Sippell states that, for infant a nd young children, a standard commercially available
radioimmunoassay is not able to pick up the real concentrations, because there are numerous other cross-
reacting steroids. Dr. Sippell concludes that "one should really look at the new data". Whereas this statement
suggests that old data are not valid, Dr. Sippel stops short of formally concluding that they are not valid. We
also note Dr. Boobis' comment following Dr. Sippell's intervention (Annex G, para. 691):

"I would make the point that a method that is used to measure low levels of oestrogens in
infants is a different question from a method that is being used to measure residues in food.
The analytical challenges are quite different and the methods that were developed in the 1980s
for the residues were fit for that purpose, and that is what they were used for. If you ask the
question about the circulating concentrations, that is a different issue. So in terms of residues
the methods were suitable."

hormones, whether there exists validated studies that sufficiently put into question the evidence on
which JECFA's risk assessments are based, so as to s upport a conclusion that the relevant scientific
evidence is insufficient to permit the assessment of risk.
(ii) General comments on the Panel's analysis regarding oestradiol-17β
6.70 The European Communities argues that the use of the term "measure" in paragraphs 7.432
and 7.490 to describe the Panel's function is unfor tunate because "it is clear that a panel does not
measure anything (which implies that there is something quantitative to measure), but simply
examines the conformity of the measure with the relevant provisions." 252 The Panel notes that it used
the term "measure" in the sense, as defined by the Oxford English Dictionary, to "judge or estimate
the greatness or value of (a person, a quality, et c.) by a certain standard or rule; appraise by
comparison with something else." 253 The Panel believes that judging or appraising something, in this
case the SCVPH Opinions, against a certain standard or rule, in this case Article 5.1 and Annex A(4)
of the SPS Agreement, is precisely examining the conformity of the measure with the relevant
provisions. Therefore, the Panel will not change the term. However, the Panel wishes to clarify here
that it did not intend to use the term "measure" to imply any sort of quantitative analysis.
6.71 The European Communities also st ates that it did not understand the Panel's use of the term
"objective measures" in the paragraph of the inte rim report corresponding to paragraph 7.432. The
European Communities correctly points out an error in the paragraph. The fourth sentence should
read "The Panel must objectively measure the Opini ons against the relevant standard for whether a
risk assessment has been conducted, which can be found in the texts of Articles 5.1 as well as
Annex A(4) of the SPS Agreement." Again, the Panel notes that it is using the term "measure" in the
sense of a qualitative appraisal of the SCVPH Opini ons against a standard or rule, namely the
SPS Agreement.
(iii) Comments on "risk assessment techniques"
6.72 The European Communities argues that the discussion by the Panel of risk assessment
techniques in paragraphs 7.435-7.459 is irrele vant and unnecessary give n that no relevant
international risk assessment techniques for veterinary drug residues have been agreed upon.254
6.73 The Panel notes that Article 5.1 requires that Members take into account the risk assessment
techniques of the relevant international organi zations when ensuring that their sanitary and
phytosanitary measures are based on a risk assessment. Therefore, the Panel believes that an analysis
of whether such techniques exist and whether th e European Communities took them into account is
necessary and appropriate to an analysis of wh ether the European Comm unities has removed the
previously found inconsistency of its ban on the importation of meat and meat products treated with
oestradiol-17β for growth promotion purposes with Article 5.1 of the SPS Agreement.
6.74 The Panel notes in paragraph 7.438 that no specifi c techniques or guidelines has thus far been
formally adopted by Codex for use by nationa l governments in conducting risk assessments of
veterinary drug residues. However, there are relevant definitions of the phases of a risk assessment as
well as guidelines and practices for conducting a risk assessment in the general sense and the Panel,
therefore, analyses whether th e European Communities took these into account when it adopted
Directive 2003/74/EC.

252 EC's comments on interim report, para. 50.
253 Shorter Oxford English Dictionary, 5th edition (1993), p. 1730.
254 EC's comments on interim report, para. 51.

6.75 The European Communities also argues that these passages convey the erroneous message
that the concept of risk assessment as defined in the SPS Agreement is the same as in Codex
Alimentarius.255
6.76 The Panel is surprised by this comment, because it states in paragraph 7.457:
"[T]he Panel must concur with the reasoning of the panel in Japan – Apples, that the
requirement to "take into account" the ri sk assessment techniques of international
organizations:
'[D]oes not impose that a risk assessment under Article 5.1 be 'based
on' or 'in conformity with' such risk assessment techniques. This
suggests that such techniques should be considered relevant, but that
a failure to respect each and every aspect of them would not
necessarily, per se , signal that the risk assessment on which the
measure is based is not in conformity with the requirements of
Article 5.1.'"
256
6.77 The Panel finds that this quotation adequately conveys the Panel's opinion that although the
risk assessment techniques of the relevant interna tional organizations must be considered by the
Members, they are not binding on Members and that not following them would not necessarily lead to
the conclusion that the risk assessment did not co nform with Article 5.1 and Annex A(4) of the
SPS Agreement. However, to avoid confusion, the Pa nel clarified paragraph 7.457 and added
paragraph 7.458.
6.78 The European Communities also ta kes issue with paragraph 7.444. In that paragraph the
Panel summarizes the arguments of the European Communities as follows:
"The European Communities agrees that the risk assessment techniques developed
by Codex are relevant and contemplated in Article 5.1's requirement to take into
account the risk assessment techniques de veloped by relevant international
organizations."
6.79 The European Communities argues that this pa ragraph is misleading because the European
Communities has followed the four steps of risk assessment described by Codex. The European
Communities asserts that it has followed the four steps because its legislation so provides, not because
it is required to do so under the SPS Agreement, since such techniques do not exist.
6.80 The Panel notes that it does not discuss in any way in paragraph 7.444 whether the European
Communities has complied with the four steps. In addition, the Panel notes in paragraph 7.446 that
"the European Communities argues that the risk assessment at the basis of Directive 2003/74/EC
precisely follows the four steps of risk assessment as defined by Codex ..."
6.81 It is irrelevant for the Panel whether the EC internal legislation mandates that the European
Communities follow the four steps or whether th e European Communities complied with its own
legislation. The Panel's analysis focuses on whether the European Communities "took into account"
the relevant risk assessment techniques of the re levant international organizations as required by
Article 5.1 of the SPS Agreement and, in paragraph 7.459, the Panel finds that it has.

255 EC's comments on interim report, para. 51.
256 Panel Report on Japan – Apples, para. 8.241.

6.82 The European Communities asks the Panel to more fully summarize its arguments in
paragraphs 7.474 and 7.475.257 The Panel has, therefore, modified those paragraphs.
(iv) Assessment of the scientific arguments
6.83 The European Communities, argues that paragraphs 7.476-7.509 are incoherent and confused.
Specifically, the European Communities believes that they do not adequately present the debate on the
"threshold approach" which it believes is the central scientific debate. 258 The Panel notes that the
content of paragraphs 7.476-7.509 contains the reasoning of the Panel on whether the Opinions satisfy
the definition of a risk assessment set forth in Annex A(4) of the SPS Agreement. This section of the
Panel's reasoning is not the appropriate place to present a debate between the parties about a particular
scientific issue.
6.84 The Panel, however, is mindful that the par ties did expend a significant amount of argument
on the relevance of "thresholds" to the risk assessment process and that perhaps it would provide
further clarity to include more explanation of th e various arguments. Therefore, the Panel made
modifications to the summaries of the parties' argume nts. The Panel believes that the debate over the
"threshold" issue can be divided into two main co mponents. First, whether all four of the risk
assessment steps as defined by Codex should be foll owed when the substance under review exhibits
no threshold. Second, whether oestradiol-17β is such a substance that exhibits no threshold because it
is genotoxic in vivo and therefore would lead to adverse effects even at the doses found in meat as a
result of treatment of cattle with oestradiol-17β for growth promotion purposes.
6.85 The Panel also feels that it would be helpful to include some additional information provided
by the experts with respect to this matter. Th erefore, the Panel inserte d a new paragraph after
paragraph 7.454. The Panel also changed the first sentence of paragraph 7.457.
6.86 With respect to whether oestradiol-17 β, in particular, is genotoxic in vivo and has no
threshold, the Panel finds that the issue arises in two different contexts: first, in the context of what
such a conclusion means for evaluating whether th e SCVPH Opinions constitute a risk assessment
within the meaning of the SPS Agreement; second, in the context of the analysis of whether the
science supports the conclusions reached by the Eu ropean Communities with respect to the genotoxic
properties of oestradiol-17β. To address both of these issues the Panel edited paragraph 7.469.
6.87 The Panel also feels that it would be helpful to include some additional information provided
by the experts with respect to this matter. Th erefore, the Panel inserte d a new paragraph after
paragraph 7.501.
6.88 With respect to whether the science s upports the conclusion that oestradiol-17β is a substance
that exhibits no threshold, the Panel has adde d Dr. Cogliano's response to question 19 from the
Panel259 as paragraph 7.527.

257 EC's comments on interim report, para. 52.
258 EC's comments on interim report, para. 53.
259 Panel question 19, Annex D, p. 34 ("The Europe an Communities states that '... it is generally
recognized that for substances which have genotoxic potential (as is the case with oestradiol-17 β) a threshold
can not be identified. Therefore it cannot be said that there exist a safe level below which intakes from residue
should be considered to be safe. Therefore the fact that doses used in growth promotion are low is not of
relevance'. Does the scientific evidence referred to by the European Communities support these conclusions?
Would your reply have been different at the time of adoption of the EC Directive in September 2003? If so,
why? [see para. 201 of EC Rebuttal Submission (US case), paras. 120-122 of EC Rebuttal Submission (Canada
case), paras. 73 and 86-98 of Canada Rebuttal Submission, paras. 87-91 and 153-156 of US First Submission
and paras. 35-40 and 46 of US Rebuttal Submission]")

6.89 The European Communities argues that paragraphs 7.487 and 7.488 of the interim report are a
misinterpretation of what the Appellate Body found in the original EC – Hormones case about the
concept of risk assessment and its significance in the SPS Agreement.260 The European Communities
does not provide any specific parts of the analysis th at it feels are a misinterpretation, neither does it
provide what it believes is the correct interpretati on. The Panel can only assume that the European
Communities maintains its position as summarized in paragraph 7.489.
6.90 The Panel based its reasoning in paragraphs 7. 487 and 7.488 of the interim report on several
passages in the Appellate Body Report on EC – Hormones . Paragraph 181 of the Appellate Body
Report reads as follows:
"The second preliminary consideration relat es to the Panel's effort to distinguish
between 'risk assessment' and 'risk manage ment'. The Panel observed that an
assessment of risk is, at least with resp ect to risks to human life and health, a
'scientific' examination of data and factual studi es; it is not, in the view of the Panel,
a 'policy' exercise involving social value judgments made by political bodies. 261 The
Panel describes the latter as 'non-scientific' and as pertaining to 'risk management'
rather than to 'risk assessment'. 262 We must stress, in this connection, that Article 5
and Annex A of the SPS Agreement speak of 'risk assessment' only and that the term
'risk management' is not to be found either in Article 5 or in any other provision of
the SPS Agreement. Thus, the Panel's distinction, which it apparently employs to
achieve or support what appears to be a r estrictive notion of risk assessment, has no
textual basis. The fundamental rule of treaty interpretation requires a treaty
interpreter to read and interpret the wo rds actually used by the agreement under
examination, and not words which the interpreter may feel should have been used."
6.91 The Appellate Body disapproved of the panel's use in the original EC – Hormones dispute of
the distinction between "risk assessment" and "risk management" because it had no textual basis.
However, this did not mean that the Appellate Bo dy endorsed an interpretation of Article 5.1 or
Annex A(4) of the SPS Agreement that included a risk management stage. In fact, it emphatically
stated that the term "risk management" is not to be found in Article 5 or any other provision of the
SPS Agreement. The Panel, therefore, finds no basis for the European Communities' assertion that the
Appellate Body confirmed that a risk assessment wi thin the meaning of Article 5.1 includes "a risk
management stage which to carry out is the respons ibility of the regulator and not of the scientific
bodies."
263
6.92 This Panel, following the advice of the Appellate Body, has adhered strictly to the text of
Article 5.1 and Annex A(4) of the SPS Agreement in its interpretation. In analysing the European
Communities' compliance with Article 5.1 and Annex A(4) of the SPS Agreement, the Panel is also
cognisant of the Appellate Body's finding that:
"The listing in Article 5.2 begins with 'available scientific evidence'; this, however, is
only the beginning. We note in this connection that the Panel states that, for purposes
of the EC measures in dispute, a risk assessment required by Article 5.1 is 'a scientific
process aimed at establishing the scientific basis for the sanitary measure a Member
intends to take'. 264 To the extent that the Panel intended to refer to a process
characterized by systematic, disciplined a nd objective enquiry and analysis, that is, a

260 EC's comments on interim report, para. 55.
263 EC's second written submission, para. 116.

mode of studying and sorting out facts and opinions, the Panel's statement is
unexceptionable.265 However, to the extent that the Panel purports to exclude from
the scope of a risk assessment in the sense of Article 5.1, all matters not susceptible
of quantitative analysis by the empirical or experimental laboratory methods
commonly associated with the physical sciences, we believe that the Panel is in error.
Some of the kinds of factors listed in Article 5.2 such as 'relevant processes and
production methods' and 'relevant inspection, sampling and testing methods' are not
necessarily or wholly susceptible of investigation according to laboratory methods of,
for example, biochemistry or pharmacolog y. Furthermore, there is nothing to
indicate that the listing of factors that may be taken into account in a risk assessment
of Article 5.2 was intended to be a closed list. It is essential to bear in mind that the
risk that is to be evaluated in a risk assessment under Article 5.1 is not only risk
ascertainable in a science laboratory opera ting under strictly controlled conditions,
but also risk in human societies as they actually exist, in other words, the actual
potential for adverse effects on human health in the real world where people live and
work and die."
266
6.93 Therefore, the Panel finds that a risk assessmen t consistent with Article 5.1 need not be
limited to empirical or experimental laborator y methods commonly associated with the physical
sciences. However, the Panel also agrees with the Appellate Body's statement that a requirement that
a risk assessment be "a process characterized by systematic, disciplined and objective enquiry and
analysis, that is, a mode of studying and sorting out facts and opinions" is unexceptionable.
6.94 Nowhere in the texts of Article 5.1 and A nnex A(4) does the Panel find support for the
European Communities' contention that a ri sk assessment within the meaning of the SPS Agreement
includes "weighing policy alternativ es in light of the results of ri sk assessment and, if required,
selecting and implementing appropriate cont rol options, including regulatory measures." 267 What the
European Communities seems to be describing is how a government choos es an appropriate SPS
measure based on a risk assessment. The Panel does not find that this is contemplated by the texts of
Article 5.1 and Annex A(4) of the SPS Agreement.
6.95 To avoid any confusion or misunderstandi ng the Panel modified paragraphs 7.490 through
7.492.
6.96 The Panel is aware that the experts responded to the Panel's questions with respect to what the
European Communities had evaluated in its Opinions by using a terminology that is standard for risk
assessments conducted according to th e process outlined in the Codex Procedural Manual. Although
the scientific experts' responses may include term s such as "hazard characterization" or "exposure
assessment", the Panel is at all times aware that the relevant standard against which it is assessing the
European Communities' measure is that of the SPS Agreement. In order to emphasize this point, the
Panel added a new paragraph before paragraph 7.494.

265 (footnote original) "The ordinary meaning of 'scientific' , as provided by dictionary definitions,
includes of, relating to, or used in science', broadly, ha ving or appearing to have an exact, objective, factual,
systematic or methodological basis', of, relating to, or e xhibiting the methods or principles of science' and of,
pertaining to, using, or based on the methodology of scienc e'. Dictionary definitions of science' include the
observation, identification, descripti on, experimental investigation, and theoretical explanation of natural
phenomena', any methodological activity, discipline, or study', and knowledge attained through study or practice'".
(footnotes omitted) United States' Statement of Administrative Action, Uruguay Round Agreements Act , 203d
Congress, 2d Session, House Document 103-316, Vol. 1, 27 September 1994, p. 90.
266 Appellate Body Report on EC – Hormones, para. 187.
267 EC's reply to question 24 of the Panel after the first substantive meeting, Annex B-1, para. 137.

6.97 The European Communities takes issue with the reliance of the Panel on certain statements by
the experts in paragraphs 7.494-7.500 and cites to various other statements by the same experts which
it claims stand for the opposite proposition. 268 The Panel takes note that Annex D, which contains the
replies of the experts to the Panel's questions is 116 pages long and Annex G which contains the
transcript of the Panel's meeting with the experts is 170 pages long. This does not include the various
comments and comments on comments of the parties on the experts' responses and on the transcripts.
With this volume of information, every comment by the experts could not be included in the Panel
findings and, for that matter, did not have to be. 269 Therefore, the Panel made a decision to select
quotations that are representative of a particular expert's opinion on a given topic. The Panel has
reviewed the specific paragraphs referred to by th e European Communities in an attempt to determine
if it misunderstood or misrepresented a particular expert's opinion.
6.98 With respect to Dr. Guttenplan, the European Communities objects to the Panel's reliance on
paragraph 145 of the experts replies to the Panel's questions and refers the Pa nel to paragraphs 366,
393, 713, and 716-718 of Annex G as well as his wr itten reply to Panel ques tion 17 which is at
paragraph 176 of Annex D.270
6.99 With respect to the Panel's reliance on paragra ph 145 of Annex D, which is Dr. Guttenplan's
response to Panel question 13, cite d in paragraph 7.495, the Panel amended the para graph to better
reflect Dr. Guttenplan's complete response to the question.
6.100 Additionally, to more fully reflect Dr. Gutte nplan's written answer to question 52 of the
Panel, the Panel modified paragraph 7.500.
6.101 With respect to Dr. Guttenplan's other interven tions cited by the European Communities, the
Panel did not deem it necessary to make any additional changes in this section.
6.102 Paragraph 366 of Annex G refers to Dr. Guttenplan's opinion that oestrogen is genotoxic, but
that it may not be possible to "really estimate the ri sk at this point from such low levels of genotoxic
effects."271 Paragraph 393 of Annex G re fers generally to the issue of conducting risk assessments of
genotoxic substances with no threshold. 272 The Panel believes it has dealt with these issues in the
amendments mentioned above.
6.103 Paragraphs 713 and 716-718 of Annex G reflect Dr. Guttenplan's opinion that although,
because anything is possible, there may be a risk from consumption of meat derived from cattle
treated with oestradiol-17 β for growth promotion purposes, it is so low that it is not susceptible to
calculation. It also reflects an interjection by the European Communities asking Dr. Guttenplan to
confirm his statement that, although the risk is smal l and cannot be evaluated or calculated, it is not
zero.
6.104 The Panel does not believe that these statements ar e directly relevant to the Panel's reasoning
on whether the European Communities conducted a risk assessment consistent with the definition set
forth in Annex A(4) of the SPS Agreement. As the Panel has noted, the purpose of the risk assessment
is to evaluate the possibility that an identified adve rse effect comes into bei ng, originates, or results
from the presence of the identifie d additives, contaminants, toxins or disease-causing organisms in
food, beverages or feedstuffs. It is not to guara ntee that said possibility w ill be below the Member's
appropriate level of protection or indeed will be zero.

268 EC's comments on interim report, para. 56.
269 Appellate Body Report on EC – Hormones, para. 138; see also Section VII.C.3.(d)(iii) of this report.
270 EC's comments on interim report, para. 56.
271 Transcript of the Panel meeting with the experts, Annex G, para. 366.
272 Transcript of the Panel meeting with the experts, Annex G, para. 393.

6.105 Finally, the European Communities cites Dr. Guttenplan's written response to question 17 of
the Panel. In that paragraph, Dr. Guttenplan st ates that the absence of catechol metabolites in meat
from treated animals does not imply that the meat is without risk for genotoxicity. Dr. Guttenplan
was being asked to evaluate a particular argument by Canada. The Panel does not read this statement
as implying that the residues of oestradiol-17 β in meat from treated cattle are definitely genotoxic.
However, even if this were the case, the issue of ge notoxicity is only relevant to the issue of whether
a threshold could be determined for this substance. Again, the Panel believes it has addressed this
point with the additions and edits suggested above.
6.106 The European Communities also refers the Panel to various interventions by Dr. Cogliano at
the Panel meeting with the experts, namely, pa ragraphs 400, 404, 406, 409, 870, and 1021-1025 of
Annex G.273 In paragraphs 400, 404, and 406 of Anne x G, Dr. Cogliano provides the Panel with
general background information on the issue of th resholds and linear dose response curves. The
comments are not specific to the Opinions of the European Communities and therefore are not
relevant to the analysis the Panel is undertaking in this particular section. Paragraph 409 of Annex G
contains a question from the Chairman. The Pane l is unsure whether the European Communities
meant to refer to paragr aph 408 or paragraph 410. 274 In any event, in both those paragraphs
Dr. Cogliano provides general background informa tion on what is meant by a linear dose response
curve.
6.107 Dr. Cogliano, in paragraph 871 of Annex G275, states that the data are not sufficient to conduct
a "JECFA-style" risk assessment if oestradiol-17 β has no threshold. The Panel finds this statement
unremarkable for two reasons. First, the Panel is not evaluating whether the European Communities
has done a "JECFA-style" risk assessment, but whet her it has done a risk assessment consistent with
the definition set forth in Annex A(4) of the SPS Agreement. Second, the European Communities has
not argued that there is insufficient data to conduct a risk assessment of oestradiol-17 β, it has argued
that it has conducted a risk assessment of oestradiol-17 β that is consistent with the SPS Agreement,
that its measure is based on that risk assessment and that, consequently, it has acted consistently with
Article 5.1 of the SPS Agreement. Dr. Cogliano's statement, in the paragraph cited by the European
Communities, is not directly relevant in this context.
6.108 Paragraphs 1021 through 1025 of the transcript of the panel meeting with the experts report a
discussion where both Drs. Boobis and Cogliano confir m that the fundamental difference between the
JECFA study and the SCVPH Opinions is the willingn ess to assume a threshold and interpret the data
from that standpoint. The Panel has now cited these interventions in the new paragraphs 7.455-7.456
and paragraph 7.502.
6.109 In its comments on the interim report, the Eur opean Communities argues that if the Panel had
properly looked at Dr. Cogliano's interventions in th ese paragraphs of the transcript the Panel would
have had to conclude that the European Communities' risk assessm ent has followed one side of a
legitimate debate while JECFA has followed another. 276 The European Communities seems to imply
that if the Panel recognizes this it would also c onclude that the European Communities' ban on the
importation of meat and meat products from cattle treated with oestradiol-17 β for growth promotion
purposes was based on a risk assessment within the m eaning of Article 5.1 and Annex A(4) of the

273 EC's comments on interim report, paras. 56-58.
274 Because the specific paragraph references by th e European Communities in its comments on the
interim report frequently tend to differ from the versio n in Annex G, the Panel believes that the European
Communities must have prepared its interim comments with a different version of the transcript than the one
contained in Annex G. In each instance of mistaken citation, the Panel has read the paragraphs in the transcript
surrounding those cited by the European Communities to ensure that it has correctly identified and is responding
to the concerns expressed by the European Communities.
275 Paragraph 870 is the Chairman giving the floor to Dr. Cogliano.
276 EC's comments on interim report, paras. 57-64.

SPS Agreement. The Panel does not see the issue in quite the same manner as the European
Communities. The issue is not whether a risk assessment following the four steps as defined by
Codex could or should have been completed. Th e issue is whether the European Communities has
conducted a risk assessment within the meaning of Article 5.1 and Annex A(4) of the SPS Agreement.
6.110 The Panel does not take a position on the science or on how to evaluate data when a particular
substance exhibits no threshold. 277 However, whatever approach the European Communities adopts
in its assessment of the risks, it is obligated to co nduct a risk assessment that is consistent with the
definition set forth in Annex A(4) of the SPS Agreement. The Panel finds that the SPS Agreement
requires an analysis that goes beyo nd the identification of a potential adverse effect. The analysis
must include an examination of the potential for that adverse affect to come into being, originate, or
result from the presence of the specific substance under review in food, beverages, or feedstuffs, in
this case oestradiol-17 β in meat and meat products derived fro m cattle treated with the hormone for
growth promotion purposes. The Panel will not prescribe a particular manner or approach for how the
analysis should be conducted, but the analysis must be conducted.
6.111 The intervention by Dr. Sippell in paragra ph 576 of Annex G cited by the European
Communities mentions a scientific study cited in the 1999 Opinion which posits that the radioimmuno
assays originally used to calculate daily endoge nous production levels of the hormones may have
overestimated these levels. The Panel addressed this issue by inserting in paragraph 7.507 quotations
from the 1999 SCVPH Opinion on this issue directly, and a new paragraph 7.508.
6.112 Additionally, the Panel felt that more direct quotation from the Opinions with respect to the
other identified potential adverse effects would provide greater clarity. Therefore, the Panel modified
paragraphs 7.506 and 7.507.
6.113 The European Communities also refers to a statement by Dr. Boobis at paragraph 725 of
Annex G.
278 The Panel has reviewed the surrounding para graphs and found that, like Dr. Guttenplan,
Dr. Boobis had engaged in an exchange with th e European Communities about the concept of zero
risk. Again, Dr. Boobis confirms that science cannot provide absolute assu rance of the absence of
risk or an absolute guarantee of safety. Dr. Boobis also states "it is not clear to me how you would
ever conduct a risk assessment and guarantee that, w ithout ensuring zero exposure, and of course that
would cease all use of all compounds where there is any risk whatsoever, and they all have some
risk."279
6.114 As with the citations to Dr. Guttenplan's statements at the meeting with the Panel, the Panel is
unclear what the European Commun ities believes this reference to certain statements by Dr. Boobis
will add to the Panel's reasoning on whether it c onducted a risk assessment consistent with the
definition set forth in Annex A(4) of the SPS Agreement. The Panel notes again that the purpose of a
risk assessment is to evaluate th e possibility that an identified a dverse effect comes into being,
originates, or results from the pr esence of the identified additives, contaminants, toxins or disease-
causing organisms in food, beverages or feedstuffs, not to guarantee that said possibility will be below
a Member's appropriate level of protection or indeed will be zero.280

277 EC's comments on interim report, para. 78. Contra ry to the assertion of the European Communities,
the Panel does not endorse any one particular way to approach risk assessment.
278 Paragraph 725 is an interjection by Canada. See transcript of the Panel meeting with the experts,
Annex G, para. 725.
279 Transcript of the Panel meeting with the experts, Annex G, paras. 723 and 729.
280 The Panel notes that the Appellate Body in para. 186 of its report on EC – Hormones , asked "if a
risk is not ascertainable, how does a Member ever know or demonstrate that it exists?"

6.115 The European Communities argues that in paragr aphs 7.525-7.534 the Panel relies solely on
the responses of Drs. Boobis and Boisseau and does not reflect the opinions of the other experts.281
6.116 The Panel notes that the relevant section is from paragraphs 7.520-7.540 and that the Panel
cites Dr. Cogliano and Dr. Guttenplan in pa ragraph 7.536 and Dr. Guttenplan again in
paragraph 7.537. Nevertheless, the Panel has examined the written answers of the other experts to the
same questions of the Panel as well as the transcript of the Panel meeting with the experts and made
additional references to experts' statements.
6.117 The European Communities argues that the Panel is in error in paragraph 7.538 when it states
that the only study cited with respect to su sceptible populations was one having to do with in utero
exposure to DES, which is banned in the United States. 282 The Panel has reviewed the paragraphs in
the 1999 Opinion referenced by the European Co mmunities. Although the European Communities is
correct that other studies regarding susceptible popul ations are referenced in section 2.2.2.4 entitled
"Potential adverse effects of exogenous sex hor mones on growth and puberty upon exposure of
prepubertal children," the Panel, in paragraph 7.53 8, was specifically referring to the link between
cancer and consumption of hormone treated meat. With respect to that specific identified potential
adverse effect, the only study mentioned in section 2.3.2.4 under susceptible populations with respect
to oestrogen is one involving in utero exposure to DES. The Panel modified the third sentence of
paragraph 7.538.
6.118 Additionally, based on the European Communitie s' comment, the Panel also reviewed the
paragraphs in the interim report wh ich dealt with section 2.2.2.4 of the 1999 Opinion. In order to
ensure that the Panel fully reflect s the science the European Communiti es relied upon in this section,
the Panel amended paragraph 7.505.
6.119 The European Communities argues with respect to paragraph 7.540 that, because the Panel
based its findings on the views expressed by the "most convincing" experts, the Panel has failed to
make an objective assessment of the matter, failed to take properly into account the totality of the
available evidence and failed to give proper weight to different scientific views which are based on
genuine and legitimate scientific grounds. The Eu ropean Communities also argues that the Panel's
"most convincing" experts are the ones it had alleged had a conflict of interest.
6.120 The Panel bases its analysis in this section on its own reading of the plain language in the
Opinions which was corroborated by the views expr essed by the experts and this combination leads
the Panel to its conclusions. Additionally, the Pa nel disagrees with the European Communities that it
fails to examine the totality of the evidence or to give proper weight to particular scientific views. As
the Panel notes, it does not disregard any of the statem ents by the experts. However, the Panel could
not possibly provide full quotations of every answer or statement of every expert. The fact that the
Panel may have cited specific passages from speci fic experts does not mean that the Panel did not
consider and weigh all of the responses.
6.121 The Panel, after reading the Opinions, the expert s' answers to questions, the transcript of the
meeting with the experts, and the parties submis sions and comments, made a determination about
which experts had provided the Pane l with answers that responded to the questions asked in a clear
and consistent manner supported by expertise and evidence. This determination is the essence of
weighing the evidence. As the Panel noted above , in paragraphs 7.520-7. 540, the section to which
paragraph 7.540 belongs, the Panel cited Dr. Boisseau, Dr. Boobis, Dr. Cogliano, and Dr. Guttenplan.
These are the experts who answered the relevant qu estions and who had identified expertise in risk

281 EC's comments on interim report, footnote 11.
282 EC's comments on interim report, footnote 11.

assessment, toxicology, studies of carcinogens, and biochemistry. 283 The Panel regrets if it caused
any confusion by using the phrase "most convincing" and accordingly clarified paragraph 7.540.
6.122 The European Communities fails to see why the Panel, after having concluded that there is no
risk assessment, goes on to examine whether the scien ce supports the conclusions in the Opinions and
asks for more explanation than previously provided fo r. The Panel modified paragraph 7.510 in order
to provide additional explanation.
(v) Comments on the Panel analysis regarding the other five hormonal substances
6.123 The European Communities argues that paragra ph 7.583 is unclear and seems irrelevant for
the further analysis of the Panel. The European Co mmunities first argues that, in its oral statement, it
spoke about whether a risk assessment can reach a definitive conclusion, not whether or not it is
possible to perform a definitive risk assessment. Firs t, the Panel recalls that the EC reference to a
"definitive risk assessment" is found in the EC second written submission. 284 Second, the Panel does
not see any real difference between "reach[ing] a de finitive conclusion" and making a "definitive risk
assessment". Its reasoning in paragraph 7.583 thus applies equally to both statements.
6.124 Second, the European Communities considers that the Panel should have referred to what the
experts said at the hearing about the issue of whet her scientific data can ever allow for a definitive
conclusion to be reached. This seems to suggest that the European Communities no longer argues that
what matters in order to justify the application of Ar ticle 5.7 is whether a definitive conclusion can be
reached or whether a definitive ri sk assessment can be made. If this is correct, the Panel does not
believe that it is entitled to address new argument s at the interim review stage. The Panel
nevertheless reviewed the comments of Dr. Cogliano referred to by the Eu ropean Communities. In
paragraph 776 of Annex G, Dr. Cogliano suggests that there can be different types of risk
assessments, depending on the specificity of the risk one wishes to identify. The Panel fails to see in
what respect this statement affects its finding in paragraph 7.583. As recalled by the Panel in its
findings
285, the type of risk assessment requested under Article 5.1 is a risk assessment within the
meaning of Annex A(4) of the SPS Agreement, which is not one of the types of risk assessment
identified by Dr. Cogliano. It is in the context of the completion of a risk assessment within the
meaning of Article 5.1 and Annex A(4) of the SPS Agreement that the Panel discussed the EC
argument regarding a "definitive risk assessment" or a "risk asse ssment reach[ing] a definitive
conclusion". The other comment of Dr. Cogliano referred to by the European Communities 286
suggests that data may be sufficient to do one type of risk assessment (e.g. "the JECFA-style ADI")
but not one based on a theory according to which it is not possible to identify a dose below which
there is no risk, because there is a risk at an y dose level, even the low doses one might find in
hormone-treated meat. The Panel notes in this rega rd that this is different from arguing that one
should be able to invoke Article 5.7 because one cannot make a "definitive risk assessment". As
mentioned by the Panel, the Appellate Body in Japan – Apples did not say that relevant scientific
evidence would become insufficien t if a Member could not perform a particular type of risk
assessment, but only if it would be unable to perform a risk assessment within the meaning of
Article 5.1 and Annex A(4) of the SPS Agreement.
6.125 The Panel did not deem it necessary to delete or modify paragraph 7.583.
6.126 The European Communities make s a general reference to its second written submission and
takes issue with the assessment of th e Panel in paragr aphs 7.627-7.698 by stating that the Panel did

283 Transcript of the Panel meeting with the experts, Annex G, paras. 54-72.
284 Inter alia in paras. 137 and 143.
285 See paras. 7.432-7.433.
286 Annex G, para. 871.

not properly and fully examine the reasons contained in the Opinions and relied exclusively on certain
statements of a minority of the experts it had chosen to advise it, while ignoring pertinent statements
of the other experts. The Panel notes that it addressed the EC comments on its findings where they
were directed at precise aspects of the interim report. This was the case regarding comments on the
Panel's reliance on the views expressed by some of the experts it consulted and for comments
regarding the existence of sufficient relevant scientific evidence. The Panel does not deem it
necessary to address those issues in general terms here.
6.127 The European Communities finds the Panel refere nce to a risk assessment "in substance" in
paragraph 7.606 to be "entirely unclear". In the opinion of the Panel, one can always follow each of
the Codex steps provided for the gathering and analysis of scientific evidence. However, in order to
be a risk assessment within the meaning of Article 5.1, that exercise must reach scientific conclusions
that are supported by the scientific evidence therein.
287 Thus, the possibility to complete a risk
assessment depends on whether the relevant scientific evidence is sufficient to support a conclusion
on whether the identified adverse effect arises from, comes into being, or occurs as a result of the
presence of the substance at issue in food, beverages, or feedstuffs.
6.128 The European Communities seems to suggest, in substance, that whether a risk assessment
can be completed depends on the level of protec tion chosen by a given Member. The European
Communities seems to link the conduct of the risk assessment with the desired outcome of a given
SPS measure; i.e. to ensure zero risk. The Panel believes that this is not what the SPS Agreement
requires. The Panel considers that the European Communities' interpretation is not supported by the
text of Article 5.7, which only refers to the insuffi ciency of relevant scientific evidence. There is no
indication that this insufficiency is to be assessed in relation to the Member's level of protection.
Otherwise the negotiators would have stated "in cases where relevant scientific evidence is
insufficient in the light of the level of protecti on chosen by the Member adopting of maintaining a
sanitary measure". Nothing in the context of Ar ticle 5.7 suggests this interpretation either.
Articles 2.2, 3.3 and 5.1 provide relevant contextual support for the proposition that the purpose of the
SPS Agreement was to ensure that Member's SPS measures are "objectively justified" 288 by science.
This purpose would be defeated if a Member could invoke Article 5.7 whenever relevant scientific
evidence is insufficient to objectiv ely justify the type of measure that would achieve a particular
desired level of protection. The Panel modified paragraph 7.606 in order to clarify what it meant.
6.129 Regarding paragraphs 7.608-7.615, the Eur opean Communities argues that the Panel's
discussion does not do justice to the role genuine sci entific uncertainty plays in risk assessment. It
contests the Panel's exclusive reliance on the opinion s of Dr. Boisseau and Dr. Boobis and refers to
statements by experts other than those quoted by the Panel. As far as the Panel's reliance on
Dr. Boisseau and Dr. Boobis is concerned, it should be recalled that this is a risk assessment issue and
these two scientists were selected by the Panel inter alia because of their expertise on risk assessment.
Yet, Dr. Boisseau and Dr. Boobis were not the only ones with the same view. Dr. Tritscher's remarks
on the subject also support the Panel's conclusion.289
6.130 None of the interventions of experts cited by the European Communities in its comments
contradicts the conclusions reached by the Panel in its interim report, which are clearly spelled out in
paragraph 7.615. More particularly, none of Dr . Cogliano's statements cited by the European
Communities contradicts the Panel. In the pa ragraphs cited by the European Communities,
Dr. Cogliano mainly explains the role of IARC and whether there is uncertainly about genotoxicity.
Similarly, in the paragraphs cited by the Europ ean Communities, Dr. Guttenplan says that there is
uncertainty about certain scientific issues, but he does not address the role of uncertainty in risk

287 Panel Report on Japan – Apples (Article 21.5 – US), para. 8.136.
288 Appellate Body Report on EC – Hormones, para. 190.
289 Annex G, para. 348.

assessment. Dr. Sippell addresses an issue unrelated to risk assessment. Dr. De Brabander addresses
the quality of data and improved methods. Regardi ng the alleged misinterpretation of some of the
statements of Dr. Boobis on the existence or not of genuine scientific uncertainty, it seems that the
paragraph referred to by the European Communities (Annex G, paragraph 1049) deals with a different
issue: that of scientific uncertainty in relation to U-shaped dose-response curves, not how scientific
uncertainty is treated in risk assessment.
6.131 The European Communities argues, with respect to paragraph 7.622 , that the risk assessments
performed by JECFA do not contain the specific evidence that the Panel allegedly found to be missing
in the EC Opinions and, therefore, cannot constitu te proper risk assessments. The Panel notes that
there is no reference to the JECFA risk assessment of oestradiol-17 β in the Panel's analysis of the
consistency of the European Communities' perman ent ban on meat and meat products derived from
cattle treated with oestradiol-17β for growth promotion purposes, because the European Communities
claimed that it completed its own risk assessment for oestradiol-17 β. The Panel thus conducted an
analysis of the SCVPH Opinions and sought to de termine whether they complied with the definition
of a risk assessment in Annex A(4) and whether th e science contained therein supported the European
Communities' decision to institute a total ban. Unlik e the analysis under Article 5.7, with respect to
oestradiol-17β the Panel was not trying to determine whether there was sufficient scientific
information to conduct a risk assessment. The Panel r ecalls that the fault it found with the Opinions
was not that any particular piece of evidence was missing, but rather that the Opinions did not
specifically analyse the risk of the identified adverse effects arising from the presence of
oestradiol-17β in food, beverages, or feedstuffs. Th erefore, whether JECFA relied on the same
evidence as the European Communities in its analysis of oestradiol-17β is irrelevant. The Panel notes
that JECFA did take into account the dose levels in meat and meat products and attempted to calculate
the risk to humans from consuming typical amounts of meat. JECFA used a series of assumptions
regarding meat consumption, circulating levels of oestrogen in the blood for various sub-groups of the
population, etc. The European Communities may very well be right that there are other ways to
analyse the risk than those JECFA utilized. The Pa nel does not take a position on that issue. What
the Panel has said, is that such an analysis is required by Article 5.1 and Annex A(4) of the
SPS Agreement.
6.132 With respect to the Panel's reference to the con cept of "critical mass" in paragraph 7.626, the
European Communities request that we provide an explanation of where this criterion comes from and
whether it is in conformity with the findings of the Appellate Body in EC – Hormones.
6.133 The Panel used the term "critical mass" in full knowledge of its meaning.
290 It used it in the
sense of a situation where evidence becomes quan titatively and qualitatively sufficient to call into
question the fundamental precepts of previous know ledge and evidence. The Panel does not mean
that there must be sufficient evid ence to perform a new risk assessment. Otherwise, Article 5.7 of the
SPS Agreement would become meaningless. It used the term "critical mass" very much in its
common scientific usage, i.e. the new scientific info rmation and evidence must be such that they are
at the origin of a change in the understanding of a scientific issue. We do not see in what respect this
approach by the Panel, which applies to the speci fic situation in this case (i.e. one where a party
alleges that previously sufficient scientific evidence has become insufficient) would be contrary to the
findings of the Appellate Body in EC – Hormones.

290 In mathematics and physics "critical" is defined as "constituting or relating to a point of transition
from one state, etc. to another. "C ritical size" or "critical mass" are de fined as the minimum size or mass of a
body of a given fissile material which is capable of sustaining a nuclear chain reaction (Shorter Oxford English
Dictionary, 5th edition (1993), p. 558). In other words, the Pane l assessed whether it had been provided with the
minimum evidence necessary to conclude that knowledge has become quantitatively and qualitatively sufficient
to call into question the fundamental precepts of previous knowledge and evidence.

6.134 The European Communities takes issue with paragraph 7.640. The European Communities
contests the Panel's approach in defining a list of general issues common to all five hormones. The
European Communities argues that it has identified exactly, for each hormonal substance, the sections
in the 1999 Opinion that deals i ndividually with that substance a nd suggests that the Panel's list of
"general issues" common to all five hormones is arbitrary.
6.135 The Panel first recalls that, as a general principle, panels are free to structure the order of their
analysis as they see fit. 291 The Panel does not deny that the EC Opinions addressed each hormone
individually. However, as explained in paragraphs 7.637-7.639, some issues were common to all five
hormones and the evidence provided was not always su fficiently specific to address a particular issue
in relation to each hormone individually. The Panel modified paragraphs 7.62 9-7.640 and the title to
Section VII.C.3.(f)(vi) to reflect the fact that wh at is discussed are issues common to all hormones for
which hormone-specific evidence was not provided.
6.136 The Panel also clarified that certain insuffici encies identified in the EC Opinions had not as
such been discussed by the Europ ean Communities in its submissions. The Panel concluded that the
European Communities was not arguing that these pa rticular insufficiencies were what made it
impossible to complete a risk assessment. Ther efore, the Panel decided not to address these
insufficiencies. This may have prompted the EC comment that the Panel analysis on the individual
hormonal substances in paragraphs 7.699-7.816 was incomplete. The clarification brought by the
Panel demonstrates that it did not draw a random lis t of issues common to all hormones and explains
the reasons why a more limited number of issues was discussed compared with what had been
identified in the Opinions. The Pa nel has also clarified this point in the sections relating to each
hormone individually and did not follow the request of the European Communities that it address each
and every issue of insufficiency raised in the Opinions.292
6.137 The European Communities contests the c onclusions of the Panel in paragraph 7.642,
footnote 739 as inaccurate, but without specifying why. In that footnote, the Panel refers to a new
method and new assays to detect small amounts of hormones in meat, mentioned in the 2002 Opinion.
From what is mentioned in the 2002 Opinion, the studies were on the subject of hormone levels in
meat, not in people. Whereas it might be possible to apply these method and assays to detect
endogenous levels of hormones in humans, the Eu ropean Communities does not argue this in its
comments, and this is not what the method and assays are about. It also appears that, according to the
2002 Opinion, the method and assays mentioned were not exactly successful or trustworthy. The
conclusion in section 4.1.1 of the 2002 Opinion, where the new method is discussed, reads: "[D]espite
a number of positive analytical results in this study, the low number of samples does not allow a
qualified validation of typical characteristics such as sensitivity, specificity, accuracy and
reproductibility." (2002 Opinion, page 9). The c onclusion of section 4.1.2, where the bioassays are
discussed, is that: " [T]he obtained results suggest that the use of recombinant yeast and rainbow trout
hepatocytes to detect oestrogenic compounds is not justified in view of their lack of sensitivity".
(2002 Opinion, page 9). It seems that, even if they were relevant in the c ontext of paragraph 7.642
this new method and assays do not contribute to a critical mass of evidence that would put into
question existing knowledge. The Panel, therefore, did not modify footnote 739.
6.138 With respect to paragraphs 7.644-7.647, th e European Communities argues that the Panel
reduces the discussion to only two quot ations and draws a conclusion th at is not based on the debate
with the experts at the hearing. The European Communities argues that "much more was said about
this issue" at that hearing.
293 The Panel notes, however, that the discussion related to the sensitivity of
children to hormones in general, without drawing an y direct link with any of the five hormones at

291 Appellate Body Report on Canada – Wheat Exports and Grain Imports, para. 126.
292 EC's comments on Sections VII.C.3(f)(vii), (viii), (ix), (x), (xi).

issue in this section, and to the validation of met hods, particularly of the new ultrasensitive assay (the
"Klein" methodology). The only hormone expr essly discussed in relation to this assay was
oestradiol-17β. The Panel notes that it concludes in this section that (a) the studies using the new
ultrasensitive assay were limited to oestradiol-17 β; and (b) that the ultrasensitive assay had not been
validated. Thus, the Panel does not agree with the European Communities that its conclusions are not
based on the debate referred to above.
6.139 The European Communities requests that we clar ify the first sentence in paragraph 7.647.
More particularly, the European Communities requ ests that we specify whether this is a legal
argument or a scientific argument. The Panel consid ers that the finding that the evidence relates only
to oestradiol is not an argument but a factual cons ideration. The Panel considers that, since the new
detection method measured oestradiol only 294 and since no evidence was pr ovided that suggested that
extrapolation had been made or could be made to other hormones, the evidence is insufficient to
conclude, with respect to the five hormones subj ect to a provisional ban under Article 5.7 of the
SPS Agreement, that existing knowledge has been put into question.
6.140 With respect to the EC comment on the second sentence of paragraph 7.647, the Panel
confirms that, indeed, its understanding is that th e ultrasensitive detection method used by Klein and
subsequently relates only to oestradiol and has not been validated. This has been confirmed by
Dr. Boobis at the hearing. 295 As a result, the Panel cannot c onclude that existing knowledge and
evidence have been put into questio n by the results of the ultrasen sitive assay with regard to the
impact of the five hormones on prepubertal chil dren if the available evidence relates only to
oestradiol.
6.141 Even if the ultrasensitive assay had been validated and had demonstrated lower levels of the
five hormones at issue in this section – and not only oestradiol – in sensitive populations, the Panel
notes that the 1999 Opinion itself states that "[A] corollary is that perhap s the hormones residues in
beef, which are also low and which have also been determined by RIA are equally variable and over
representative of the actual hormone concentrations."296
6.142 In its comments regarding paragraphs 7.649-7.652 the European Communities considers that
the Panel's approach to the issue of dose response is flawed and circular.
6.143 The European Communities bases its contention th at the Panel's reasoning is circular on the
assumption that the Panel rejected the EC approach based on an absence of a dose response analysis.
Even though it rejected that approach in this particular case for oestradiol-17 β, the Panel did not
exclude that there could be situations where dose response would not apply. The Panel believes, on
the contrary, that it is the European Communities that is making contradictory arguments. The
European Communities cannot argue that "the Appella te Body clearly judged that a risk assessment
[could] be either qualitative or quantitative"
297 and that a dose response is not required in order to
complete a risk assessment and, at the same time, ar gue for the five hormones at issue that relevant
scientific evidence is insufficient to perform a risk assessment because the data available do not allow
a dose response assessment. Yet, this is what app ears to be concluded in the 1999 Opinion as far as
the five hormones are concerned. The Panel nonetheless clarified the paragraphs at issue.
6.144 The European Communities argues that, in pa ragraph 7.654, the Panel declines to discuss
bioavailability on the basis that the studies relied upon by the European Communities do not relate to
the five hormones in question, but only to oestradiol and that there is no indication that the

294 See para. 7.645 quoting Dr. Sippell. See, also, Dr. Sippell's statement in Annex G, para. 588.
295 Annex G, para. 572.
296 1999 Opinion, section 3.2, p. 30.
297 See EC's reply to question 26 of the first series of questions of the Panel, para. 153, Annex B.

conclusions can be applied to hormones other than oestrogens. The European Communities considers
that this assertion by the Panel is without foundation.
6.145 In order to reach its conclusion, the Panel examined most particularly the portions of the 1999
and 2002 Opinions quoted by the European Communities in its reply to question 28 of the questions
of the Panel after the first substantive meeting
298 and in its second written submission. 299 The two
extracts quoted by the European Communities addr ess only oestradiol, while making references to
oestrogens. Furthermore, the extract of the 199 9 Opinion quoted by the European Communities is
part of the section of the Opinion regarding oestradiol. The Panel notes that the European
Communities argued that "similar findings [had been] made for all the other five hormones."
300
However, the European Communities did not specify where such findings had been made. This
allegation has to be considered in relation to th e comments of the experts. The Panel nonetheless
deemed it necessary to clarify the section on bioavailability.
6.146 In its comments on the interim report, the Europ ean Communities also refers to the experts'
replies to question 43. The Panel first notes that th is question concerns bioavailability in general, not
the sufficiency of evidence regarding bioavailabili ty. The Panel has included quotations of the
relevant passages of the experts' replies in its findings. The Eur opean Communities also refers to
paragraphs 132 et seq. of the transcript of the hearing (Annex G). The Panel reviewed the comments
of the experts on bioavailability and found that t hose comments address neither the bioavailability of
the five hormones at issue, nor the sufficiency or insufficiency of evidence on it.
6.147 With respect to paragraphs 7.662 to 7.677, the European Communities argues first that the
discussion on long latency of cancer and confounding f actors should have been in the Panel's analysis
under Article 5.1 of the SPS Agreement. We note that the Panel addressed this question to the extent
this was necessary for its analysis under Article 5.1. The question of the latency period of cancer and
of the epidemiological survey of the occurrence of cancer in various populations was addressed in
paragraphs 7.535 et seq. The Panel also deemed it necessary to address the latency of cancer in its
section under Article 5.7 because the European Comm unities argued that the long latency period of
cancer made it impossible to demonstrate positively th e existence of clear harm in relation to the
hormones at issue. The Panel first determined wh ether long latency of cancer was relevant for the
performance of a risk assessment for the hormones at issue. It then proceeded to determine whether
relevant scientific evidence in relation to the latenc y of cancer was insufficient to the point of making
it impossible to perform a risk assessment within th e meaning of Article 5.1 and Annex A(4) of the
SPS Agreement. In order to do this, it assessed whether it could be considered that a "critical mass" of
new information or evidence was now available wh ich could unsettle the way long latency of cancer
has been taken into account in risk assessment so far. The Panel clarified the part of
Section VII.C.3.(f)(vi) dealing with long latency of cancer and confounding factors in order to better
present its analysis.
6.148 The European Communities also argues that the section on long latency of cancer and
confounding factors is evidence that we applied a "double standard" of evid ence for the removal as
compared to the approval of the hormones at issue. We did not argue that JECFA or the respondent
performed the epidemiological studies necessary to demonstrate an absen ce of long term effect of the
hormones at issue in terms of cancer. We not e that the long latency of cancer has been
acknowledged. We also note that confounding factors make it difficult to assign a particular cancer to
specific circumstances of ingestion of hormone resi dues. We recall that JECFA's risk assessments
take into account the long latency of cancer thr ough the ADI. To the extent that the European

298 Annex B-1, paras. 155-159.
299 Paras. 131-166.
300 EC's reply to question 28 of the questions of the Panel after the first substantive meeting,
Annex B-1, para. 158.

Communities disagrees with the approach followed by JECFA, it is for the European Communities to
provide a "critical mass" of evidence – not a "posi tive evidence" – that this approach is no longer
valid.301 We conclude that, in these proceedings, the European Communities has not pointed at
evidence suggesting that long latency of cancer h as not been appropriately taken into account in
existing risk assessments.
6.149 The European Communities also takes issue with the Panel's discussion on the immunological
effect of the five hormones in paragraphs 7.678-7.685. The European Communities seems to raise
two issues in its comments. The first one is relate d to the question of whether a threshold approach
must be followed. The second one is whether the Pa nel dismissed the EC arguments on the basis that
the scientific evidence relates to oestrogens only.
6.150 Regarding the first issue, the Panel notes that all three experts who answered question 59 302
stated that there is no evidence of effects on th e immune system from doses such as those resulting
from consumption of meat from treated animals. If the point the Europ ean Communities wishes to
make in its comments is that the approach based on a "threshold" is not required to assess the effect of
the five hormones at issue on the immune system, th en the Panel fails to unde rstand why, under those
circumstances, the relevant scientific evidence on the effect of the five hormones on the immune
system is insufficient for the European Communities to perform a risk assessment for those hormones.
6.151 With respect to the second issue, the Panel notes that Dr. Boobis and Dr. Guttenplan address
the effect of oestrogen/oestradiol on the immune system (Dr. Boobis refers to "hormones such as
oestradiol"). As the Panel mentions in paragraph 7.681, the main reason for dismissing the EC
arguments on insufficiency of evidence regarding the effect of hormones on the immune system is the
fact that the evidence made available to the Panel re lates exclusively to the effect of oestrogens. The
European Communities has not identified any eviden ce that specifically addresses any of the five
hormones at issue in this section. The European Communities has not explained either to the Panel
why it thinks the evidence on oestrogens would be relevant for the other hormones. The Panel notes
in this respect that the Opinions do not identify an y evidence with respect to the five hormones that
residue levels in meat might have an effect on the immune system. The Panel nonetheless clarified
paragraphs 7.683-7.684.
6.152 Regarding paragraphs 7.686-7.698, the Europ ean Communities argues that the Panel quotes
Dr. Sippell as identifying adverse effects, but does not discuss his statement. The European
Communities adds that there is also no discussion of the other experts' views put forward at the
hearing.
6.153 Regarding Dr. Sippell's statement in paragra ph 7.691, the Panel has further discussed the
points raised by the experts on this matter in paragraphs 7.692 through 7.698.
6.154 With respect to paragraphs 7.674 to 7.687 of the interim report, the European Communities
argues that the Panel's discussion of the potential misuse and abuse in the administration of hormones
is in the wrong place, to the extent that this is an aspect of risk assessment, in the sense of Article 5.1
to 5.3 of the SPS Agreement, that is applicable across all iden tified potential risks and for all six
hormones. The Panel agrees with the European Communities that the question of misuse and abuse in
the administration of hormones may apply to all six hormones at issue and is an element that can be
taken into account in risk assessment, as set forth in Article 5.2 of the SPS Agreement and confirmed
by the Appellate Body in EC – Hormones. However, the Panel did not deem it necessary to address
this question in the section regarding the conform ity with Article 5.1 of the definitive ban on

301 In this respect, the Panel inserted a footnote in para. 7.626 to address the EC argument on standard
of proof.
302 Annex D, paras. 443-448.

oestradiol-17β, to the extent that the question whether misu se or abuse exists in the administration of
hormones did not have an impact on the issues addr essed by the Panel under Article 5.1. Indeed, the
question of misuse or abuse in the administration of hor mones is relevant to the extent that it can lead
to higher concentrations of hormone residues in meat and meat products than would occur if good
veterinary practices are applied. As stated by the 1999 Opinion, it is an aspect of exposure
assessment. In this case, the Panel found that the European Communities had not evaluated
specifically the possibility that the adverse effect that it had identified in its risk assessment come into
being, originate, or result from the consumption of meat or meat products which contain veterinary
residues of oestradiol-17 β as a result of the cattle being treated with this hormone for growth
promotion purposes. Therefore, whether the concentrations of hormone residues in meat and meat
products could be higher as a result of misuse or ab use did not have to be addressed. The Panel does
not deem it necessary to move this section to another part of its findings.
6.155 Having regard to the point made by the Europ ean Communities that misuse and abuse in the
administration of hormones is an aspect of risk asse ssment within the meaning of Article 5.1 to 5.3,
the Panel reflected further on whether this issue re lated at all to the question of insufficiency of
relevant scientific evidence under Article 5.7. In the view of the Panel, the question of whether
JECFA properly took into account misuse and abuse in its risk assessments is irrelevant to the
question whether the European Communities can ta ke this matter into account in its own risk
assessment, since it has full discretion to do so pursuan t Article 5.2 and to the Appellate Body finding
in EC – Hormones. In that context, whether evidence exists of misuse or abuse in the administration
of hormones is not as such a scientific issue likely to make a risk assessment within the meaning of
Article 5.1 and Annex A(4) of the SPS Agreement impossible.
6.156 For these reasons, the Panel decided to delete th e section regarding misuse or abuse in the
administration of hormones from its final report and modified paragraph 7.578.
6.157 The European Communities argues that the Panel' s analysis on the issue of carcinogenicity of
progesterone in Section VII.C.3(f)(vii) is flawed . However, the European Communities does not
explain specifically in what respect it is flawed. The Panel therefore did not modify its reasoning.
6.158 The European Communities argues that the Panel' s analysis on the issue of carcinogenicity
and genotoxicity of testosterone in Section VII. C.3(f)(viii) is clearly incorrect and flawed. The
European Communities refers to a statement by Dr . Tritscher allegedly admitting that JECFA found
that there was scientific uncertainty about genotoxicity of testosterone.
303 The Panel consulted the
transcript and noted that Dr. Tritcher discussed the genot oxicity of oestradiol, not that of testosterone.
She did say that "all information is being looked at, in particular with compounds that have a
genotoxic potential", but she did not mention that progesterone had a genotoxic potential.
6.159 The European Communities argues that the approach and analysis of the Panel on the issue of
metabolism and carcinogenicity of trenbolone acet ate in Section VII.C.3(f)(ix) is flawed, inter alia,
because JECFA's assessment defended by Dr. Boobi s and Dr. Boisseau dates back to 1988 and is
clearly outdated. The Panel has already discussed th is argument and considers that a risk assessment
does not become invalid merely because it is "old". The Panel believes that, in order to demonstrate
that a risk assessment is "outdated", a party must pr ovide studies showing that the data on which the
risk assessment is based are no longer valid.
6.160 The European Communities argues that the reasoning of the Panel regarding carcinogenicity
of zeranol is flawed, inter alia , because if the extrapolation to meat consumption mentioned by
Dr. Guttenplan was necessary, as the Panel seems to require in paragraph 7.783, this would have
amounted to a complete risk assessment in the sense of Article 5.1 of the SPS Agreement. The

303 Statement of Dr. Tritcher, Annex G, para. 463.

European Communities argues that this is not the releva nt standard in the context of Article 5.7. We
agree with the European Communities that being able to perform a risk assessment compatible with
Article 5.1 is not the standard applicable in the cont ext of Article 5.7 and we do not consider that we
applied any such standard in this case. Indeed, the reason why the Panel paraphrased
Dr. Guttenplan's statement was not to say that the European Communities could demonstrate that
relevant scientific evidence was insufficient only if it were able to extrapolate some genotoxic effect
of zeranol to meat consumption. The point that th e Panel wanted to make was that the extrapolation
of the study commented by Dr. Guttenplan woul d have entailed, according to Dr. Guttenplan, a
"myriad of uncertainties". As a result, this stud y could hardly serve as a basis to put in question
existing knowledge. We clarified this in paragraph 7.783.
6.161 As regards the alleged application of a similar standard in paragraphs 7.787-7.788, the Panel
recalls that what has to be demonstrated for Article 5.7 to apply is that no risk assessment within the
meaning of Article 5.1 and Annex A(4) of the SPS Agreement can be performed. Our reference to
Dr. Guttenplan means that we consider, as mentioned in paragraph 7.615, that not just any form of
scientific uncertainty can justify a recourse to Article 5.7. As previously noted, we consider that when
scientific evidence has been sufficient, it may only be considered as insufficient if a critical mass of
scientific information and evidence exists, in terms of quantity and quality, to put into question
existing knowledge and evidence. We therefor e did not consider it necessary to modify our
reasoning.
6.162 In paragraph 7.798, the European Communities expresses its disagreement with the Panel's
approach consisting of applying a presumption of conformity with the SPS Agreement to JECFA's risk
assessment on melengestrol acetate (MGA), even t hough that risk assessment has not yet been
endorsed by Codex. The Panel has explained in paragraph 7.799 why some degree of relevance
should be given to JECFA's work, even though it is not formally a "standard, guideline or
recommendation" within the meaning of Article 3.2 of the SPS Agreement. The Panel also notes that
the European Communities does not sp ecify in which respect the Panel's analysis of the issue of the
residue data used by JECFA on carcinogenicity is fl awed, except for suggesting that the residue data
is "outdated", a question already addressed by the Panel in paragraphs 7.800-7.803.
6.163 Finally, the European Communities requests the Pa nel to clarify the meaning and extent of its
conclusion in paragraph 7.823. This paragraph simply states that, because relevant scientific evidence
is not insufficient, the European Communities cannot invoke Article 5.7. The corollary is that the
European Communities should be able to complete a risk assessment under Article 5.1. The European
Communities argues that the Panel should clarify fu rther how the risk assessment could be completed
in the presence of the gaps identified in the EC Opinions with respect to oestradiol-17 β. The gaps
identified in the EC Opinions for oestradiol-17β are:
(a) that the European Communities has not eval uated specifically the possibility of the
adverse effects related to the association between excess hormones and
neurobiological, developmen tal, reproductive and immunological effects, as well as
immunotoxicity, genotoxicity and carcinogenici ty coming into being, originating or
resulting from the consumption of meat or meat products which contain veterinary
residues of oestradiol-17β as a result of the cattle being treated with this hormone for
growth promotion purposes;
(b)
 The scientific evidence referred to in th e Opinions does not support the European
Communities' conclusions on genotoxicity, or the conclusion that the presence of
residues of oestradiol-17β in meat and meat products as a result of cattle being treated
with the hormone for growth promotion pur poses leads to increased cancer risk. The
scientific evidence does not support the EC conclusions on the adverse

immunological and developmental effects of consuming meat and meat products
from cattle treated with oestradiol-17β for growth promotion purposes.
6.164 Thus, the problems identified by the Panel are not related to the fact that a risk assessment
cannot be performed, but rather that the Europ ean Communities did not conduct a risk assessment
pursuant to Article 5.1 and Annex A(4) and th at the scientific evidence did not support the
conclusions which the European Communities re ached. The European Communities' comment
apparently underlines an approach to risk assessment that seems to consist of identifying a risk from a
particular substance and if there is any possib ility, no matter how remote, of that risk occurring
because of that substance, deciding that there is no need to further study whether the risk could arise
from the levels of that substance found in food , beverages, or feedstuffs. As discussed in
paragraph 6.107 above, the purpose of a risk assessm ent under Article 5.1 and Annex A(4) is not to
provide guarantees that risks will be below a particul ar appropriate level of protection or even zero,
but to objectively determine the possibility for the risk to arise from the presence of the substance
under review in food, beverages, or feedstuffs. The Panel therefore, does not believe that the
European Communities' approach to risk assessment, whereby the desired level of protection informs
the risk assessment rather than the risk assessment providing objec tive data to be utilized by a
government in determining how to achieve its appropri ate level of protection, is consistent with the
object and purpose of Article 5 of the SPS Agreement.
(b) Comments by Canada
6.165 Canada points out that the first sentence of paragraph 7.509 states that "the European
Communities has assessed the general risk of the identified potential adverse health effects ..."
(emphasis added). Canada requests, given th e specific definition of risk assessment in the
SPS Agreement, that the Panel replace the phrase "has assessed the general risk" with the phrase "has
identified a hazard in relation to". 304 The European Communities, in its comments of 19 October
2007305, argues that the Appellate Body has already found, in EC – Hormones , that the EC risk
assessment at that time had indeed shown the "existence of a general risk of cancer".306
6.166 Considering that it was necessary to ensure clarity, the Panel decided to modify
paragraph 7.509. However, the Panel will not use the term "has identified a hazard in relation to" as
this too has very specific meanings as set fort h in the Codex Procedural Manual and cited in
paragraph 7.437. Instead, it will modify paragraph 7.509 to read:
"All of the statements of the experts, a nd indeed statements from the Opinions,
indicate that the European Communities has evaluated the potential for the identified
adverse effects to be associated with oest rogens in general, but has not provided
analysis of the potential for these effects to arise from consumption of meat and meat
products which contain residues of oestradiol-17 β as a result of the cattle they are
derived from being treated with the hormone for growth promotion purposes."
6.167 The Panel also considers this correction to be in line with the finding of the Appellate Body in
paragraph 200 of its report on EC – Hormones referred to above by the European Communities.
6.168 Canada also requests that we replace, in para graph 7.842(a), the phrase "to the extent that" by
the term "because". The Panel does not deem it appr opriate to accept Canada's suggestion since the
reason for the violation of Article 22.8 in this case is only one of the reasons that can lead to a
violation of that Article.

304 Canada's comments on interim report, p. 4.
305 Para. 23.
306 Appellate Body Report on EC – Hormones, para. 200.